Division of corporate powers – s.63 CAMA

S63 (1). A company has two primary organs: board of directors and members in general meeting. The company has power to divided power between both through its articles of association. Unless otherwise provided for in the articles, the business of the company is to be managed by the directors.

 

Default powers of the general meeting – s 63(5)

• Act when members of the board of directors are disqualified or unable to act because of a deadlock or otherwise
• Institute legal proceedings in the name and on behalf of the company where directors refuse/neglect to do so
• Ratify or confirm any action taken by the board
• Make recommendations as regards any proposed action by the board

 

Company secretary

“Every company shall have a secretary” S 293 (1)

in common law a secretary was a mere servant, it later revised it to say that the company secretary is more than that and can take acts that can bind the company PANORAMA CASE_. This position has been adopted by Nigeria.

WIMPEY (NIG.) LTD V BALOGUN (1986), FIRST GUARANTEE PENSIONS LTD V NATIONAL PENSIONS COMMISSION (2016)

It is compulsory for every company to have a secretary and there is space for it in FORM CAC 1.1 when incorporating a company.

As a director, the person can be appointed as a secretary but when executing a document the person cannot sign as both secretary and director.

S298(2) a company secretary cannot act without the authorisation of the board.

First secretary is appointed by subscribers when filing CAC 1.1. while subsequent secretary is appointed by board of directors in a resolution which is then filed.

Draft the resolution

 

Qualification (private companies)

“ a person who appears to have the requisite knowledge and experience..” – s 295 CAMA.

It distinguishes between qualifications for private companies and public companies.

However for a public company the person shall 

1. A member of the institute of chartered secretaries and administrators (ICSAN); or
2. A legal practitioner within the meaning of the legal practitioners act; or

• A member of the institute of charted accountants (ICAN) or any other body of accountants established under an act; or

1. Any person who has held the office of company secretary in a public company for at least three years of the five years prior to his appointment in a public company
2. A firm or body corporate consisting of any of the above categories of person also qualifies to be appointed company secretary of the public company

 

Appointment & removal – s 296 (1) CAMA

“a secretary shall be appointed by the directors and; subject to the provisions of the section, may be removed by them”

CAC must be notified within 14 days of appointment of subsequent secretaries

 

When is a company secretary to be appointed?

Under the new regime (CAC form 1.1. – APPLICATION FOR REGISTRATION). They are appointed at the point of incorporation.

Procedure for appointment

• A board meeting should be convened to appoint company secretary
• A board resolution should be passed to appoint company secretary
• Enter particulars of secretary into register of directors & secretaries pursuant to s.292 CAMA
• Within 14 days of the resolution, notice of the appointment must be given to the corporate affairs commissions by filing FORM CAC 2.1.

 

Draft

COMPANY LETTER HEAD

Name of the company

RC number:

Address

Email , website

Phone number

Our REF:                                                                                                                       Your ref:

ORDINARY RESOLUTION

At the board meeting held on ……day of …… at ……… the following resolutions were proposed and duly passed

Board resolution to appoint company secretary pursuant to section 296 CAMA

DATED THIS …..DAY OF ….. 2018(note that the date stated here cannot exceed 14 days before the filing date stated)

 

Duties of a company secretary see s298

They shall include:

1. Attendance at all meetings of the company, rendering secretarial services at same, as wellas advising on compliance with rules & regulations
2. Maintaining registers and records as required by the act
3. Rendering proper returns and notifying the commissions as required under the act
4. ,….

 

Where a secretary wants to resign he simply has to give a letter of resignation, but when the public company wants to remove the secretary the company must give him notice. He has 7 working days to make a defence or resign.

 

Statutory returns

• Annual returns - 370 & 374 CAMA
• Notice of appointment/removal of director - S292(4)
• Notice of conversion/ re-registration of company S50-53 CAMA
• Return on allotment of shares - S.129 CAMA, timeline is 1 month 
• Registration of charges - S.197 CAMA

 

Fiduciary duties of a secretary – s297 CAMA

Ordinarily no fiduciary duties but when he acts as an agent he has a fiduciary duty.

So the generally the company secretary does not owe the company a fiduciary duty – the general rule. Exceptions include when he has made secret profit.

 

 

Acts of officers & agents – s. 66

• Not binding on company unless expressly/impliedly authorized by board or members in general meeting
• Company will be civilly liable for authorized acts unless third party has actual or constructive knowledge to the contrary]
• The authorization may be before or after the act (ratification) & acquiescence equals ratification

 

Powers exercisable by secretary - S 298(2) CAMA

For instance: convening board and general meetings , s.263(2)

 

What happens where there is no company secretary to act/ there is one incapable of acting?

• Duty to be carried out by an assistant/ deputy secretary , or
• Any officer of the company can act for that purpose

 

Can one person be both director & secretary? YES

However where a document is required to be signed by a director and secretary, the same person cannot sign in both places

CESSATION OF OFFICE – s 296 CAMA

A company secretary can cease to hold office on any of the following grounds:

• Resignation
• Removal

 

Resignation: just a letter.

Don’t forget to include a letter head in your letter.

 

Procedure for removal (private company) – s 296 CAMA

 

Procedure for removal (public company) s 296

• Notice should be given to secretary stating the following:
• The intention to remove
• The grounds for his proposed removal
• To resign or make a defence and respond to the allegations within seven (7) working days

 

• Where the secretary does not respond to the allegations within the stipulated period and the board finds his reasons to be ”insufficient”, whether the board can go ahead to remove him depends on the “ grounds for his removal”
• Where the ground for the secretaries removal IS NOT BASED ON “fraud or serious Misconduct”, the secretary shall not be removed by the board without the General meetings approval
• He may be suspended and then removed by members in a general meeting who shall determine the effective date of his removal

 

Procedure for removal

• Notice pursuant to section 296 (if a public company)
• Convene board meeting to propose removal
• A board resolution should be passed to remove the secretary
• Indicate removal of secretary in register of directors & secretaries pursuant to s.292 CAMA
• Within 14 days of the resolution, notice of the appointment must be given to the Corporate Affairs commissions (CAC)

 

draft notice for removal

 

For every procedure, the company acts files resolution, then act

When you see any question on company secretary in exam, first note whether the company is private company or public company.

There is no ordinary or special in board resolution, board resolution is simply a board resolution.