Learning outcomes: 

1. Identify various laws and regulatory bodies on corporate law practice in Nigeria.
2. List the procedure for accreditation with each of the regulatory bodies.
3. Complete the forms required for accreditation with the regulatory bodies.
4. Identify ethical issues arising in choice of business and non-business organisation.

 

Principal laws

• Companies & Allied Matters Act 2004 CAP C20
• Companies regulations – this has to do with procedures. This is very key.
• Company proceedings rules – This focuses on the procedure to tackle litigation when it comes to litigation. This is usually found in the CAMA
• Companies winding up rule – this is also a subsidiary regulations to CAMA
• Investments and securities Act 2007

 

Note: If you’re familiar with the legislation, this will help your understanding of the course.

The focus is on procedure, documents.

 

 

Textbooks

• Bhadmus on corporate law – there’s a 2017 one coming out soon, buy the latest edition.
• Dr O.B Akinola on corporate law
• Abugu on Corporate law – this is also a good reference book
• Gawa 9^th edition

 

How different is Company Law from Corporate Law?

• Corporate law takes its life from and is inextricably linked to company law.
• The scope of Corporate law is wider

 

CAMA is divided into four parts:

• Part A – legal personality of companies Sections 1-568 of CAMA
• Part B – business names and partnerships (also see partnership law of Lagos state and partnership act) Section 569 – 589 of CAMA
• Part C – Incorporated trustees. Sections 590-612 CAMA
• Part D – short title

 

Legal framework refers to the laws while, regulatory bodies/controlling bodies are bodies that regulate that field.

 

Legal Framework

1. Companies & Allied Matters Act 2004 CAP C20
2. Company proceedings rules
3. Companies Winding up rules
4. Investments and securities Act 2007
5. Nigerian Investment Promotion Commission Act
6. National Office for Technology Acquisition and Promotion act cap.18 LFN 2004
7. Immigration Act. Cap 111 LFN 2004
8. Securities & Exchange Commission Rules 2013
9. Federal high court Act
10. Federal high court civil procedure rules
11. Nigerian Investment Promotion Commission Act

 

Regulatory bodies

1. Corporate affairs commission (CAC), established by CAMA s1(1), s 7 deals with functions of Corporate Affairs Commission
2. Securities and exchange commission (SEC), established by ISA 2007, s.1(1)
3. Nigerian Investment promotion commission (NIPC), established Nigerian Investment Promotion Commission Act
4. National office for technology acquisition and promotion
5. Central bank of Nigeria, established by Central Bank of Nigeria Act
6. Asset management corporation of Nigeria
7. Nigerian communication commission
8. Nigerian export processing zone authority

 

Functions of AMCON

Functions of NOTAP – see the act

Know the functions of the various bodies.

 

Functions of CAC

1. They establish and maintain company Registry. In Lagos there are two offices
2. They investigate the affairs of the company
3. They maintain

 

S/N	Applicable law	Regulatory body	Administrative Head
1	Companies and Allied Matters Act 2004	Corporate Affairs Commission	Registrar-General
2	Investments and Securities Act 2007	Securities and Exchange Commission	Chairman
3	Federal High Court Act	Federal High court	Chief Judge
4	Nigerian Investment Promotion Commission Act 2004	The Nigerian Investment Promotion Commission (NIPC)	Director-General
5	National Office for Technology Acquisition and Promotion Act 2004	National Office for Technology Acquisition and Promotion	Director-General
6	Immigration Act	Nigerian Immigration Service	Comptroller-General
7	Banks and other Financial Institutions Act	Central Bank of Nigeria	Governor of the Central Bank
8	Asset Management Corporation of Nigeria Act	Asset Management Corporation of Nigeria	Managing Director (S. 10(1)(b) AMCONA
9	Insurance Act 2007	National Insurance Commission
10	National Industrial Court Act	National Industrial Court	President
11	Asset Management Corporation Act, 2010	Asset Management Corporation	Managing Director
12	Federal Inland Revenue Service Act, 2007	Federal Inland Revenue Service	Executive Chairman

 

Note who a letter to each of those bodies, will be addressed to.

 

Sectors

• Aviation
• Oil and gas
• Communication
• Hotel and tourism – the issue of trademark will come in hotels, international branding, NOTAP will come in as well because it talks about trademarks.
• Power & electric
• Financial institutions e.g. AMCON
• Food and drugs e.g. NAFDAC
• Maritime e.g. NIMASA, Nigerian ports authority

 

Tip: if they ask for regulatory bodies for a sector or company you don’t know, just know that CAC has to be there because the company must be registered. Also FIRS will be there, as they have to pay tax. Financial reporting council

 

Case: Eko hotel vFinancial Regulation Council – the matter is on appeal, the argument is whether the hotel should be subject to Financial Regulation Council Act. The act is meant to only regulate public companies.

Financial reporting council of Nigeria: the Stanbic IBTC case 

 

How to draft a memo

HEADER - ABC PLC (INTERNAL MEMORANDUM)

 

TO: THE MD

FROM: THE COMPANY SECRETARY

SUBJECT: FUNCTIONS OF CAC

DATE: NOVEMBER 16 2017

BODY

THANK YOU

NAME (COMPANY SECRETARY) SIGN

 

Also note functions of SEC. s13 (know at least 6)

• Regulate investment & securities business in Nigeria
• Keep and maintain register of foreign direct investment and foreign portfolio investments
• Approve and regulate mergers, acquisitions and all forms of business combinations
• Ensure that investors are protected, and maintain fair and orderly market.
• Register and regulate all types of securities exchanges, capital trade points (CTP’s) and central depository and clearing companies.
• Conduct research into all or any aspect of the securities industry
• Register securities to be offered to the public
• Register and regulate corporate and individual operators, advisers and consultants in the market
• Register and regulate venture capital funds and other forms of collective investment schemes

 

Read about the STANBIC IBTC SAGA

 

ACCREDITATION – CAC

The law doesn’t specifically provide for it but it can be backed up under s 7

Legal practitioners, chartered accountants, chartered secretaries. PART A

You still need a lawyer to sign the form, but a person doesn’t need a lawyer to incorporate.

Accreditation is not necessary if the person is a first director or subscriber they don’t need accreditation. But they need to do accreditation for matters post incorporation. People who aren’t first director or subscribers need accreditation before they can incorporate. The issue of accreditation has been modified but its not completely obsolete.

 

Note: For companies you need to be accredited and this is the first step a new lawyer would take, but for business names and registered trustees you don’t need to be accredited so your first step would be to take instructions. For companies as a lawyer you need to be accredited but for capital market operators you need to be registered.

 

Registration – capital market operator

• S 38 ISA – operators must be registered
• Rule 178 SEC rules (2013) – capital market experts/professional

Not every lawyer is automatically entitled to be registered as a capital market operator, but they have to sit for the exam, office inspection

See the case of SEC v Kasumu, he won but the law was changed after the case.

 

List 10 regulatory agencies and give the executive heads  

 

Revision class – 10^th March 2018

 

NIGERIAN LAW SCHOOL (name of the company)

Internal memorandum (It doesn’t need address because its an internal memo)

FROM:

TO:

DATE:

SUBJECT

BODY:

SIGNATURE

NAME

DESIGNATION

 

Note: to determine whether “from” precedes “to” or the reverse,the person with the higher cadre is who appears first. The highest authority comes first – when it comes to from, to).

 

Letters written to CAC is addressed to “Registrar-General of Corporate affairs Commission”. But when you’re writing in regard to business names it is “Registrar-General of business names”

 

 

Applicable Laws

1. Companies and Allied Matters Act

Part A deals with incorporation of companies

Part B – registration of business names

Part C – incorporation of Trustees

• It is compulsory for a company to register under PART A otherwise all its actions will be void. It has to be incorporated to carry on business otherwise the business will be void.
• It is necessary for proprietors to register incorporated trustees within 28 days otherwise all their actions are void. They can carry on business for 28 days before registration. It doesn’t make the entity a juristic entity. They don’t need to register at all; registration or failure to do so does not confer juristic personality. The protection is on the trustees, it does confer any other protection on them, it cannot sue on its own. Gani Fawehinmi v NBA
• It is not compulsory for business names to register, registration confers priority on the names only. It doesn’t make the entity a juristic entity. They don’t need to register at all, registration or failure to do so does not confer juristic personality. It does confer any other protection on them, it cannot sue on its own. Gani Fawehinmi v NBA . For business that are required to register they have within 28 days after commencement of business to register – s 574 (1)

 

2. Constitution of the Federal Republic of Nigeria 1999 (As Amended) – generally applicable
3. Company proceeding rules – generally applicable
4. Companies winding up rules
5. Investment and securities act 2007 - generally applicable
6. Federal High Court Act
7. Evidence act – if they are going to court, this is generally applicable
8. Capital Gains Tax Act
9. Stamp Duties Act
10. Companies Regulations 2012 – generally applicable
11. National office for Technology Acquisition and Promotion Act
12. Nigerian investi

 

 

Note the general ones:

• Constitution of the Federal Republic of Nigeria 1999 (As Amended) - you have to write in full
• Companies and Allied Matters Act
• Companies Regulation 2012
• Company proceeding rules
• Investment and securities act 2007
• Evidence act

 

 

CAC is a juristic personality – s 1(2) CAMA. S 1(3) provides that the commission shall have offices in each state of the federation with its headquarters in the FCT. S8(2) – the CEO of the CAC is the Registrar- General. Qualification – Legal Practitioner, minimum of 10 years post call legal experience , minimum of 8 years experience in company law practice or administration ,s 8(1)

 

Membership of CAC – S 2 CAMA

The CAC has only one full time member which is the registrar-general, all other members shall be part-time -  s3(3),  quorum of the meeting is 5 - s5(3).

 

Accreditation is for companies – theoretically it is not optional. Accreditation is required under part A, but not under part B and C. Insurance companies must be incorporated and accredited.

 

Categories of professionals that qualify for accreditation

• Legal practitioners
• Chartered secretaries
• Chartered accountant
• A firm of any of the above
• Any person that served as a company secretary of a public company for at least 3 years in the preceding 5 years

 

Procedure for accreditation

• Obtain and complete the CAC accreditation form
• Submit the duly completed accreditation form with the following documents:
• Two passport photograph of the individual or partners for the firm
• Copy of the professional qualifying certificate of the applicant
• Evidence of payment for practising fee for the year of application
• Copy of NYSC discharge certificate or certificate of exemption
• Accreditation fee of N5, 000 fee for individual, N 10,000 for law firm,. Procedure for the replacement of a lost accreditation card

 Formal application for the replacement:

• Police report
• Affidavit of loss
• Copy of the professional qualifying certificate
• Evidence of payment of practice fee for the year in which you’re applying
• Replacement fee

 

Securities and Exchange Commissions 

Established under s1 ISA and is Apex body for the Nigerian capital market

CEO of SEC is director – general and this is who the letter is addressed to.

Functions

• They regulate investmentand securities business in Nigeria.
• They register and regulate securities exchanges, capital tradepoints.
• Regulate all offers of securities by public companies and entities
• Register securities of public companies
• They keep and maintain register of foreign portfolio investment
• They advise the minister on matters relating to the security industry

Only professional & experts that are duly registered under SEC can operate as Capital Market operator – s 38

Categories of person that can register as Capital Market operator

• Professional – individual: LP’s, auditors, accountants, engineers,. Estate valuers, property managers and any other expert or professional as may be determined by SEC at anytime rule 178 (1) SEC rule  - SEC FORM 3 for individual
• A company
• Firm

After a person applies SEC has 60 days to consider an application andwhen where SEC refuses to register they must issue a notice and the notice of refusal must set out the reasons for such refusal. SEC then gives the person 14 days to make their representation – rule 178 (b)(4)

 

NATIONAL OFFICE FOR TECHNOLOGY ACQUISITION AND PROMOTION

 A regulatory body established under s 1 of NOTAP act, and it monitors the transfer of foreign technology into Nigeria. It is a Parastatal of the federal ministry of science and technology. NOTAP doesn’t allow the importation of obsolete technology e.g. grinding machine, or something Nigeria can provide/produce, or something that’s already in Nigeria. Its registers technology transfer agreement from one country to Nigeria and not within states. 

 

Functions – see s 4 NOTAP act

1. Register contracts and agreements
2. Provide a more efficient process for the adaptation of imported foreign technology
3. Examine the quality of the imported technology

 

Letter must be made within 30 days from the effective day of the TTA – technology transfer agreement and it is addressed to the Director-General. Once they have made the application a certificate would be issued to them called, s6(1). NOTAP then has 60 days to register them or communicate the refusal.

Grounds for refusal of registration – S 6(2) NOTAP

1. Where the price is not commensurate with the technology.
2. Where the supplier can freely intervene with the supply and distribution of the technology – because they don’t want outsiders to control the market
3. Where the supplier is a bit fraudulent

 

A certificate that has been issued can be cancelled –  S8 NOTAP but once it is refused or cancelled the person, must be given a notice within 60 day to file an appeal to the governing council of NOTAP ( s9 NOTAP)

 S 7 NOTAP – effect of non-registration: no repatriation of funds -  STANBIC IBTC V FRCN & NOTAP

 

NIGERIA INVESTMENT PROMOTION COMMISSION

This is a regulatory body established under s 1. Nigeria investment promotion commission Act. It promotes, coordinates, monitors and encourages investment in Nigerian economy. It also requires that foreign participants register before…..

Functions - s4. NIPCA

 

 

SEC is an incorporated company limited by guarantee but has statutory backing.

Nigerian stock exchange is

 

ONE STOP INVESTMENT CENTRE

• This was established by the NIPC as its administrative arm.
• Its main function is to coordinate service delivery of the regulatory agencies and also serve as a platform under which all the regulatory agencies perform their functions.
• Ensures quick and efficient service delivery to potential investors through the platform of the NIPC.

 

Functions of One stop investment centre

1. Grant of business permit
2. Entry permit
3. Licences,
4. Authorisation,
5. Incentives

Note: that it can’t stand on its own, it’s under the NIPC

 

Agencies operating at One-stop investment centre 

1. Nigerian investment promotion commission
2. Corporate affairs commission
3. Nigerian immigration service
4. Nigerian custom service
5. Federal inland revenue service
6. National office for technology acquisition and promotion
7. NAFDAC
8. Standard organisation of Nigeria
9. Federal ministry of solid mineral and developments
10. National bureau of Statistics
11. Central bank of Nigeria

 

NIGERIAN STOCK EXCHANGE

Registered as a company limited by guarantee maintains discipline in the capital market and ensure prudence in share ownership. They monitor artificial inflation of shares. They provide trading floor for sale and purchase of securities of publicly quoted companies. They are responsible for the listing and general discipline at the floor of exchange. They publish periodic reports of market capitalization and all share index  

Any question dealing with shares

 

Sector specific laws

 

Banking sector

• Central bank of Nigeria – regulatory body, Central bank of Nigeria (establishment) Act – law regulation

Functions - Issue regulation and circulars to banks

• National deposit insurance act
• Asset Management Corporation of Nigeria act – law,
• Mortgage Institutions Act

 

Telecommunication sector 

• Nigerian communications commission act – law, Nigerian communications commission – regulatory body

 

Power sector 

Electric power sector reform act 2005 – law, Nigerian electricity regulatory commission 

 

Oil and gas sector

• Petroleum act - law t
• Petroleum profit tax act – this would not be sued if the company is set up to provide oil ad gas fro an orphanage for free
• Petroleum product pricing regulatory agency act

 

 

Nigerian immigration service