Corporate Law Practice
Corporate Law Practice tests the Nigerian statutory and common-law rules that govern companies from incorporation to winding up. The examiner expects working knowledge of CAMA 2020 (as amended), CAC filing practice, and the leading principles of corporate personality.
Core rules
- Incorporation. Promoters deliver an application, memorandum and articles, and pay prescribed fees to the CAC. The certificate of incorporation is conclusive evidence that the company exists, even if internal formalities were defective. A company may be formed by one or more persons.
- Corporate personality. A company is a separate legal person (Salomon v Salomon). The veil is lifted by statute or where the company is a sham, an agent, or used to evade legal obligations.
- Management. Directors owe fiduciary duties (good faith, proper purpose, no secret profit, no conflict) and duties of care and skill. Members act in general meeting; private companies may use written resolutions.
- Capital and charges. Shares may be allotted and transferred subject to the articles; dividends come only from distributable profits. A charge must be registered at the CAC within the statutory period; otherwise it is void against the liquidator and creditors.
- Meetings and resolutions. Notice, quorum and proxy rules apply. Ordinary resolutions need a simple majority; special resolutions need 75% of votes cast.
- Minority protection and insolvency. Oppression, derivative actions, personal actions and just-and-equitable winding up protect minorities.
Worked example
Ada signs a lease “for and on behalf of Nova Ltd” before Nova is incorporated. Nova later occupies the premises and pays rent. Nova is not automatically bound: a pre-incorporation contract must be adopted or ratified by the company under CAMA 2020. Occupation and payment can evidence ratification, so Nova may enforce the lease. Ada, however, remains personally liable unless the landlord agrees to a novation releasing her. If Nova later creates a charge that is never registered, the lender’s security is void against the liquidator and creditors.
Traps
Do not attack the certificate for mere internal defects; do not confuse ordinary and special majorities; do not assume adoption releases the promoter; do not treat an unregistered charge as effective; and do not cite CAMA 1990 section numbers.