Company Law and Corporate Governance
Scope
Company Law and Corporate Governance tests how Nigerian companies are incorporated, governed and held accountable. CAMA 2020 is the core statute; the Nigerian Code of Corporate Governance (NCCG) 2018, SEC rules and sector codes supply governance expectations.
Core rules
- Incorporation and personality. The CAC registers companies. A company is a separate legal person (Salomon v Salomon), so members’ liability is limited to unpaid shares. The veil may be lifted for fraud, alter ego or statutory exceptions.
- Governance organs. The board manages the company; members exercise reserved powers in general meeting. CAMA 2020 codifies directors’ duties, including good faith, care and skill, and avoiding conflicts.
- Governance codes. NCCG 2018 operates on “apply and explain”, not “comply or explain”. Public companies also face SEC Code requirements. Typical structures include independent directors, separation of chair and CEO, and audit, risk and remuneration committees.
- Resolutions. Ordinary resolutions need a simple majority; special resolutions need 75% of votes cast. Notice and quorum rules must be met.
Worked example
A PLC director owns 40% of a supplier. The board approves a N50m contract without her disclosing the interest. She has breached the conflict-of-interest duty. She must disclose, recuse herself, and the contract may be voidable; material related-party transactions may also need members’ approval under CAMA and SEC rules. The reasoning is that governance protects the company, not just the director’s reputation.
Traps
Do not treat “apply and explain” as a tick-box; private companies are not wholly exempt from governance; do not confuse board and member authority; and do not assume a director’s silence is harmless.