Company Formation, Types, Registration and Constitutional Documents
Types and formation
CAMA 2020 recognises private companies limited by shares (Ltd), public companies (Plc), companies limited by guarantee, unlimited companies, and single-member companies. A private company may have one member; a public company requires at least two. Every company must have at least two directors, though the Act relaxes requirements for small and single-member companies.
Steps: name reservation with the CAC; application with the memorandum and articles (or adoption of model articles), notice of registered address, particulars of directors and secretary, statement of compliance, and prescribed fees; then the certificate of incorporation, which is conclusive evidence of incorporation.
Constitutional documents
The memorandum states the company's name, registered office, liability of members and capital; objects may be unrestricted unless the articles restrict them. Articles govern internal management and bind the company and members as a contract (Hickman v Kent or Romney Marsh Sheep-Breeders' Association). They may be altered by special resolution (75%) subject to CAMA and class rights; alteration cannot be used to expropriate minority rights.
Worked example
A private company wants to convert to Plc to raise capital. It must pass a special resolution, ensure at least two members and the required minimum issued share capital, amend the articles to reflect public-company status, and file with the CAC. Reasoning: conversion is a statutory process, not merely a rebranding.
Traps
Assuming an objects clause is compulsory; forgetting the certificate's conclusiveness; treating an ordinary resolution as sufficient for conversion; confusing a company limited by guarantee (no share capital, profits not distributed) with a company limited by shares.