CORPORATE LAW PRACTICE WEEK 5 & 6: CHOICE OF BUSINESS AND NON-BUSINESS ORGANIZATIONS
NOTE: THE CONTENTS OF WEEK 6 ARE FUSED WITH THE CONTENTS OF WEEK 4 AND 5.
WEEK 5
TOPIC: CHOICE OF BUSINESS AND NON BUSINESS ORGANIZATION AND FORMATION (2).
:: SOLE PROPRIETORSHIP.
:: PARTNERSHIP. Not more than 20 else should be registered as a company except a professional partnership. Sued thus: “{name of partners}–trading under the name and style of {name of the business}”. The partnership agreement should be in writing so as to negate certain common-law presumptions[1].
The difference between partnership and Company can be found in cost, capital, registration formalities, membership, liability, legal personality, capacity, borrowing powers and dissolution.
Partnership has juridical personality but lacks perpetual succession or director. Partnerships may be dissolved by acts of the parties, court or operation of law.
Annual Returns should be filed < 30th June.
:: BUSINESS NAME: PART B is the name or style under which a business is carried-Section 588 CAMA.
Administered by CAC registrar general of Compnaies as Registrar general of BN too-571 CAMA. There are BN Registries having offices in branches of CAC under Assistant Registrars.
WHEN TO REGISTER BUSINESS NAME: a business name that is not the full name, surname, and (or) initials, or surname of the business owner (s) must be registered within 28 days of commencing business[2].
Partners who wish not to register must use their surnames, full names, or initials and surnames only. If one partner puts forename and another puts surname or adds ‘&sons’, the appellation must be registered[3] by no more than 20 people Section 573 and 574 CAMA.
A company would be required to register its business name where there is an addition or subtraction to the company’s registered name.
Registration NOT needed if a business is carried on by Receiver or manager appointed by court (just put In Receivership) or addition merely indicates that the business is carried on in succession (just add under new Management).
Note prohibited names discussed earlier. Also prohibited form registering are minors, fraudulent trade practices, etc. 579 CAMA.
PROCEDURE FOR REGISTRATION OF BUSINESS NAME:
– Taking instructions: noting the name, type, principal place of address, full particulars of partners/proprietor, date of commencement of business, postal address, (if company, corporate name and registered office). Branches, whether the business is carried on as agent, trustee, agent of a foreign concern, etc.
– Application for registration should be submitted to the registrar within 28 days of commencement of business. With the above particulars (disclosed in the application) and then signature[4] of individual or each partner or director or secretary (though signature may be dispensed with where necessary).
– In applying, the following should be attached; – Appication form CAC 1, CAC/BN/1, Two passport photograph of each individual/proprietor, TCC of each individual or partner, Qualifying Certificate for professionals, Any other document like Certificate of Proficiency.
– Business name is entered in Register and you are handed over a Certificate of Registration. Domingo v The Queen on registration and registrar’s functions in registration.
– Original certificate of registration is to be displayed in conspicuous part.
– True name be published in all trade Catalogues, business Letter, etc.
– Notice of changes should be lodged at the office where registration was effected. Once they have terminated business, Registrar should be notified within 3 months.
Annual Returns to be filed not later than 30th of Each month. Registrar may refuse illegal and fraudulent registrations.
Registration gives priority and raises a rebuttable presumption of partnership[5] but does not give legal personality[6] -Domingo.
Note the relevant CAC Forms under Part B for registration of Companies[7]. They are discussed at the end.
:: INCORPORATED TRUSTEE[8]: previously under the L(PS)A 1958[9] now Part C CAMA. Any community of persons bound by custom, kinship or nationality or any association established for educational, literary, scientific, social, development, cultural, sporting or charitable purpose Section 590(1) may register. This may be summarised into Religious Bodies, Clubs and Social Cultural Associations, Schools, foundations.
PROCEDURE FOR REGISTRATION OF INCORPORATED TRUSTEES: (SECTION 592)
After taking instructions;
– Application as in CAC/IT/FORM 1 in triplicates with details of the trustees of the applicant body (name, residence, occupation, signature, etc.), name must contain “Incorporated Trustees of …………..”.
– Application be accompanied by;
– CAC/IT Form 1 for availability and reservation of name, – 2 duly signed copies of the Constitution stating its objects; Impression of the Common Seal of the Body, Evidence of Ownership of Land or an undertaking in lieu to own land within 2 years of incorporation. 2 passport photographs of the trustees, Trustees Declaration Form duly sworn to at the High Court (that they are not disqualified from acting as Trustees under the CAMA), document of proficiency, Original Receipt of payment of Prescribed registration fees (20,000); duly signed copy of minutes of the meeting where the trustees were appointed; copy of resolution adopting the special clause; evidence of advertisement in 3 National Dailies.
Read up Section 596-603 very important. On change of name, effect of registration, alteration, etc.
Effect of Registration: The trustees become a body corporate
Change of Name: resolution-> Trustees notify CAC, 28 days publication to entertain objections-> New certificate with altered name.
Alteration of Constitution: by simple resolution of its members and approval of the CAC.
:: COMPLETE STATUTORY FORMS FOR REGISTRATION OF BUSINESS NAMES AND INCORPORATED TRUSTEES.
:: IDENTIFY ETHICAL ISSUES ARISING.
[1] Like the presumption of dissolution upon death of a partner, that partner cannot be suspended or paid salaries, presumption of equal contribution, equal sharing of profit and loss.
[2] a non-lawyer/unaccredited person can register business name
[3] The addition of ‘s’ after two surnames that are the same will not warrant registration, nor will a business carried on in succession or by a receiver/manager.
[4] For illiterates, a jurat should be included and then for minors, their signature should be countersigned by magistrate, LP or police up to ASP.
[5] Nwankwo v Nwankwo
[6] It appears default of registration of BN bars him from enforcing partnership right-584 and contracts entered into during default are unenforceable but not void and disability can be remedied by order of the High Court granted if satisfied that the default was accidental or inadvertent or order is deserving and just.
[7] CAC/BN/A1, A2, A3, A4, B1-6.
[8] Trustees to take advantages of the incidences of incorporation. The Trustees must be persons with legal personality not infant, unsound, bankrupt or convicted for fraud or offence involving dishonesty within 5 years preceding his appointment. Useful where affins want corporate status, also professional bodies like NBA, NMA, Foundations, and so on.
[9] Although repealed, previous registrations are still valid S 612.
