CORPORATE LAW 2019 BAR FINALS PAST QUESTIONS AND ANSWERS
NIGERIAN LAW SCHOOL
BWARI – ABUJA
BAR EXAMINATION-PART II FINAL
CORPORATE LAW PRACTICE
TUESDAY 20TH AUGUST, 2019 TIME ALLOWED: 3 HOURS
THIS PAPER IS DIVIDED INTO TWO SECTIONS. TWO ANSWER BOOKLETS ARE PROVIDED. QUESTIONS FORM EACH SECTION SHOULD BE ANSWERED ON A SEPARATE ANSWER BOOKLET. QUESTIONS 1 AND 4 ARE COMPULSORY. ONE OTHER QUESTION FROM EACH SECTION SHOULD BE ATTEMPTED.
WRITE YOUR EXAMINATION NUMBER ON EACH ANSWER BOOKLET.
QUESTION 1 (COMPULSORY)
QUESTION 1 (COMPULSORY)
Read the scenario below and answer the questions following:
(a) Confluence Motors (Nigeria) Plc intends to set up a car manufacturing company in the industrial area of the Federal Capital Territory, having been assured by the relevant agency of the Nigerian government that automobile
manufacturing activities qualifies as a pioneer product. Explain the steps that Confluence Motors (Nigeria) Ple must take to qualify for the grant of pioneer status and the benefits accruable by the grant of pioneer status.
(b) Jomo Oil Kenya (Inc) has secured a large pool of funds from the Kenya Bank of Commerce with which it intends to set up modular refineries in the six (6) geopolitical zones in Nigeria. Highlight four (4) assurances under the extant laws in respect of the proposed investment of the fund by Jomo oil Kenya (Inc) in Nigeria.
(c) Khalifa Global Habitat (U.A.E. Inc.) has been engaged by the Unites Nations Housing For All (UNHFA)to construct five hundred (500) units of two bedroom low cost flats in each of the thirty-six(36) states of Nigeria and the Federal Capital Territory so as to ameliorate the dearth of affordable houses for low income earners in Nigeria. Comment on the eligibility of Khalifa Global Habitat (U.A.E.) for exemption from registration under relevant law(s) in Nigeria.
(d) Assuming the company is eligible for exemption, highlight the document to be attached to the letter of exemption as requested by law.
(e) Following your successful Call to the Bar, your Uncle has given you the first brief to incorporate two (2) companies, namely:
(i) New Age Insurance Broker; and
(ii) China-Nigeria Chamber of Commerce (of which he is the Chairman).
Draft only the limitation of liability clause in the memorandum of
association of the two companies.
(f) Identify the type of companies required by law for the type of businesses proposed in (e) i) and (i) above.
(g) List the documents you will submit for stamping at the Federal Inland
Revenue Service (FIRS) in order to incorporate the companies in (e)(I) and (ii) above.
Elhadino lnsurance Plc was registered on January 4, 2018 with an authorised share caoital of #100,000,000.00 (One Hundred Million Naira) divided into 100,000,000 ordinary shares of N1.00 each. 60% of its authorised share capital was issued at ihcorporation. The relevant excerpts from the company’s register of members and the company’ s register of directors and secretary as at 1incorporation is set out in Tables A and B below:
|4, Ogidi Street, G.R.A., Awka||10,000,000|
|1, Law School Road, Bwari
|3||Godwin Isa||5, Kings Crescent, Surulere,
|4||Daniel Jacob||51, Danube Street, Maitama,||20,000,000|
|4, Ogidi Street, G.R.A., Awka||Chairman/Managing Director|
|1, Law School Road, Bwari
|3||Godwin Isa||5, Kings Crescent, Surulere,
|4||Daniel Jacob||51, Danube Street, Maitama,||Company Secretary
(a) List any other five (5) statutory records that Elhadino Insurance PLC must keep excluding the two mentioned in the scenario.
(b) Identify the contents of the statutory records mentioned by you in (a) above.
(c) Draft the notice of the 2nd Annual General Meeting of the Company.
(d) Advise the company on the code(s) of corporate governance applicabie to the Company.
(e) In the light of the extant code of good corporate governance for public Companies in Nigeria, Comment on:
(i) The propriety of the quantum of shares held by the shareholders in Table A.
(ii) The port-iolio of the Directors in Table B above.
The threat that automation will eliminate a broad area of jobs across the world economy is no longer news. However, there are also reports that Artificial Intelligence (AI) will also create new jobs that are uniquely human which would requlre skilis and trainings that have precedence. Of course Hi-Tech Limited (‘the company’) is one of the major players in the technology market in Nigeria. In order to furtner its Corporate Social Responsibility (CSR), the company Plans to incorporate Ofome Foundation to create awareness about Artificial Intellence and its consequences.
(a) Outline the documents required for the incorporation of the Foundation under Part C of the Companies and Allied Matters Act.
(b) List the categories of persons qualified to be appointed as Trustees of the Foundation.
(c) You have been briefed to incorporate the Foundation and you have concluded the assignment, write a letter to Ofome Hi Tech Ltd attaching the documents you obtained from the Corporate Affairs Commission.
(d) Outline the Statutory Books which the foundation is required to keep under the law in Nigeria.
(e) Assuming you are to incorporate the Foundation as a company limited by guarantee (Ltd/Gree), mention one peculiar step you must take that is not required in the option in (a) above.
PLEASE USE ANOTHER BOOKLET FOR THIS SECTION
QUESTION 4 (COMPULSORY)
Mangola Nigeria Ltd was incorporated on the 5th day of January 2011. The company has three executive directors and three non-executive directors. The company has been posting marginal profit since it commenced business. At the 4th Annual General Meeting of the company, the members resolved that order to turn around the fortunes or the company, the Company will change its status to public company while a loan of #100,000;000.00 will be obtained from Globas Internathonal Bank Plc. The property ot the company located at Warri, Delta State will be charged in order to secure the facility.
Answer the following questions
(a) State rour (4) Ordinary Businesses to be transacted at the Annual eneral Meeting.
(b) State two(2) consequential alterations each to be made in the Memorandum and Articles of Association of the company to bring it in line with its new corporate status.
(c) Advise the Bank on the most suitable debenture it should accept from the Company as well as the appropriate charge to secure it under the Companies and Alied Matters Act. When must the Charge be registered?
(d) Assuming you are the Company Secretary of Mangolo Nig. Ltd.
list the post alteration doumentation you will effect at the Corporate Affairs
(e) Explain three (3) reasons why you will advise a Company to secure
debentures by a floating charge instead of a fixed charge.
Green Pepper Nigeria Plc, a Food and beverages Producing company in Nigeria is now grappling with the harsh economic realities and low patronage by its customers. The company is heavily indebted to its creditors and the debts have remained unpaid over the years inspite of repeated demands from the creditors. The Board of Directors at the company have resolved to restructure the operation of the company.
Answer the following questions:
(a) Mention six (6) legislations on corporate restructuring in Nigeria as a guide for the investment brochure.
(b) Highlight six (6) regulatory institutions on corporate restructuring in Nigeria for inclusion in the investment brochure.
(c) State any three (3) of the various grounds upon which a company may be compulsorily wound up by the cour.
(d) List six (6) persons that can bring a petition for compulsory winding-up by the court
(e) ltemise the steps involved in Members’ Voluntarily Winding-up
Kakaki Company Limited was incorporated on March 30, 2019. The company was formed to take over the business of furniture making carried on by Abel, Zamal and Taniam under the name and style of Kakaki Ventures. The partners are now the directors and shareholders of the Company. Taniam is however also the first Secretary of the Company. The first Board meeting of the company is scheduled to take place on August 20, 2019.
(a) List any four (4) advantages of doing business under the name and style of Kakaki Ventures.
(b) What is the effect of incorporation of Kakaki Company Limited?
(c) Draft the Notice of Meeting of the 1st Board meeting of Kakaki Ltd.
(d) Assuming Kakaki Ltd at its first Board meeting appointed Credit Bank as its Banker, and you have been briefed by the Bank to conduct a search on Kakaki Ltd. Prepare the Search Report.
(e) List four (4) ways that the Companies and Allied Matters Act has enhanced the office of Taniam as Company Secretary.
COUNCIL OF LEGAL EDUCATION
NIGERIAN LAW SCHOOL
BAR PT II EXAMINATIONS
CORPORATE LAW PRACTICE
QUESTION 1( COMPULSORY)
The steps are as follows:
- a) The company must have incurred a capital expenditure of not less than Ten Million Naira.
b). The application must be submitted within one year
c). The application must be made to the Nigerian Investment and Promotion Commission in the prescribed application form accompanied with the following:
- A covering letter addressed to the Executive Secretary of the Commission.
- A copy of the Nigerian Investment Promotion Commission’s Registration certificate;
iii. A copy of the applicant’s Corporate;Affairs Commission Incorporation Certificate;
- A copy of the applicant’s memorandum of Association;
- A copy each of the applicant’s statement of share capital, Form CAC 2 and particulars of persons who are first directors, Form CAC 7;.
- Tax Clearence Certificate;
vii. The regulatory license to operate in the sector or business activity where required;
viii. Copy of the business plan of the proposed or actual project which the pioneer status is sought.
Note that under the Industrial Development (Income) Tax Relief Act, the company is expected to have incurred capital expenditure of not less than #150,000. In practice, the regulations are being applied in order to obtain pioneer status from NIPC and not the substantive law.
3 marks for any 3
The benefits are as follows:
- Exemption of company profit from taxation for the first 3-years of operation.
- The exemption can be extended by one or two additional terms of 2 years
2 marks for any 2
- The assurances under the extant law are as follows:
- Unconditional transferability of capital, profits and dividend;
- Guarantee against expiration of enterprise or capital and in the event of expropriation, compensation will be paid promptly and adequately.
iii. Amicable dispute resolution mechanism chosen by the parties;
- Freedom to invest in any sector in Nigeria except with respect to items in the Negative List.
- Opening of Domiciliary account
- Opening of non-resident Naira account;
vii. Interest accruing from such loan will not be taxed.
4 marks for any 4 point
- Registration at the Corporate Affairs Commission is a prerequisite for engaging in business in Nigeria- S. 54 CAMA. However, by S. 56 some foreign investors/ companies can apply for exemption from registration. By Section 56(1)(b) one of such foreign companies that is eligible for exemption is a company that is in Nigeria for the extent execution of specific individual loan project on behalf of a donor country or international organization. Khalifa Global Habitat (UAB Inc. ) is a foreign company being sponsored by the United Nations Housing For All (UNHFA) to city construct 500 units of two bedroom low cost flats in each of the 36 States in Nigeria and the Federal Capital Territory. The company is therefore eligible for exemption.
- The documents are as follows:
- A certified copy of the charter, statutes, or memorandum and articles of association of the company, or other instrument constituting or defining the constitution of the company, a certified translation of the instrument where necessary.
- he name and place of business of the foreign company outside Nigeria.
iii. The name and place of business or the proposed name and place of business of the foreign company in Nigeria.
- The name and address of each director, partner or other principal officer of the foreign company.
- The names and addresses of some one or more persons resident in Nigeria authorized to accept on behalf of the foreign company service of process and any notices required to be served on the company.
- The business or proposed business in Nigeria of the foreign company and the duration of such businesses.
vii. Particulars of any project previously carried out by the company as an exempted foreign company.
viii. Such other particulars as may be required by the Secretary to the Federal Government.- S. 56(2) CAMA
- i. The limitation of liability clause of New Age Insurance Broke:
“The liability of the members is limited by shares. “
- The limitation of liability clause of China -Nigeria Chamber of Commerce:
“Every member of the company undertakes to contribute to the assets of the company in the event of the company being wound-up where he is a member or within one year after he ceases to be a member, and the costs, charges and expenses of winding-up which shall not be less than N10,000.00”
- The type of company required to be registered for New Age Insurance Broker is a Public limited company.
The type of company required to be registered for China -Nigeria Chamber of Commerce is a company limited by Guarantee.
- The documents to be presented to the Federal Commissioner of Stamp Duties(FIRS) for stamping in order to incorporate New Age Insurance Broke and China -Nigeria Chamber of Commerce are:
(1) Two copies of the Memorandum and Articles of Association;
(2) Form CAC 1.1 – Application for Registration of Company. See Stamp Duties Act Cap. S8 LFN 2004
(a) The other five (5) Statutory Records that Elhadino insturance PLC must keep excluding the two menticonied in the scenario are as follows:
- Index ofMembers
- Register of Interest in Shares;
iii. Register af Directors Shareholdings
iv Register of Charges
- Register ofDebenture Holders
- Minutes Books and Accounting Records; and
vii. Register of Directors Sharcholding