NIGERIAN LAW SCHOOL 2009 BAR FINALS QUESTIONS AND ANSWERS IN CORPORATE LAW PRACTICE
THE NIGERIAN LAW SCHOOL
BAR PART 11 FINAL EXAMINATION
CORPORATE LAW PRACTICE
WEDNESDAY, AUGUST 12, 2009 TIME: 3.009.0 – 6.00 P.M
READ THE INSTRUCTIONS CAREFILLY:
1. This paper is divided into 2 Sections and 2 Answer Booklets are provided.
2. Questions 1 and 4 are compulsory. One other question from each Section should be attempted.
3. Questions from each section should be answered on a separate Answer Booklet.
4. Write your EXAMINATION NUMBER ON EACH ANSWER BOOKLET
QUESTION 1 (COMPULSORY)
Mr. Paul Trace, a lawyer, was briefed by his client, Mrs. Foy Awa to incorporate a company to be known as Matjoy Textiles Nigeria Ltd. The object/business of the proposed company is manufacturing of textile materials. Share capital is N1,000,000.00 divided into N1,000,000.00 ordinary shares of N1.00 each. Six months after taking instructions and his professional fees fully paid, Mr. Paul did not incorporate the Company. He instead started avoiding her and refused to take her calls. Mrs. Awa later reported the matter to the Chairman of the NBA.
Meanwhile, Mrs. Awa instructed another lawyer (Mr. Ikechukwu Lebo) who finally got the company incorporated for her. Over the years, the company prospered in its business. At the 5th Annual General Meeting of the Company, the members of the company resolved to re-register the company as a public company, and also increase its share capital from N1,000,000.00 to N10,000,000.00 in order to raise fund for expansion purposes.
Apart from the fund raised the public offer of its shares, the Company also borrowed a sum of N20 million from Happy Bank Plc of 20, Benue Court, Apo, Abuja and created a legal mortgage over its property at 6, Ngwa road, Aba, Abia State in favour of the bank, to secure the loan. Legal mortgage was dated 29 May, 2008 and the registration fee payable was N50,000. The legal mortgage was later registered on 15 September 2008. Answer the following questions.
a) Draft the Memo of Association (excluding the subscription clause and subscription box)
b) State matters which will be contained in the ordinary and special businesses to be transacted at the Annual General Meeting of a company.
c) Mention the type of resolution to be passed for the re-registration of the company as a Public company and state two consequential alterations to be made in the Memorandum and Articles of Association of the Company in order to bring them in line with that of a Public Company
d) Draft the resolution increasing the share capital
e) Assuming you are the company Secretary, state two returns (filings) which will be made by the secretary to the CAC and the period for the filing of each return:
f) Complete the attached Form CAC 2 (see page 40)
g) State the statutory time limit for registration of charges and the effect of failure to register it within the time
h) Comment on the ethical and professional implications of Mr. Paul`s conduct towards his client in this scenario and the possible consequences.
Naira Rain Microfinance Bank Plc, one of the fast growing Micro finance banks in Nigeria, has been having difficult business times recently due to the economic meltdown that hit the capital market where it had invested depositors` funds. It could not honour depositors` demands for funds and could not pay accumulated dividend for preference shareholders. Many depositors have planned to stage a mass protest at the Company`s corporate office and threatened to petition the Economic and Financial Crimes Commission (EFCC). The Board of Directors of the Company has consulted you for your advice. Answer the following questions;
a) Outline the various corporate restructuring options available under the Nigerian Corporate Law Practice, and recommend a suitable option to salvage the Company, Naira Rain Microfinance bank Plc
b) Assuming your answer in (a) above favours a scheme of arrangement, involving internal re-organization of the company whereby the depositors and the preferential shareholders would relinquish their credits in lieu of shares in the company, outline the procedure to adopt in actualizing the scheme under the Companies and Allied matter Act of Nigeria
c) List at least three relevant documents that would be prepared under the scheme of arrangement referred to in (b) above
d) Describe the procedure Naira Rain Microfinance Plc would follow should the Company decide to merge with Dollar Rain Microfinance Plc
e) Briefly mention the grounds for revocation of merger approval by the Securities and exchange Commission (SEC)
Mr. Emeka Ade is a sole legal practitioner, based in Abuja. He is one of the Solicitors to Delta Oil Group Plc, based in Port Harcourt, Rivers State, Nigeria. In January 2008, Mr Emeka Ade negotiated the purchase of “Camp Five” oil rig in the Escravos on the instructions of Delta Oil Group Plc from Elyon Producing (Nigeria) Limited for the sum of $100 Million (USD). His client agreed to pay him 5% of the purchase price as professional fees. The relationship of Mr. Emeka Ade and Delta Oil has since turned sour over the Company`s refusal to honour their agreement to pay the professional fees of $5 million (USD) 11/2 years after the transaction, despite repeated demands. He intends to file a petition before the relevant court in Port Harcourt up the Company. Answer the following questions
a) (i) Comment on the chances of success of Mr. Emeka Ade`s proposed action against estranged client. State the appropriate court for the proposed action.
(ii) Draft the petition to be filed to commence the action for winding up on behalf of Mr.
(iii) Draft the Bill of Charges in respect of the above transaction on behalf of Mr Ade Emeka.
b) Prism Investment Ltd was incorporated on May 31, 2008. The first Annual General Meeting (AGM) of the Company is scheduled to take place on August 20, 2009. Mr Babalola holds 15 per cent of the shares of the Company. Alhaji Kokori who holds 10 per cent of the shares of the Company would not be able to attend the AGM of the Company because of his daughter`s graduation coming up in the United Kingdom on the same day.
(i) List the persons who are entitled to receive notice of the AGM under the Companies and Allied Matters Act
(ii) Advise Mr. Babalola who was not given any notice of the AGM on the remedies (if any) available to him under the law
(iii) Mention the financial statements, which the Directors are obliged to lay before the Annual General Meeting on 30 August 2009.
(iv) Advise Mr. Kokori on how his views and opinions can be presented during the AGM
PLEASE USE ANOTHER ANSWER BOOKLET FOR THIS SECTION
QUESTION 4 IS COMPULSORY. One other question from this section should be attempted
At the resumed hearing of some corporate law matters pending at the Federal High Court No 2, Ilorin, Kwara State, Learned Counsel for some of the parties raised some objections/submissions as follows:
(i) The Federal High Court lacks jurisdiction in all matters touching on shares of a company, because these are now matters reserved for the exclusive jurisdiction of the Investment & Securities Tribunal
(ii) An action for rectification of company register is incompetent unless it is commenced by petition since the parties are quarrelling.
(iii) Unless the Directors of a Company convene the general meeting of the company, there is nothing the shareholders can do about it, since such power is exclusively reserved for the Board of Directors.
(iv) Shares of a deceased JOINT shareholder are registered in favour of the deceased shareholder by transmission
(v) Once made a Life Director, only death can terminate the appointment.
(vi) Once a resolution for voluntary winding up is passed, creditors can no longer be involved in the winding up process.
You have been consulted by the Presiding Judge to assist him to conduct research for the rulings:
a) With the aid of relevant authorities, write a reply on points of law only, on each of the objections/submissions raised by Learned Counsel
b) Prepare a checklist of at least three items each on the jurisdictions of the Federal High Court and the Investment and Securities Tribunal
c) Outline the procedure for requisitioning an Extra-Ordinary General Meeting by aggrieved shareholders of a Company
d) State three legal materials you would need to consult in the course of researching on your reply to the objections/submissions above
Dr. Yohanna was employed as the Managing Director (MD) of Orange Bank Nigeria Plc in December 2006. The bank has flourished since he took over the saddle. Miss Lolia Umar was appointed Company Secretary by the Board of Directors in May 2008. In January 2009, Miss Umar was also appointed as the director in charge of Corporate Social Responsibility (CSR). In June 2009, the Bank purchased a plot of land at 77, Broad Street, Lagos, from Chief Oniru for the construction of an ultra-modern public library in Lagos Islnad. Miss Umar atested the Purchase Agreement both as the Secretary and as a Director in order to ensure speedy completion of the transaction. On July 31, 2009, the MD issued Miss Umar a query turning down a dinner date by the managing Director at Transcorp Hilton, Abuja. On August 03, 2009, Her appointment was terminated by the MD for giving an unsatisfactory answer to the query of July 3, 2009. Answer the following questions.
a) Comment on the dual status of Miss Lola in the company in the light of the provisions of CAMA
b) Discuss the validity of the Purchase Agreement attested by Miss Lolia Umar on behalf of the Company
c) Comment on the validity of the reason given by the MD for the removal of Miss Lola as the Secretary.
d) Identify the options available to the Board of Directors in removing Dr Goodluck Yahanna as the Managing Director of the Company.
e) Assuming Dr Yohanna is a non-executive director of the Company, briefly highlight the procedure the Board of Directors should adopt in removing Dr Yohanna from office.
Summary of the activities of the Board of Director of Vintage Express Limited:
(i) 1st Board meeting was held on April 01, 2007 at the Lagoon Hotel, Sokoto.
(ii) 6th Board meeting was held on May 30, 2008. The Directors did not meet physically. One of the Directors who was available in Nigeria signed the resolution forwarded to him by the Company Secretary. The other two directors communicated their consent to the Company secretary via email.
(iii) 8th Board meeting was held on January 8, 2009 at the Company`s Conference hall. Two of the Directors present resolved to form a business named “Vintage Messengers” as a subsidiary of the company. The decision to form Vintage Messenger was subsequently approved by the members in the next AGM.
(iv) 9th Board meeting was held on April 17, 2009 at the company1s conference hall. It was resolved that Vintage Messenger should form a partnership with Mr. XXlling, a Chinese merchant.
Answer the following questions
a) Draft Notice of 1st meeting of Board of Directors held on April 1, 2007
b) Comment on the validity of the resolution passed by the Board on may 30, 2008
c) (i) Advise the company on the validity of the Company setting up “Vintage Messengers”
(ii) Mention the documents, that must be presented to the CAC in order to register the business name,
d) (i) Draft the introductory clause of the partnership Agreement/Deed between Vintage Messengers and Mr. XXlling
(ii) Advise the company on the major steps to be taken to ensure the business between Mr. XXLling and Vintage Messengers does not offend against the law
CORPORATE LAW PRACTICE
AUGUST 12, 2009
a) Draft Memorandum of Association of Matjoy Textiles Nigeria Limited (excluding the subscription clause and subscription box)
FEDERAL REPUBLIC OF NIGERIA
COMPANIES & ALLIED MATTERS ACT, 1990
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
MATJOY TEXTILES NIGERIA LIMITED
1. The name of the company is Matjoy Textiles Nigeria Limited
2. The registered office of the Company is situate in Nigeria.
3. The object for which the Company is established is manufacturing of textile materials and any other businesses incidental to it
4. The Company is a private Company.
5. The liability of the members is limited by shares.
6. The share capital of the Company is N1 million divided into one million ordinary shares of N1 each.
Dated this —– day of —————, 20….
WITNESS TO THE ABOVE SIGNATURES:
QUESTION 1 (b)
(i) Ordinary businesses of the annual general meeting (AGM) include:
(1) Declaration of dividend
(2) Presentation of the financial statements
(3) Presentation of Directors` Report;
(4) Presentation of Auditors` Report
(5) Election of directors in place of those retiring
(6) Appointment and fixing of the remuneration of the auditors
(7) Appointment of members of the audit committee
(ii) Every other business other than the ones mentioned above shall be special business (s. 214 CAMA). Special business of Annual General Meetings include:
(1) Passing a resolution to alter the object clause of a memorandum
(2) Passing a resolution to change the name of the company
(3) Passing a resolution to alter any provision in the memorandum
(4) Passing a resolution to effect winding up by the court
(5) Passing a resolution to wind up voluntarily
(6) Passing a resolution to register a public company as a private company
(7) Passing a resolution to remove a director
(8) Passing a resolution to create reserve capital
(9) Passing a resolution to fill a causal vacancy in the office of auditor, etc
QUESTION 1 (c)
The type of resolution to be passed for the re-registration of a company (ie, that is, for converting the Company from Private Company to Public Company) is Special Resolution –S. 50 (1) (a) CAMA. Consequential alterations to be made in the Memorandum and Articles of Association of the Company in order to bring them in line with that of a Public Company are:
AMENDMENT IN THE MEMO:
a) Name clause will be changed to public limited company (Plc)
b) Status clause will be changed to public company
c) Share Capital Clause to be changed to reflect that of a public company
AMENDMENT IN THE ARTICLES:
a) The name must end with Plc
b) Provision for written resolution must be deleted, since it applies only to private companies
c) Provision for restriction of transfer of shares be deleted, since there is no restriction on transfer of shares in a Public Company
QUESTION 1 (d)
Draft Resolution for Increase in share capital
MATJOY TEXTILES NIGERIA LIMITED
15, Law School Road, Victoria Island, Lagos
SPECIAL RESOLUTION TO INCREASE SHARE CAPITAL
Pursuant to Section lO2(1)
At the General Meeting of the above-mentioned Company held on ………. the ……. day of ………., 20……….., the following resolution was proposed and duly passed:
“ That the amount forming the Authorised Share Capital of the Company be increased to N10 million by the creation of ……………………. Ordinary Shares of each, such new shares to rank pari passu in all respects with the existing Shares in the capital of the Company.
Dated the ………………………. day of ……………….. 20……..
QUESTION 1 (e)
Statutory Returns to be filed by the Secretary of a Company include the following:
a) Annual Returns, to be filed within 42 days of the AGM under s. 370 CAMA
b) Returns of allotments, to be filed within one month of the allotment under s. 129 CAMA
c) Returns of auditors, to be filed within 14 days under ss. 357 and 362 (2) CAMA
d) Consummation of Merger, to be filed within 7 days.
e) Return during receivership, to be filed within 14 days under s. 392 CAMA
f) Court Orders, to be filed within 14 days of making the order under ss. 46 (9), 53 (3) and 90 (4) CAMA
g) Returns on alteration of share capital, to be filed within one month of the alteration under s. 101CAMA
h) Statement of Bank, insurance, companies, to be filed (1) before commencement of business, (2) first Monday in February of every year and (3) first Tuesday in August of every year s. 553 (1) CAMA
i) Registration of Certain resolutions, to be made within 15 days of passing the resolution under s. 237 CAMA
j) Registration of Charges, to be made within 90 days of creating the charge under s. 197 CAMA
k) Notice of change of Directors and Secretaries, to be filed within 14 days of the change under s. 292 (4) CAMA
l) Notice of place where register of Members is kept, to be filed within 28 days under s. 84 CAMA
m) Filing of special resolutions, to be made within 15 days of passing the resolution under s. 237 CAMA
n) Notice of Increase in share capital, to be filed within 15 days of the increase under s. 102 CAMA
o) Registration of appointment of a receiver or a manager, to be made within 7 days of the appointment under s. 206 CAMA
p) Statutory Report, to be filed with the CAC FORTHWITH after sending to members of the company under s/ 211 (6) CAMA. Note that a copy of the Statutory Report must be sent to every member at least 21 days before the date of the Statutory meeting under s. 211 (2) CAMA
q) Court order dissolving a Company on the application of the Liquidator on completion of winding up, to be filed within 14 days of the making of the order under s. 454 (2) CAMA
r) Notice of appointment of liquidator, to be filed with CAC within 14 days of the appointment under s. 491 CAMA. Note that under the same section, notice of appointment of a Liquidator must be published in the Federal Gazette and in at least TWO national dailies within 14 days of the appointment.
s) Notice of Resignation of auditor, to be filed within 14 days of receipt of the notice of resignation under s. 365 (3) (a)CAMA
t) Notice of statutory declaration of solvency, to be filed with the CAC after the date of making of the Declaration but before the passing of the resolution for voluntary winding up under s. 462 (2) (a) CAMA. Note that Statutory Declaration of Solvency, to be effective, must be made within the five weeks immediately preceding the date of the passing of the resolution for winding up and must be accompanied by a statement of the Company`s Assets & Liabilities: see s. 461 (2) (a) CAMA
u) Notice of resolution to wind up voluntarily, to be filed within 14 days of passing the resolution under s. 458 CAMA. Note also that under the same section, notice of resolution must be published in the Federal Gazette and in at least TWO national dailies within 14 days of the resolution.
(any two of the above)
QUESTION 1 (f)
COMPLETION OF FORM CO3.
Please take note that the current Form under the Company Regulations 2012, made pursuant to Sections 16, 585, and 609 of CAMA, is Form CAC 2.4 (Notice of Change of Authorised Share Capital) which is reproduced below. (See Regulation 29, of the Company Regulations 2012. See also the Index of CAC Forms as set out in Schedule 1 of the Company Regulations 2012
CORPORATE AFFAIRS COMMISSION
FORM CAC 2.4
NOTICE OF CHANGE OF AUTHORISED SHARE CAPITAL
Pursuant to Sections 102 & 109
Nature of Business
Brief Details of Business
The Authorised Share Capital of the above named Company has by a special resolution/court order
dated ____________________________day of________________________, 20______________ been
increased/reduced from________________________________ to______________________________
divided into__________________________________ ordinary share of __________________ each.
Signature of Director Name of Director & Tel. No.
i. In the case of increase in authorised share capital, resolution of the company should be attached.
ii. In the case of reduction in authorised share capital, certified copy of court order approving reduction should be attached.
Presented for filing by:
Name: ________________________________________________ Accreditation Number: ___________________
Tel. No. and E-mail: ____________________________________Signature & Date: _______________________
QUESTION 1 (g)
Every charge created by a company must be registered with the CAC within 90 days of creating the charge under s. 197 (1)CAMA. Otherwise the charge created is void against liquidators or creditors of the company
QUESTION 1 (h)
Ethical and professional implications of Mr. Paul`s conduct towards his client in this scenario and the possible consequences: It amounts to breach of trust and breach of professional responsibility, and professional misconduct. He may be sued for refund of the money he was paid. He may be reported to the appropriate disciplinary organs of the Legal profession for necessary disciplinary action. And if found guilty, may be suspended from practice, warned/admonished and be ordered to refund the money. His name may also be struck out from the Roll.
QUESTION 2 (a)
Restructuring options available under the Nigerian Corporate Law Practice include:
a) Merger/amalgamation—ss. 119 to 130 ISA
b) Take-over/Acquisition – ss. 131 to 151 ISA
c) Arrangement & Compromise – s. 537 CAMA
d) Arrangement On Sale – s 538 ISA
e) Management Buy-Out
f) Share reconstruction/Consolidation — s. 100 CAMA
g) Increase in share capital – s. 102 CAMA
h) Reduction of Share capital – s. 106 CAMA
BEST OPTION FOR NAIRA RAIN PLC in the circumstances
Arrangement & Compromise, under s. 537 of the CAMA. Since the company is unable to meet its financial obligations, adopting this option would enable it persuade its creditors and preference shareholders to accept an amount less than what they are entitled to. This would help it bounce back.
QUESTION 2 (b)
PROCEDURE FOR ARRANGEMT & COMPROMISE UNDER SECTION 537 CAMA:
a) Scheme of arrangement and compromise if prepared by the Company
b) Application is then made in a summary way to the Court by the company, creditors or members for an order convene a meeting
c) If the order is granted, then A special resolution passed by the affected class of creditors/shareholders approving the scheme
d) An order of the court sanctioning the scheme as endorsed by the special resolution. This order has no effect unless and until a Certified copy of the same if filed with CAC for registration (s. 539 (4)
e) The Court then refers the scheme SEC for investigation of fairness
f) Written report is made by SEC to the court within a specified period
g) If the court is satisfied as to the fairness of the arrangement or compromise it shall sanction it and the scheme shall become binding on all affected creditors of the company.
h) A copy of every such order shall be annexed to every copy of the Memorandum of Association issued after the order. (s.539 (4)
QUESTION 2 (c)
Documents to be prepared for ARRANGEMT & COMPROMISE
a) Scheme of arrangement
b) Special Resolution of the creditors sanctioning the scheme of arrangement
c) SEC report on fairness or otherwise of the arrangement
d) Order of the court convening a meeting
e) Order of the court sanctioning the scheme of arrangement
f) Notice of Meeting
QUESTION 2 (d)
Procedure for Merger:
Involves three major segments/steps:
(1) Pre-merger notification to SEC
(2) Formal application for approval to SEC
(3) Post –merger notification to SEC
Procedure for Merger:
i) Separate BOD resolution of each merging company to authorize merger
ii) Due diligence on merging companies
iii) Prepare scheme of merger
iv) Pre-merger notification to SEC and submit draft scheme of merger
v) If SEC, approves scheme, then make a formal application to SEC for merger
vi) Application by any of the merging companies for a court-ordered general meeting
vii) Each merging company holds a court-ordered meeting to pass a special resolution to approve the merger
viii) If SEC approves scheme of merger, make an application to court to sanction the scheme of merger
ix) If court sanctions the scheme, register the order with CAC within 7 days
x) Publish court order in at least one daily national newspaper and Federal gazette
xi) Post –merger notification to SEC of completion of merger
QUESTION 2 (e):
Grounds for revocation of merger approval by SEC
(a) Approval was based on incorrect information, for which a party to the merger was responsible
(b) Approval was obtained by deceit
(c) Obligation attached to the approval has been breached by a party to the merger
QUESTION 3 (a) (i):
Mr. Emeka Ade`s chances of success and the court with jurisdiction: He may succeed if he brings the action under the Companies Winding Up Rules and CAMA. The court with jurisdiction is the Federal High Court
QUESTION 3 (a) (ii):
Draft of Winding Up Petition and Bill of Charges
QUESTION 3 (b) (i):
The Persons entitled to receive Notice of a company`s General meeting are:
(1) Every member
(2) Ever personal/legal representative of a deceased/bankrupt member
(3) Every director of the company
(4) Every auditor of the company
(5) The secretary
QUESTION 3 (b) (ii):
The remedies available to Mr. Babalola in the circumstances: Failure to give notice of general meeting to a person entitled to receive it invalidates the meeting, at the instance of the person. Mr. Babalola may apply to have the meeting and its proceedings invalidated, unless the omission to give was due to accidental omission. Mr. Babalola may bring an action under section 300 (1) (a) and (a) CAMA. See Pender v. Lushington; Parker v. Daily News.
QUESTION 3 (b) (iii):
The financial statements are as follows:
(1) Balance sheet
(2) Profit and loss account
(3) Notes on the accounts
(4) Auditors` report
(5) Directors` report
(6) Statement of accounting policies of the company
(7) Statement on the source and application of funds
(8) Value added statement for the year
(9) Five year financial summary
(10) Group financial statement (if a holding company)
See section 334 (2) CAMA
QUESTION 3 (b) (iv):
How Mr. Kokori`s views and opinions can be presented during the AGM: He is entitled to appoint a proxy. A proxy has the same rights during the meeting as the member who appointed him— s 230 CAMA.
QUESTION 4 (a) (i)
MY REPLY: Only the Federal High Court has jurisdiction by virtue of section 251 (1) 1999 Constitution, because the matter relates to the operation of CAMA and the internal affairs of the company. See Garba v. Sheba International Company Ltd
QUESTION 4 (a) (ii)
MY REPLY: Action for rectification of Register of members is commenced by Originating Motion, not by petition
QUESTION 4 (a) (iii)
MY REPLY: This assertion is not correct. The correct position is that a general meeting may be convened in any of the following ways:
(1) BOD may authorize the Secretary to convene a meeting—s.215 (1) CAMA
(2) Member of the company may request the holding of a general meeting, and if the company fails to convene the meeting, the members (the requisitionists) may themselves convene the meeting –see s.215 (2) & (4) CAMA;
(3) Court may order a general meeting to be held – COURT-ORDERED MEETING
QUESTION 4 (a) (iv) :
MY REPLY: This assertion is not correct. Shares of a deceased joint shareholder devolves on the survivor (ie, surviving shareholder) — s. 155 CAMA; Tike Tore Press v. Abina
QUESTION 4 (a) (v) :.
MY REPLY: This assertion is not correct. The general meeting has power under section 262 (1) CAMA to remove all directors, including a Life Director, form office. A Life Director is only exempted from retirement from office by rotation under section 255 CAMA. He is subject to removal under s. 262 CAMA
QUESTION 4 (a) (vi) :
MY REPLY: This assertion is not correct. If the resolution is passed, but the company fails to prepare and file a Declaration of solvency, the winding up may be converted to creditors` voluntary winding up, which will involve creditors—s. 401 CAMA
QUESTION 4 (b) (i):.
Items that fall within the exclusive jurisdiction of the Federal High Court include:
(1) Operation of CAMA
(2) Interpretation of the provisions of CAMA
(3) Winding up of companies
(4) Internal affairs and the running of companies
(5) Matters relating to appointment and removal of directors
QUESTION 4 (b) (ii): checklist of matters in respect of which the Investment & Securities Tribunal has jurisdiction include (see s. 284 (1) of ISA):
(1) Dispute between investors and SEC
(2) Disputes between capital market operators and SEC
(3) Disputes between an issuer of securities and SEC
(4) Dispute between self regulatory organization and SEC
(5) Dispute in respect of administration, operation, and management of collective investment scheme
(6) All appeals from decisions of SEC. The SEC has exclusive original jurisdiction in the following matters:
a. Dispute between or among capital market operators
b. Dispute between capital market operators and their clients
c. Disputes between an investor and securities exchange or capital trade point or clearing and settlement agency
d. Dispute between capital market operators and self regulatory organization
QUESTION 4 (c):
The procedure for requisitioning an EGM (extra ordinary general meeting) by aggrieved shareholders is as follows:
(1) Member or members holding not less than 10 per cent of the shares of the company or 10 per cent of the voting rights must present a 28-day Notice of Requisition to the company, stating their reasons, and signed by the requisitionist(s0
(2) If directors fail to convene the meeting within 21days of the receipt of the notice of requisition, the aggrieved member or members (the requisitionists) or any one of them holding not less than one half of the total voting right of the requisitionists may themselves convene the meeting
(3) The meeting shall be held before expiration of 3 months from that date
(4) the requisitionists are entitled to refunded by the company any incidental expenses incurred in this respect
See section 215 CAMA
QUESTION 4 (d):
The legal research materials include:
b) Constitution of the Federal Republic of Nigeria
c) Investment and Securities Act
d) Companies Winding up Proceeding Rules
e) Good English/Law Dictionaries
QUESTION 5 (a):
Miss Lola can validly occupy the position of the Company Secretary and a Director at the same time. Nothing is wrong with this – s. 294 CAMA
QUESTION 5 (b):
The attestation by Miss Lola is irregular, because under s. 294 CAMA any act required to be done by the secretary and a director must be done by two separate individual/persons.
QUESTION 5 (c):
The removal by the MD is invalid because power to appoint and to remove a Secretary lies with the Board of Directors as a Board under s. 296 CAMA. Besides there is a special procedure for removal of the Secretary of a public company under section 296 (2) to (4) CAMA, which was not followed here
QUESTION 5 (d):
The Board can remove him as the MD under section 64 CAMA. The Board can alternatively get the General meeting to remove him as Director under section 262 or under his contract of service or under the Articles; Once removed as a Director, he loses his position as the MD, because only a Director is qualified to be appointed the MD.
QUESTION 5 (e):
The Board CANNOT remove A NON-EXECUTIVE DIRECTOR under section 64 CAMA. The Board can only refer it to the General meeting to remove him as Director under section 262 or under his contract of service or under the Articles.
QUESTION 6 (a):
Draft Notice of first meeting of Board of Directors
COMPANIES & ALLIED MATTERS ACT
VINTAGE EXPRESS LIMITED
NOTICE OF FIRST BOARD MEETING
You are hereby informed that the first Board Meeting of the Company is scheduled to hold at ……………………… on April 01, 2009 at 10.00am to transact the following businesses:
(1) Appointment of Managing Director
(2) Appointment of Auditors
(3) Appointment of Secretary
(4) Allotment of Shares
(5) Adoption of the Common Seal
(6) Appointment of Bankers
(7) Fixing of the Financial Year
(8) Adoption of Pre-incorporation Contracts
Dated this ……… day of …………….. 2009
QUESTION 6 (b):
A written resolution signed by all directors entitled to attend a Board meeting is as valid as a resolution passed at a Board meeting; the directors do not have to meet physically to pass a resolution — s. 263 (8). However, communication of consent through email is not the same thing as signing the resolution physically. So the resolution is invalid
QUESTION 6 (c) (i):
On validity of a corporate body setting up a business name: The Company can set up “Vintage Messengers” as a business name. It is legal. A corporate body can register a business name. see sections 573 and 574 of CAMA
QUESTION 6 (c) (ii):
The documents, which must be presented in order to register a business name, are:
a) Duly completed Business name Form (Form CAC/BN/Form 1)
b) Passport photographs of partner in the proposed firm
c) Form of Approval of Name — see Regulation 54 of the company Regulations 2012
d) Evidence of payment of filing fee
e) Qualifying certificate of partners/proprietor, if the firm is a professional firm/partnership
f) Updated annual returns in the case of a corporate body — see Regulation 54 of the company Regulations 2012
g) Payment of fees for CTC of Certificate for Display at each branch office — see Regulation 54 of the company Regulations 2012
h) Payment of prescribed Business name registration fees
Note: The Company Regulations 2012 has prescribed additional documents for registration of business name
QUESTION 6 (d) (i):
Draft of introductory part of partnership Agreement/Deed between Vintage Messengers and Mr. XXlling
THIS PARTNERSHIP AGREEMENT/DEED is made the …….day of ……………, 20….. BETWEEN VINTAGE EXPRESS LIMITED (a company registered under part A of CAMA, 1990 with its registered office at……………) trading under the name and style of “VINTAGE MESSENGERS” of …………….of the first part and MR XXling of ………………………………….. of the other part.
QUESTION 6 (d) (ii):
The steps to be taken to ensure the business between Mr. XXlling and Vintage Messengers does not offend against the law: Mr. XXling, being a foreigner, must fulfill immigration requirements under the Immigration Act, —- expatriate quota, business permit, business visa, etc
(1) Registration of company under s. 54 of CAMA
(2) Registration of securities with SEC under ISA
(3) Registration with NIPC
(4) Importation of capital through an authorized dealer and obtaining certificate of capital importation
(5) Registration with NOTAP, where necessary
(6) Registration with the Industrial Inspectorate Division of the Federal Ministry of Industries
(7) Mr. XXlling must obtain business Visa, Expatriate Quota, Business permit, and other necessary permits and approvals