2011 NIGERIAN LAW SCHOOL BAR FINALS QUESTIONS AND ANSWERS IN CORPORATE LAW PRACTICE
THE NIGERIAN LAW SCHOOL
BAR PART 11 FINAL EXAMINATION
CORPORATE LAW PRACTICE
WEDNESDAY, AUGUST 10, 2011 TIME: 3 HOURS
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
SECTION 1
QUESTION 1 (COMPULSORY)
Vine fields Limited was incorporated in November 2004 with authorized share capital of N1 million. It has been having operational challenges due to financial difficulties, and could not obtain life-saving loan from any bank. When it was about to close down its farming activities in May 2011, the Central Bank of Nigeria announced its approval of N50 million interest-free loan as incentives to any Company in Agricultural Sector which meets the following requirements:
(i) Must be a public Company.
(ii) Must have authorized share capital of not less than N5 million
(iii) Must have at least 2 Directors with a minimum of Bachelors Degree in any agricultural science discipline.
Meanwhile, the Company has only three Directors (Aminu Shehu, Yusuf Oke and Kemi Yaro) who have no qualifications in Agricultural Science. They however own majority shares of the company. The only persons with qualifications are Boyo Usman and Godwin Adams, who are in the employment of the Company as farm Managers. At an Extra-Ordinary General Meeting of the company called to pass certain resolutions to effect the necessary changes that would enable the Company benefit from the loan incentive, three resolutions were proposed, as follows:
(1) Convert and re- register the Company as public Company.
(2) Increase the Share Capital to N5 million
(3) Appoint Adams and Boyo as Directors on the basis of their qualifications.
The Directors, fearing that effecting these changes in the company would whittle down their control of the Company, vehemently opposed the resolutions. Upon demand of poll, they used their voting powers to defeat the resolutions. Many shareholders and the Farm Managers were aggrieved. Thereafter, some of the shareholders led by Okey Ibe and Sheni Osun vowed to challenge the action, and have now consulted you.
a) (i) Identify the legal reasons and the appropriate minority protection suits that could be instituted to revive the resolutions in favour of the Company
(ii) Based on the scenario above, list who should be the plaintiff and defendant in the proposed suit? (iii) Assuming the action was successful, outline out the procedural steps to be taken to re-register the company as a public company
(iv) State the consequential alterations that would need to be made in the Memorandum and Articles of Association of the Company to bring it in line with the status of a public company
(b) (i) Assuming the shareholders have resolved to create additional 2 million ordinary shares of N2.00 each in the capital of the company, outline the necessary documents to be submitted to the CAC and the documents that would be issued by the CAC after a successful registration of increase in share capital
(ii) Detach and complete the attached CAC Form
(iii) Assuming the suit was not successful and the shareholders were left to explore other options for the survival of the company, advise them on the various corporate restructuring options available to the company and recommend any suitable option to revive the company.
QUESTION 2 Dubem Plastics Plc (RC: 95959) was incorporated on January 01, 1995. Its head office is at 4, Wharf Road, Apapa, Lagos. It was initially registered with a share capital of N500,000 but subsequently increased its share capital to N10 million on November 01, 2000 . The Directors are Monday Iloh and Dele Akapa who also hold the shares of the company equally. The company has applied to Access bank Plc for a loan of N40,000,000 in order to boost its business. Answer the following questions:
a) The Bank has asked you to conduct a search on the company prior to granting the facility. Assuming you have finished the search, draft the search report to be submitted to the Bank.
b) State the steps the company will take to increase its share capital to N40 million
c) Draft the resolution required to be passed for the increase in share capital
d) State six statutory books the company is required to keep under CAMA
e) State six statutory returns the company is required to make and the period for making each of these returns
QUESTION 3 First Capital Airlines Limited was incorporated on October 14, 2005 to operate as domestic passenger airlines in Nigeria. The Company recently granted a license to operate direct flight to the United States. The Company has five Directors, three of whom are Nigerians, namely: Chief Oly Alaye, Mrs. Ola Alaye and their eldest son, Gbenga Alaye. The other Directors are Mark Weisman and Richard Boon both of whom are Britons. As a result of its international operations, the Company now wants to re-register as a public Company. As the Company Secretary, you are requested to carry out the following assignments:
a) Prepare a detailed application to the CAC for re-registration of the company as a public company
b) Draft the Memo of Association that will be submitted to the CAC for this purpose
c) Draft the required resolution for re-registration of the company as a public company
and the consequential statutory declaration
d) Outline four consequential alterations to be made in the Memo and Articles upon re-registration as a public company
e) Outline the procedure for change of name of a registered company
SECTION 11
PLEASE USE ANOTHER ANSWER BOOKLET FOR THIS SECTION
QUESTION 4 IS COMPULSORY. One other question from this section should be attempted
QUESTION 4 (COMPULSORY)
The crisis in the Banking sector of the Nigerian economy is not over yet. The CBNS sack of the chief Executives and executive directors of eight banks and injection of N620 billion convertible loans into the bank only averted the crisis for a few months. The subsequent acquisition of qualifying non-performing loans (NPLS) from all the banks by the Asset Management Corporation of Nigeria (AMCON) and injection of equity into banks could not be said to have ended the crisis. According to reports, the negative asset value of the eight rescued banks as at December 31, 2010 stood at N1.28 trillion despite all the efforts of the CBN-appointed management of the Banks. By April 2011, CBN directed that the rescued Banks must devise a strategy for restructuring and capitalization before 30 September 2011 or face liquidation.
a. Comment on the validity of the following strategies employed by the following banks:
i. The General Meeting of Equatorial Trust Bank Limited accepted an oral take-over bid by UBA Plc by a unanimous resolution dated the 14 May 2011 as a result of which the bank was taken over by UBA Plc.
ii. The management of Spring Bank Plc with the approval of the general meeting donated N50 million to the campaign of a prominent political party with the hope that if it wins in the election of May 2011, the party will use its influence to save the bank from liquidation
iii. The Executive Directors of Finbank Plc who are also the shareholders of the bank sold 30 of the 42 branches of the bank to GTBank by a resolution passed at a meeting held without notice to the four non-executive directors of the bank because the non-executive directors are not shareholders of the bank and so had nothing to lose, to put it in their words.
(b) i. Assuming all the directors of one of the rescued banks who are the only shareholders of the bank died in a plane crash on their way to meeting with a core- investor in London, what will be your advice to the creditors of the bank.
ii. Access Bank Plc and Intercontinental Bank Plc have decided to merge.
(A) Mention 3 regulatory authorities that may have roles to play in the business combination.
(B) State 3 laws that will regulate the business combination.
(C) As a solicitor to Access Bank Plc, state 5 areas of Intercontinental Bank you may have to conduct due diligence.
(D) State 5 principal provisions you will include in the merger agreement between the two banks.
(E) State 5 of your roles as a solicitor engaged for the merger of the two banks.
QUESTION 5
Mr. Ayew and Mallam Azeez were appointed directors by the subscribers to the Memorandum of Association of Ace (Nig.) Ltd., which was incorporated on 6th February, 2009. At the Companys Annual General Meeting in March 2010, Mr.Kareem and Messrs Olu Abbey, Nwankwo Chizoba and Adewale Lanre were duly appointed as directors of the Company at the same meeting. On 6th July, 2010, Mr Kareem was convicted by an Enugu High Court for fraudulent misrepresentation to Axe (Nig.) Ltd. The next Annual General Meeting of the Company has been scheduled for 7th February, 2011 at the Confluence Beach Hotel, Lokoja, Kogi State. Mr. Ayew has nominated his 72 year old uncle Chief Kosofe Chukwudi and his 16 year old undergraduate sister Elvisia Obayuwana for appointment as directors at the General meeting. Answer the following question:-
(a) As the company secretary, state the rules applicable to rotation of directors at the Annual General Meeting of Axe (Nig.) Ltd.
(b) What is the legal implication of Mr. Kareems conviction in his capacity as a director of the Company.
(c) Examine the possibility of appointing Chief Kosofe Chukwudi and sister Elvisia Obayuwana as directors of Axe (Nig.) Plc.
(d) Assuming Chief Kosefe Chukwudi has now been appointed a director but he is fond of coming late to meeting and has also recorded a very high level of truancy. The company now seeks to remove him. Chief Kosefe Chukwudi asserted that being a life director, nobody can remove him in any circumstance as long as he lives. Advise the company on the options available to for removing Chief Kosofe Chukwudi.
QUESTION 6
At an Annual General Meeting of Kokobilo Plc, the Chairman, Otunba Koko Kuye arrived 90 (ninety) minutes behind schedule. Chief Obe, a non-executive director was appointed as Chairman by the directors 30 minutes after the meeting was scheduled to commence. Chief Obe was confused about his role as chairman and requested for advice from the company secretary. Gen Theo Adide (Rtd.) appointed his daughter Asabe who is not a member of the company as his proxy because he was away in Canada. Asabe was only told by her father to represent him but wants to be sure of her exact role at the meeting. Greenfields Limited, a shareholder of the company was represented by Binta Gomwalk, a law graduate who is currently on his NYSC programme with the company. The meeting resolved to declare a dividend of 20 kobo per share as recommended by the Board of Directors. It was also resolved that the registered address of the company be changed to No 1, Kokobilo Street, Lekki. Answer the following questions.
a) (i) Comment on the validity or otherwise of the appointment of Chief Obe as Chairman for the meeting
(ii) Assuming Chief Obe was validly appointed, what advice would you give to him on his role as the Chairman
b) Advise Asabe on her role as a proxy at the meeting
c) Comment on the representation of Greenfields Plc by Binta Gomwalk at the meeting
d) Prepare a checklist of the duties of the Company Secretary before, during and after the AGM
CORPORATE LAW PRACTICE
AUGUST 10, 2011
MARKING SCHEME
QUESTION 1 (a) (i)
The general rule is that where wrong is done to the company or there is an irregularity in the mgt of the company, only the company can take steps to rectify or ratify the wrongs or irregularity: see the case of Foss v. Harbottle. However there are exceptions to this rule. The aggrieved shareholders can sue under any of the exceptions, which include:
i) Members Direct action this may be personal action for any wrong done to a members as a member or representative action on behalf of the company
ii) Derivative action
iii) Action/Relief on grounds of unfairly prejudicial and oppressive conduct
iv) Investigation by CAC
v) Action for winding up on just and equitable grounds See sections 300 to 314 CAMA
QUESTION 1 (a) (ii)
PLAINTIFFS: 1. Okey Ibe 2. Sheni Osun (for and on behalf of the aggrieved shareholders of Vinefields Limited) DEFENDANTS: 1. Vinefields Limited 2. Aminu Shehu (Director) 3. Yusuf Oke (Director) 4. Kemi Yaro (Director) QUESTION 1 (a) (iii)
Procedure for re-registration as public company:
1) Board resolution to authorize the re-registration as a public company
2) Convene a general meeting and pass a special resolution to effect the conversion
3) Send the following documents to CAC within 15 days of the passing the resolution:
(i) Application in the prescribed Form to CAC, signed by Director and Secretary
(ii) Copy of Memo & Articles, as altered to reflect the conversion
(iii) Copy of the special resolution passed to effect conversion
(iv) Statutory Declaration by Director & Secretary stating that the the special resolution has been passed and that the paid up capital as at the date is not less than 25% of the authorized share capital
(v) Copy of the balance sheet of the company as at the date of the resolution or the preceding six months, whichever is later
(vi) Statutory Declaration/statement on oath by Director & Secretary stating that the aggregate asset of the company is not less than paid up capital as at the date and that the special resolution required for the re-registration has been passed
(vii) Copy of prospectus or statement in lieu of the prospectus delivered within the preceding twelve (12) to SEC
(viii) Original Certificate of Incorporation
(ix) Prescribed fees
(x) Updated annual returns
(xi) Evidence of payment of FRC annual dues
4) CAC shall consider the application, and if satisfied will approve and re-register the company as a public company and issue a new certificate of incorporation
QUESTION 1 (a) (iv)
CHANGES IN THE MEMO after re-registration as a public company: a) Change in the name clause to change it to PLC b) Change in the status clause, to change it to public company c) Change in the share capital clause, to change it to N5 million
d) Removal of the clause providing for written resolution
CHANGES IN THE ARTICLE: b) Removal of restriction on transfer of shares c) regulation on appointment of directors with respect to age requirement d) requirement and special qualification for appointment of secretary of public company
QUESTION 1 (b) (i)
The following documents must be filed with the CAC within 15 days of the increase:
i. Copy of Special resolution for increase
ii. Statement of the Increase, duly stamped
iii. Duly stamped Notice of Increase
iv. Memo & Articles, as amended to reflect the increase
v. Updated annual returns
vi. Updated section 553 where aplicable
vii. Payment of prescribed fees
viii. Evidence of payment of FRC annual dues
See Regulation 29 of the Company Regulations, 2012
ix. Increase shall not take effect unless within six months of filing Notice of increase, the Directors file with CAC a statutory declaration that not less than 25% of the share capital (including the increase) has been issued Regulation 29 (3) of Company Regulations, 2012
QUESTION 1 (b) (ii)
Filling of Form CAC 2.4 (Notice of Authorized Share capital)
QUESTION 1 (b) (iii)
a) management buy-in
b) merger
c) take-over
d) arrangement & compromise
e) Arrangement on Sale
f) Reduction in share capital
g) Increase in share capital
h) Consolidation/subdivision/cancellation of share capital
QUESTION 2 (a)
. Draft Search Report:
Damian Musa & Co Legal Practitioners 78, Uju Street, Ikoyi, Lagos 08099978886, damianmusaco@yahoo.com
August 10, 2011 The Managing Director, Access Bank Plc 30, Kofo Abayomi Street, Victoria Island, Lagos Dear Sir,
SEARCH REPORT ON DUBEM PLASTICS PLC Kindly refer to your instructions to us, to conduct a search on Dubem Plastics Plc at the Corporate Affairs Commission, Abuja, and please find below our report of the search
1. Date of Search: August 09, 2011
2. Place of Search: Corporate Affairs Commission, Abuja
3. Name of Company: Dubem Plastics Plc
4. Registration Number: RC 95959
5. Date of Incorporation: January 06, 1995
6. Share Capital: N500,000 divided into 500,000 ordinary shares of N1.00 each
7. Increase in Share Capital: Share capital increased to N10,000,000 by an addition of 9,500,000 ordinary shares with effect from May 05, 2000
8. Subscribers: i) Monday Iloh 5,000,00 shares
ii) Dele Akapa 5,000,000 shares
9. Directors: (1) Dele Akapa
(2) Monday Iloh
10. Annual Returns: Nil
11. Registered Charges: Nil
12. Conclusion: From available information, there is no registered charges against the company
Thanks Yours Faithfully, For: Daniel Musa & Co Daniel Musa Esq.
QUESTION 2 (b)
Procedure for Increase of share capital is as follows:
1) Board resolution to authorize the increase
2) Pass ordinary resolution to effect the increase
3) The following documents must be filed with the CAC within 15 days of passing the resolution for increase:
i. Copy of Special resolution for increase
ii. Statement of the Increase, duly stamped
iii. Duly stamped Notice of Increase
iv. Memo & Articles, as amended to reflect the increase
v. Updated annual returns
vi. Payment of prescribed fees
vii. Updated section 553 where aplicable
viii. Evidence of payment of FRC annual dues
See Regulation 29 of the Company Regulations, 2012
ix. Increase shall not take effect unless within six months of filing Notice of increase, the Directors file with CAC a statutory declaration that not less than 25% of the share capital (including the increase) has been issued Regulation 29 (3) of Company Regulations, 2012
4) Ensure that not less than 25 per cent of the increased authorised shares capital is issued within 6 months 5) Statutory declaration by Directors, verifying the increase, which must be delivered to the CAC 6) Obtain Certificate of Increase from the CAC 7) Annex a copy of the Certificate of Increase and the Resolution to the Memo & Articles
NOTE THE FOLLOWING: (a) increase in share capital does not take effect unless:
(b) At least 25 percent of the increased share capital is issued within six months of increase (c) The directors depose to a Statutory declaration by Directors, verifying the increase, which must be delivered to the CAC
QUESTION 2 (c)
Resolution for Increase in share capital
DUBEM PLASTICS PLC 15, Law School Road, Victoria Island, Lagos 08123567789, dubem@gmail.com 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 N1 billion 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
.. Signed: —————- Secretary/ Director
QUESTION 2 (d) Statutory books/records to be kept by a company include:
a) Minute Book b) Register of Members c) Register of Debenture Holders d) Register of substantial interest in shares e) Index of members f) Register of Charges g) Accounting Records h) Register of Directors and Secretary i) Register of Directors` Shareholding
QUESTION 2 (e) Various statutory Returns to be filed by the company (Secretary of a Company) include the following:
1) Annual Returns, to be filed within 42 days of the AGM under s. 370 CAMA 2) Returns of allotments, to be filed within one month of the allotment under s. 129 CAMA 3) Returns of auditors, to be filed within 14 days under ss. 357 and 362 (2) CAMA 4) Consummation of Merger, to be filed within 7 days. 5) Return during receivership, to be filed within 14 days under s. 392 CAMA 6) Court Orders, to be filed within 14 days of making the order under ss. 46 (9), 53 (3) and 90 (4) CAMA 7) Returns on alteration of share capital, to be filed within one month of the alteration under s. 101CAMA 8) 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 9) Registration of Certain resolutions, to be made within 15 days of passing the resolution under s. 237 CAMA 10) Registration of Charges, to be made within 90 days of creating the charge under s. 197 CAMA 11) Notice of change of Directors and Secretaries, to be filed within 14 days of the change under s. 292 (4) CAMA 12) Notice of place where register of Members is kept, to be filed within 28 days under s. 84 CAMA 13) Filing of special resolutions, to be made within 15 days of passing the resolution under s. 237 CAMA 14) Notice of Increase in share capital, to be filed within 15 days of the increase under s. 102 CAMA 15) Registration of appointment of a receiver or a manager, to be made within 7 days of the appointment under s. 206 CAMA 16) 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 17) 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 18) 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. 19) Notice of Resignation of auditor, to be filed within 14 days of receipt of the notice of resignation under s. 365 (3) (a)CAMA 20) 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 21) 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 SIX OF THE ABOVE)
QUESTION 3 (a)
FIRST CAPITAL AIRLINES LIMITED 2, Law School Road, Victoria Island, Lagos 08123456789, firstcapital@yahoo.com
August 30, 201 The Registrar General Corporate Affairs Commission Abuja Dear Sir APPLICATION FOR RE-REGISTRATION AS A PUBLIC COMPANY
We hereby apply for re-registration of First Capital Airlines Ltd as First Capital Airlines Plc, i.e., from a private limited company to a public limited company. For this purpose, we forward the following documents:
(i) Application in the prescribed Form to CAC, signed by Director and Secretary
(ii) Copy of Memo & Articles, as altered to reflect the conversion
(iii) Copy of the special resolution passed to effect conversion
(iv) Statutory Declaration by Director & Secretary stating that the special resolution has been passed and that the paid up capital as at the date is not less than 25% of the authorized share capital
(v) Copy of the balance sheet of the company as at the date of the resolution or the preceding six months, whichever is later
(vi) Statutory Declaration/statement on oath by Director & Secretary stating that the aggregate asset of the company is not less than paid up capital as at the date and that the special resolution required for the re-registration has been passed
(vii) Copy of prospectus or statement in lieu of the prospectus delivered within the preceding twelve (12) to SEC
(viii) Original Certificate of Incorporation
(ix) Prescribed fees
(x) Updated annual returns
(xi) Evidence of payment of FRC annual dues
Thanks, Sir. Yours faithfully, DIRECTOR SECRETARY
QUESTION 3 (b) Draft of Memorandum of Association of the Company
FEDERAL REPUBLIC OF NIGERIA COMPANIES & ALLIED MATTERS ACT, 1990 COMPANY LIMITED BY SHARES MEMORANDUM OF ASSOCIATION OF FIORST CAPITAL AIRLINES PLC
1. The name of the company is FIRST CAPITAL AIRLINES PLC
2. The registered office of the Company is situate in Nigeria
3. The object for which the Company is established is to carry on the business of domestic and international airline passenger services and other incidental businesses
4. The Company is a public Company
5. The liability of the members is limited by shares
6. The share capital of the Company is N500,000 divided into 500,000 ordinary shares of N1.00 each
We, the several persons whose names and addresses are subscribed are desirous of being formed into a Company in pursuance of this Memorandum of Association and we respectively take the number of shares in the capital of the Company set opposite our respective names
S/NO NAME, ADDRESS & DESCRIPTION OF SUBSCRIBER NUMBER OF SHARES TAKEN SIGNATURE
1.
2.
3.
4.
5.
7.
TOTAL SHARES TAKEN
Dated this
day of
, 2011 WITNESS TO THE ABOVE SIGNATURES: SIGNATURE:
NAME:
ADDRESS:
.. OCCUPATION:
QUESTION 3 (c)
FIRST CAPITAL AIRLINES LIMITED 12, Law School Road, Victoria Island, Lagos 08123566789, firstcapital@yahoo.com SPECIAL RESOLUTION TO CONVERT FIRST CAPITAL AIRLINES LIMITED TO FIRST CAPITAL AIRLINES PLC Pursuant to Section
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 Company be re-registered as a public company by the name of First Capital Airlines Plc and that the following consequential alterations be made to the Memorandum and Articles of Association of the Company. Dated the ………………………………….. day of
.. 20
.. Signed: —————- ——————- Secretary/ Director Director
FIRST CAPITAL AIRLINES LIMITED 12, Law School Road, Victoria Island, Lagos 08123566789, firstcapital@yahoo.com STATUTORY DECLARATION BY DIRECTOR & SECRETARY
We, Gbenga Alaye and Betty Ogu, being Director & Secretary respectively of the the abve-named company do hereby make oath and state that:
1. On . at an EGM of the company, the company passed a special resolution to re-register the company as a public company by the name First Capital Airlines Plc 2. That the net asset of the company is N10 million, a sum not less than the aggregate of the paid up capital and the authorised reserves 3. we make this oath in good faith and in accordance with the Oaths Act.
DEPONENTS: —————- ——————- Secretary Director
Sworn to at the Federal High Court Registry, Abuja, this
.. day of
.. 2011
QUESTION 3 (d): CHANGES IN THE MEMO after re-registration as a public company: a) Change in the name clause to change it to PLC b) Change in the status clause, to change it to public company c) Change in the share capital clause, to change it to N5 million
d) Removal of the clause providing for written resolution
CHANGES IN THE ARTICLE: b) Removal of restriction on transfer of shares c) regulation on appointment of directors with respect to age requirement d) requirement and special qualification for appointment of secretary of public company
QUESTION 3 (e):
ANSWER: Procedure for change of name:
1) BOD passes a resolution authorizing change of name
2) Search for availability and reservation of the new name using Form CAC: 1 section (32(1));
3) Pass a special resolution at General meeting effecting the change of name;
4) Deliver the following documents to CAC within 15 days of passing the special resolution (see Regulation 24):
(i) Duly signed copy of the special resolution
(ii) Application Letter to the CAC requesting its consent to the change of name
(iii) Original Certificate of Incorporation.
(iv) Form of approval of name
(v) Application signed by a director and the secretary stating reason for change of name
(vi) Updated annual returns
(vii) Filing fees
(viii) Updated 553 where applicable
(ix) Memorandum and Articles of Association as altered to reflect the new name.
5) CAC, if satisfied, will register the change of name and issue a new certificate of Incorporation to the coy (s. 31 (5) CAMA
6) STEPS TO BE TAKEN AFTER CHANGE OF NAME (Post-change of name Procedure) (i) Alteration of company seal, certificates, Billboards, letter heads etc, to reflect the change (ii) Memorandum and Articles issued after alteration to embody the alteration. (iii) Advertisement of change of name in a daily newspaper circulating nationwide. (iv) Advertisement of change of name in the Official Gazette of the Federation (now the duty of CAC see s.31 (7) CAMA)
Note that change of name does not affect any rights or obligations of the coy nor any pending or contemplated suits by or against the coy (s. 31 (6) CAMA
QUESTION 4 (a) (i)
Take-over bid must be in writing s. 136 ISA. So acceptance of an oral take-over bid is wrong and so renders everything void
QUESTION 4 (a) (ii)
Section 38 (2) CAMA forbids a company from making gifts or donations to political party/organizations. Action of Spring Bank is therefore illegal. Money so donated must be refunded
QUESTION 4 (a) (iii)
Notice of all general meetings of a company must be given to all the directors of the company, whether or not they own shares in the company. It is also immaterial whether or not they are executive or non-executive directors. Failure to give notice of a general meeting to a person entitled invalidates the meeting at the instance of the person that was not invited except where it is proved that the failure was due to accidental omission. Also, failure to give notice of BOD meeting to directors qualified to receive such notice invalidates the BOD meeting ————– 263 CAMA. Longe v. First Bank
QUESTION 4 (b) (i)
Section 248 of CAMA will apply in such a case —- personal representatives of the deceased directors or any one of them may apply to the Court for an order to convene a meeting of all personal reps of the shareholders entitled to attend the meeting, with a view to appointing new directors to manage the company
QUESTION 4 (b) (ii)
(A) Regulatory bodies include:
(1) CBN
(2) SEC
(3) CAC
(4) Nig Stock Exchange
(5) FHC
(B) Applicable Laws
(1) ISA
(2) CAMA
(3) CBN Act
(4) FHC Act
(5) BOFIA
(6) AMCON Act
(C) Areas to conduct due diligence:
(1) Ownership of the Bank
(2) The directors
(3) Date of incorporation
(4) Current banking licence
(5) Filing of annual reruns
(6) All statutory books
(7) Title to properties
(8) All indebtedness
(9) All claims and litigation
(10) Returns to CAC
(11) Legal status of all assets and liabilities
(12) Collective agreement with workers
(13) All agreements relating to all forms of business combinations
(14) All claims and litigations
(D) Contents of merger agreement
(1) Parties
(2) Terms of the transaction
(3) Representation and warranties
(4) Employee matters
(5) Financial statement
(6) Covenants and undertakings
(E) Role of Solicitor in merger transaction
(1) Giving advice
(2) Conducting due diligence
(3) Participating in the negotiation process
(4) Drafting Memo of Understanding (MOU)
(5) Drafting Transaction Implementation Agreement (TIA)
(6) Drafting the Merger Agreement (MA)
(7) Securing all necessary approvals
QUESTION 5 (a)
Rules governing rotation of directors at the AGM
Section 259 of CAMA applies. Unless otherwise provided by the Articles, at the first AGM, all the Directors shall retire. At every subsequent AGM, one-third or the number nearest to one-third shall retire. The first directors to be appointed shall retire first. Where all were appointed the same day, those to retire shall be determined by lot.
QUESTION 5 (b)
Under section 254 CAMA, a person who is convicted o an offence in connection with promotion or management of a company is disqualified from being a director of a company. If he is convicted while a director, he shall forthwith lose his position as a director.
QUESTION 5 (c)
An infant is disqualified from being appointed a director. So Sister Obayuwana cannot be appointed director (s. 257 CAMA). Under section 252 (1) CAMA, when a person 70 years of above of age is proposed to be appointed director of a public company, the person or persons nominating him to be director must disclose his age. And he himself has an obligation to disclose his age to the general meeting, before being so appointed. Failure to disclose attract fine.
QUESTION 5 (d)
Though a life director is not subject to retirement by rotation (section 259 CAMA), yet he is subject to removal under section 262 CAMA. So it is wrong assertion to claim only death can remove him from office.
QUESTION 6 (a) (i)
The Board is entitled to appoint of them a Chairman to preside over the BOD meeting and genera meeting. But if no Chairman is elected or the Chairman is not present within 5 (five) minutes of the time appointed for the holding of the meeting, the directors may chose one of them to be chairman of the meeting. —- s. 263 (4) CAMA. The Chairman of the BOD shall preside over general meetings of the company. But if there is no such chairman or the chairman does not arrive within one hour of the time appointed for the start of the meeting or the chairman is unwilling to act, the directors shall appoint one of the directors to preside. So Chief Kuye`s argument is wrong/hollow, because after one hour of the commencement of the meeting. Though the directors elected another director within 30 minutes, such is only an irregularity which can be rectified by the meeting under section 299 CAMA
QUESTION 6 (a) (ii)
Role/duties of the chairman at an AGM (s. 240 (3) and (4) CAMA):
(1) To preserve order
(2) Ensure proceedings are conducted in a regular manner
(3) Ensure that the true intention of the meeting is carried out
(4) Ensure that all questions raised are promptly decided
(5) Act bona fide in the best interest of the company
(6) He may (where he is also a shareholder) cast his vote, to protect his own interest
QUESTION 6 (b)
A proxy once properly appointed, even where he is not a member of the company, has the right to attend, vote and speak at the general meeting — s. 230 CAMA
QUESTION 6 (c)
Where Company A is a member of Company B, Company A may BY RESOLUTION OF ITS BOARD (or other governing council) appoint any person it deems fit to represent it (company A) at a general meeting of Company B: see s. 230 CAMA
QUESTION 6 (d)
Duties of the company secretary with respect to the AGM:
(i) Before the meeting:
(1) Give 21 day Notice of the meeting
(2) Give additional notice where necessary (s. 222 CAMA)
(3) Ensure Annual report and Accounts are ready
(4) Ensure the venue and all other logistics are in place
(5) Prepare the agenda for the meeting
(ii) During the meeting:
(1) Assist the chairman to endure that meeting complies with the law and all rules
(2) Takes minutes
(iii) After the meeting
(1) Prepare final draft of the minutes
(2) Rile necessary resolutions
(3) File annual returns with audited accounts
See s.298 CAMA for general duties of a secretary
