24 Oct






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.



During the medical Tourism Fair which held between April 1 to 5, 2011 in New Delhi, India, Dr Indira Jaheed and Dr . (Mrs.) Raila Kumar of the famous New Delhi Cardiovascular Centre of Excellence (India) Inc. signed a memorandum of Understanding with the Chairman/ CEO of the Abuja-based Primus Specialist Hospital (Nig )Limited, Prof Likita Igwe, towards setting up a medical center of Excellence in Abuja to be known as Abuja Cardio-Vascular Center of Excellence. They intend to register a public company. Details of the proposed company:

(1) Alternative Name: International Cardiovascular Specialist Hospital, Abuja
(2) Proposed share capital: n1 billion
(3) Class of shares:
a. Ordinary shares — 600 million at N1.00 each
b. Non-cumulative preference shares – 100 million at N4.00 each
(4) First shareholders/directors:
a. Dr Mrs Raila Kumar of 100 Nehru Crescent, New Delhi, India to take 100% of preference shares;
b. Dr. Indira Jaheed of 1, Pandit Road, New Delhi, India, to take 60% of entire ordinary shares;
c. Prof Likita Igiwe of 20 Peace Road, Maitama, Abuja, to take 40% of ordinary shares.
(5) Object of the company: prevention, cure and management of cardio-vascular ailments including heart transplant and cardio vascular consultancy services in all its ramifications.
You have been briefed by the promoters to facilitate the incorporation of proposed Company and also serve as Company Secretary of the company,

Applicable charges and fees :
a) Stamp duty (ad valorem) at N7,500 per N1 Million.
b) Filing fee at CAC for Company at N20,000 per N1 Milion.
c) CTC of Memorandum and Article of Association= N7,500.00.

Answer the following questions.

a) Detach and complete all the attached CAC Forms
b) Draft the following clauses in the Memo of Association
(i) Share capital
(ii) Object
(iii) Name
(iv) Type of company

c) (i) Calculate the stamp duty payable to the FIRS on the proposed share capital
(ii) How much will you pay as solicitor for filing and CTC of incorporation documents at the CAC
(iii) Mention the incorporation documents (as well as the number of copies of each) that would need to be submitted to FIRS stamping

(a) Following the violent crisis which erupted in some parts of Nigeria after the presidential elections, a body known as “Northern Youths For Peace & Stable Democracy” (NYPSD has embarked on an aggressive enlightenment campaign across the North to sensitize the youths and urge them to explore dialogue and other constitutional mechanisms for conflict resolution. The organization has engaged your services towards registration of the body under part C of CAMA.

(i) Assuming they decide to register the body/organization under part C of CAMA, mention the documents to be submitted to CAC for the registration
(ii) State the differences between registering an Incorporated Trustees under part C of CAMA and registering a Company Limited By guarantee under part A, CAMA
(iii) (A) Assuming the body has been registered and now desires to be dissolved, who can present the petition for the dissolution of the body?
(B) What are the likely grounds for dissolving the body?

(b) Enugu State Government is desirous of developing the infrastructural base of major towns in the State, but is worried over the people’s apathy towards taxation and massive protest that may follow if the government decides to raise over N20 billion required to fund the project through taxation. The government is therefore exploring the option of raising the N20bilion by issuing a Bond to the investing public. The government is also interested to know more about the collective investment scheme, and how its rural dwellers could benefit from the scheme.
(i) Advise the Enugu State Government on at least three conditions for valid issuing/floatation of government bonds
(ii) Outline at least three documents to be attached to application to SEC for approval of the bond issue
(iii) Advise he State Government on how to set up a Community Savings Scheme for its rural dwellers under the Investment and Securities Act, 2007
(iv) Distinguish between ownership of SHARES in a Company and investment in a Collective Investment Scheme
(v) State at least three types of Collective Investment Schemes Available under Nigerian law


Your clients, Timpreye, Wandde and Chukwudi have consulted you for your advice on the following. Advise them on the legal issues arising out of the facts.

(a) Timpreye is a shareholder in Bonjour Company Limited which has an authorized share capital of N10million. He owns shares worth N1 million in the Company. Whilst the company has been paying salaries to directors regularly, dividends have not been paid to members for the past five years. Timpreye complained bitterly about the situation at the last Annual General Meeting (AGM) of the Company and since then he has not been invited to any general meeting of the company. At the last Extra-Ordinary General meeting to which Timpreye was not given any notice, Nonye was removed as a Director of the Company while Misan was appointed to replace her at the same meeting.

(b) Wande owns 10,000 shares in Page Makers Limited. He wants to sell 4,000 shares to Bimbola and 2,000 shares to Folashade but does not know how to go about it. Advise him on the procedure for transfer of the share.

(c) Chukwudii holds 5,000 shares in Hip Hip Limited. He had financial difficulties when his shop at Oshodi, Lagos was demolished by the Lagos State Government. His friend, Emeka, lent him N500,000. He deposited his share Certificate with Emeka as security for the loan. However before Chukwudi could finish repaying the loan, Emeka had forged Chukwudi’s signature in an instrument of transfer and transferred the shares to himself. Emeka was registered as a member of the Company. Emeka later transferred the same shares to Nnamdi who is unaware of the earlier forgery by Emeka. Advise all the parties on their rights


QUESTION 4 IS COMPULSORY. One other question from this section should be attempted


(a) Mr. Harold Achike, the current Registrar of the Institute of Chartered Accountants of Nigeria (ICAN) was unanimously appointed in May 2010 as the Auditor of Money-Gate Finance Plc during the Company`s 5th Annual General Meeting held in May 2010. However, during the Board of Directors’ meeting in July 2010, Chief Yusuf Kunle , a director, proposed a motion for the removal of Mr. Achike as the Auditor of the Company on the following grounds:

(i) The appointment was invalid because it ought to be made by the Board of Directors.
(ii) The Auditor’s independence could not be guaranteed in view of his affinity with ICAN and having previous dealings with the company as its Budget Analyst in the 2009 financial year.

Mr. Achike was subsequently removed by the Board consequent upon which he was refused entry to the venue of the company’s Annual General Meeting held on May 7, 2011. Answer the following questions

(i) Comment on the validity of the grounds proposed for the removal of Harold Achike
(ii) Was refusal to allow Mr Achike entry into the venue of next AGM valid?
(iii) Comment of the validity of the procedure adopted for the removal of Mr. Achike as Auditor?
(iv) Assuming Mr Achike`s removal was invalid, describe the appropriate procedure for the removal of an auditor of a company

(b) Comment briefly on the following:
At a meeting of the Board of Directors of Big Deal (Nig) Plc, a proposal was made to downwardly review the Chairman`s remuneration. Chief Osas Femson, the Board Chairman, arrived the meeting, which held at the Emirate Hotel, Dubai, UAE, ten minutes after the meeting commenced. Before Chief Femson`s arrival, Dr Jones Farouk, one of the Directors, had been appointed by the Board to act as Chairman. The Board thereafter resolved to drastically reduce the Company`s overhead. It was also resolved that the Chairman`s remuneration be reduced by 40%. Chief Osas Femson is greatly displeased and has briefed you to seek an order of Court nullifying the purported meeting of the Board on the following grounds:
(i) That the board ought to have waited for his arrival before commencing; and
(ii) That the Board meeting of every Company registered in Nigeria must hold in Nigeria.
(c) Mr. James Abubakar is a Director and the Company Secretary of Jumbo Bank (Nig.) Plc. Following a successful public offer of the Company’s shares, he completed Form CAC 2 and signed in his dual capacity as both a Director and the Secretary, in readiness for filing at the Corporate Affairs Commission. Comment on the regularity of Mr Abubakar`s conduct.

(d) On March 1, 2011, Mr. Kayode Ojo was suspended from office as the Managing Director of Wetland Bank (Nig.) Plc by the Board of Director over huge loan facility he had approved for Mega Oil and Gas (Nig.) Plc without following the Bank’s due process. At a subsequent Board meeting held on April 25, 2011, of which Mr. Kayode Ojo was not notified, he was summarily relieved of his position as the MD. Advise Mr. Kayode Ojo on the remedies (if any) available to him


Goodyear Transport Plc which was the “ Best transporter of the year” in 2007 has been incurring losses for over three years now due to operational deficiency to the extent that 50% of vehicles in its fleet have been grounded. Also, the Company has not been able to settle the sun of N100 million only hitherto granted by Enugu Micro Finance Bank as credit facility to augment its working capital and repayable in December 2010, for which, it used its head office building at No, 10, Zila Avenue as collateral for the facility. In addition, the Board of Directors of Goodyear Transport plc has postponed indefinitely the forthcoming Annual General Meeting of the Company fearing that the aggrieved shareholders might hijack the meeting to remove them from office for non-performance. However, a group of some aggrieved shareholders led by Chief John Hopeman (a substantial shareholder of the company) has consulted you for your advice on the followings:

a) A team of restructuring consultants has proposed that Goodyear Transport should rebrand itself by selling its available assets to best Year Transport Plc, and then merge with Best Year transport Plc. Outline the procedure the company should adopt to restructure internally a prelude to merger with another company.
b) Advise the aggrieved shareholders on the possibility of holding a general meeting of the Company in the event of the Board of Directors` continued postponement of the AGM and state the procedure involved in holding the meeting
c) Assuming the shareholders are desirous of resuscitating amidst its present difficulties and have commenced preliminary discussions with Bestyear Transport Plc, advise the shareholders on the various options of corporate restructuring available under Nigerian corporate law practice and recommend the appropriate option

Al- Gaskiye Nigeria Plc was incorporated on September 30, 2010 .The company has two Directors and because the Companies and Allied Matters Act has made it compulsory for all companies to have company secretary, one of the Directors, Mr. Illiasu Dandabo doubles as the Company Secretary. The Board of Directors of the company later decided to employ a Company Secretary because of the amount of workload on Mr Dandabo, advertisements were placed, candidates were shortlisted for interview, among which was your humble self. At the interview conducted on February 02, 2011, you were confronted with the following questions: Give a brief response to each of the questions.

(a) What is the position of the law with respect to one person doubling as both the Company Secretary and a director of the same company?

(b) As a Company Secretary, some of your duties will be to draft notice of meetings, attend all meetings and to advise on compliance with the rules
(i) When should the company hold its statutory meeting?
ii) What are the businesses transacted at the statutory meeting?

(c) (i) When should the company hold its 1st AGM (annual general meeting)?
ii) What are the businesses transacted at the AGM?

(d) Draft a resolution for change of the company name

MAY 2, 2013



Completion of CAC Forms


(1) NAME: The name of the Company is Abuja Cardio-Vascular Centre of Excellence Ltd
(2) Object: The object for which the company is established is prevention, cure and management of cardio-vascular ailments including heart transplant and cardio vascular consultancy services in all its ramifications and all incidental matters
(3) STATUS OF COMPANY: The Company is a public company
(4) TYPE OF COMPANY: The liability of members is limited by shares
(5) SHARES CAPITAL: The authorized share capital of the company is N1 billion divided into 600 million ordinary shares of N1.00 each, and 100 million Non-cumulative shares of N4.00 each.


(i) Stamp duty payable: is N7.5 million (at 7,500 per million)
(ii) Filing fees for a public company at N20,000 per million is: N20 million for one billion naira
(iii) The incorporation documents that must be submitted for filing, the number of copies each to be submitted are:
a. Memo & Articles (2 copies)
b. Statement of authorized share capital (2 copies)


QUESTION 2 (a) (i)
(1) Form of Approval & Reservation of Name (CAC 1)
(2) Application letter, signed by the chairman and secretary of the association or by their solicitor
(3) Prescribed application form for registration of Trustee – CAC/IT/1
(4) Original copy of newspaper publication
(5) Two copies of the applicant/association`s Constitution
(6) Extracts of the Minutes of the meeting where the Trustees were appointed
(7) Minutes of the meeting where the Special Clause was adopted
(8) Sworn Affidavit by each trustee that, he/she is not disqualified under CAMA
(9) Impression/drawing of the of the association`s common seal
(10) 2 passport photographs of each trustee
(11) Evidence of land ownership or undertaking in lieu of this
(12) Letter of authority from the association to the solicitor conducting registration on the association`s behalf
(13) Evidence of payment of prescribed registration fees
(14) Notice of Situation of the Address of the association or any changes therein
(15) Evidence of payment of filing fees
See Regulation 65 of the Company Regulations, 2012

QUESTION 2 (a) (ii)


(1) Incorporated Trustees (IT) are registered under part C of CAMA, whereas Company Ltd By Guarantee (CLG) is registered under part A, CAMA
(2) Consent of the AG, Federation is required to register a company Ltd By Guarantee (CLG) . Such consent is not necessary for Incorporated Trustees (IT)
(3) Constitution not required for Incorporated Trustees, unlike Company Ltd By Guarantee
(4) Memorandum & Articles of association not required for Incorporated Trustees, unlike Company Ltd by Guarantee
(5) Payment of stamp duties not necessary for incorporated trustees, unlike Company Ltd By Guarantee
(6) Company Ltd By Guarantee has Directors, unlike Incorporated trustee which have Trustee
(7) Newspaper publication is required for Incorporated Trustees, unlike Company Ltd by Guarantee
(8) CLG may do business while It may not

Note the similarities between the two:

(a) Both attract tax exemption
(b) Both are non-profit oriented
(c) Both are governed by CAMA
(d) In the event of dissolution, assets of both are not shared among members, but must be given out to another organization with similar objects

QUESTION 2 (a) (iii)

a) Any of the following can present the petition for dissolution of a body registered under Part C or CAMA:
(1) The Governing Council of the Body
(2) Not less than 50 % of members
(3) The CAC
(4) One or more of the body`s Trustees

b) Grounds for dissolving Incorporated Trustees
(1) Aims and objectives fully realized
(2) Objective has become illegal or contrary to public policy
(3) Body was formed for a specified duration, which has expired now
(4) On just and equitable grounds


QUESTION 2 (b) (i)

Conditions for issue of government bond:
(1) Amount to be raised or the outstanding loan should not be more than 50% of capital revenue of the government for the preceding year
(2) Bond must be registered with SEC
(3) Date of redemption of the bond must not be more than 25 year from the date of issuance of the bond
(4) Separate sinking fund shall be established for each loan
(5) Bond certificate should be issued to bong-holder within 2 months of its issues
(6) Legislation or resolution of the State house of Assembly in support of the bond issue must be submitted to the office of the Accountant-General of the Federation

QUESTION 2 (b) (ii)

Documents to be attached to an application to SEC for approval of a bond issue

(1) Copy of the legislation or resolution of the House of Assembly
(2) Copy of the rating report by an accredited rating agency registered by SEC
(3) Irrevocable letter of authority issued by the State Accountant General to the Federal Accountant General, to deduct from the source (from the state`s statutory allocation) to redeem the bond raised

QUESTION 2 (b) (iii)
Procedure for setting up a Community Savings Scheme:
(1) Register it with SEC
(2) Establish it within the Local Government area where the promoters and participants reside
(3) Submit registration Form in the Prescribed form to the relevant Local Government Area

QUESTION 2 (b) (iv)
Distinction between ownership of SHARES in a Company and investment in a Collective Investment Scheme:

(1) Investors in collective investment scheme (CIS) have participating interest whereas shareholders are members of the company
(2) Shareholders invest in an identifiable company whereas CIS may involve more than one company
(3) Participants in a CIS are called bond-holders while owners of shares are called shareholders

QUESTION 2 (b) (ii)
Examples of Collective Investment Scheme in Nigeria

(1) Unit Trust Scheme
(2) Real Estate Scheme
(3) Investment Trust Scheme
(4) Community Savings Scheme
(5) Any scheme designated as a Collective Investment Scheme by CAC and published as such in the Official Gazette


(i) Executive Directors are entitled to salaries/remuneration. This is usually provided in their contract of service — s. 268 (1) CAMA. So it is not illegal. Even the non-executive may be paid salaries, as may be determined by the general meeting — s. 267 (i) CAMA
(ii) Divided is only paid when it is declared. If the company declared NO dividend, the directors cannot pay dividend. And if no dividend is declared, shareholders are not entitled to it. A shareholder is only entitled to dividend when dividend is declared: s. 379 CAMA
(iii) Mr. Timpreye has a personal right to be invited to all general meetings of the company. Failure to invite him is a breach. And the meeting and all its proceeding are VOIDABLE at his instance. He can sue for declaration and injunction — see 1. 300 (1) (c) CAMA and s. 310 CAMA. See also Pender v. Lushington
(iv) A director can be removed at a general meeting and another appointed in his place — see s. 262 CAMA

Procedure for transfer of only a part of a shareholder`s shares:

i) The vendor (Mr. John) executes the instrument of transfer in favour of the purchaser (Mr. George)
ii) Send the following to the company:
(i) Notice of transfer
(ii) Copy of the instrument of transfer
(iii) Original copy of the share certificate.
iii) Company endorses on the instrument of transfer the words’ “Certificate Lodged.”
iv) The endorsed instrument is then given to the purchaser in exchange for the price.
v) The purchaser executes and sends it to the Company for registration. (section 157)
vi) Company registers transfer and issues new Share Certificate to purchaser within three months (for the 2 million shares sold to him) and also a new share certificate to the transferor for 1 million shares
vii) Enter name of purchaser in the register of members

Emeka is liable for the fraud, if found guilty – 157 (3) and (4) CAMA.
(1) If company is found to have connived with Emeka of is otherwise in default, it will be liable, but it is not in this case, except evidence of negligence/default is shown against the company
(2) Company is stopped from denying the truth or accuracy of statements in share certificates issued by it, so company cannot deny Nnamdi`s title to the shares—147 (1) CAMA
(3) Nnamdi is owner of the share by virtue of his being a bona fide purchaser for value without notice
(4) Emeka is liable to indemnify the commandant for any loss in this respect—147 (3) CAMA

QUESTION 4 (a) (i):

Comment on the grounds for the removal of Mr Achike:

—– Appointment of auditor is by the general meeting. So ground one is invalid – s. 357 CAMA. Only the first appointment 9for a newly established company) is made by the Board
—– Mr Achike`s affinity with ICAN is not relevant to his removal as auditor. That ground is therefore invalid
——- the fact that Mr. Achike has had previous dealings with the company in 2009 as Budget Analyst is a valid ground – see s.358 CAMA: a person shall not qualify for appointment as company auditor if
(1) He is a servant/officer of the company
(2) He is a partner in the Firm of a servant/officer of the company
(3) He is connected with or to the company in any manner

QUESTION 4 (a) (ii):

The refusal is NOT valid. This is because auditors hold their appointment from one AGM to the next AGM, and can only be removed at an AGM of the company the removal by the Board is invalid and so ineffective. Therefore, being still an auditor, he is entitled to attend the next AGM — 357 CAMA

QUESTION 4 (a) (iii):
Procedure adopted in removing him was invalid. By virtue of 362 CAMA, only the general meeting has power to remove company auditor. Purported removal by the Board is invalid

QUESTION 4 (a) (iv):

(1) Those proposing removal will give 28-day special notice of it
(2) Company on receipt of the notice, will give the auditor concerned a 7-day notice
(3) Company shall convene a general meeting. Notice of meeting must be sent to all entitled, including the concerned auditor, and must be accompanied by any representation/defence made by the auditor concerned
(4) At the general meeting, pass an ordinary resolution removing the auditor
(5) File notice of removal with CAC within 14 days
(6) Auditor is entitled to compensation for wrongful removal


(i) Chief Femson`s first argument/ground holds NO water; if after FIVE minutes of commencing of any Board meeting, the chairman is not present, the Board may elect one of their own to act as Chairman. This is what was done here. And it was right — s. 263 (4) CAMA
(ii) Board meeting may be held anywhere in the world — see 263 (1). So Chief Femson is also wrong on the second ground

There is nothing wrong in being the Company Secretary and a Director at the same in the same company. But acts required to be done by a director and the secretary must be done by two separate individuals; it cannot be done by one person acting as both director and the secretary –294 CAMA

Every Director of a company is entitled to be given at least 14 days native of every Boar meeting, except the director is otherwise disqualified from attending the meeting –266 (1) and (2) CAMA. Failure to invite a director who is entitled renders the meeting and all its proceedings void.— 266 (1) CAMA. Failure to give Mr Kayode notice of the meeting invalidates the meeting. See also Longe v. First Bank.

The internal restructuring it would carry out as a prelude to merger is arrangement and compromise under s. 537 CAMA. But if it is to sell its assets, the Procedure is for Arrangement on Sale under section 538 CAMA as follows
(1) Board resolution to authorize the arrangement
(2) Convene an EGM of the company
(3) Pass a special resolution to appoint a Liquidator to sell off the company`s assets
(4) Liquidator does his job
(5) Proceeds of sale would be distributed among members
(6) Note the position in relation to DISSENTING SHAAREHOLDERS

Procedure for requisitioning an EGM of a Company:
(i) Member or members holding not less than 10% of the company`s shares or representing at least 10% of the voting rights may REQUISITIONJ THE MEETING. The procedure for requisitioning an EGM (extra ordinary general meeting) by aggrieved shareholders is as follows:
(ii) Members holding not less than 10 per cent of the shares of the company or 10n per cent of the voting rights must present a 28-day notice of requisition to the company, stating their reasons
(iii) If directors don’t convene the meeting within 21days of the receipt of the notice of requisition, the aggrieved member or any one of them holding not less than one half of the total voting right of the requisitionists may themselves convene the meeting
(iv) The meeting shall be held before expiration of 3 months from that date
(v) The requisitionists are entitled to refunded by the company any incidental expenses incurred in this respect —– See section 215 CAMA


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

There is nothing wrong in being the Company Secretary and a Director at the same in the same company. But acts required to be done by a director and the secretary must be done by two separate individuals; it cannot be done by one person acting as both director and the secretary –294 CAMA


(i) A public company must hold the statutory meeting within SIX months from the date of incorporation of the company.
(ii) Businesses transacted at the Statutory meeting:
a. To discuss the Statutory Report
b. To discuss matter relating to incorporation OF THE Company and commencement of business

(i) Every company must hold its first (1st) AGM within EIGHTEEN MONTHS from the date of incorporation of the company.

(ii) Businesses transacted at the AGM: ordinary business and special gusiness.
(i) Ordinary businesses of the annual general meeting (AGM) include:
(1) Declaration of dividends
(2) Presentation of the financial statements
(3) Presentation of Directors;
(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) Special business of Annual General Meetings include any business NOT mentioned as part of the ordinary business. Special businesses 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
QUESTION 6 (d): Resolution for change of the name of a company;

15, Law School Road, Victoria Island, Lagos
08123567789, algasnp@yahoo.com

Pursuant to Section 31 CAMA

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 name of the company be and is hereby changed to ………………………………… and that the Company Secretary be and is hereby authorized and directed to take all steps as may be necessary or proper for effectuating the change.

Dated the ………………………………….. day of ……………….. 20……..


Secretary/ Director


Quite eccentric really

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