NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi and Toluwalase Oliver-Jude, Jackson, Etti & Edu
Jackson, Etti & Edu RCO Court 3-5 Sinari Daranijo Street Off Ajose Adeogun Street Victoria Island Lagos Nigeria
Tel: +234 1 280 6989 Fax: +234 1 271 6889 Email: jee@jee.africa Web: www.jee.africa
1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements In Nigeria, the principal forms of corporate and busi - ness organisations are governed mainly by the Com - panies and Allied Matters Act 2020 (CAMA). These structures differ in legal personality, liability exposure, regulatory requirements, ownership flexibility and operational complexity. Companies Companies are the most structured form of business organisation in Nigeria. They have separate legal per - sonality, perpetual succession and the capacity to own property, enter contracts and sue or be sued in their own name. Members’ liability is determined by the type of company and is generally limited. CAMA recognises the following principal company forms. • A private company limited by shares is a corpo - rate entity separate from its owner or owners, with perpetual succession and the capacity to sue and be sued in its own name. Members’ liability is lim - ited to the amount unpaid on their shares, and the company is restricted from offering its shares to the public unless authorised by law. It is the most commonly used corporate structure in Nigeria due to its flexibility and suitability for profitmaking activities. • A public company limited by shares also has a separate legal personality distinct from its share -
holders and enjoys perpetual succession. There is no restriction on the number of shareholders, and it may invite the public to subscribe for its shares, subject to compliance with applicable securi - ties and listing regulations. It is a corporate entity designed for broader ownership participation and large-scale capital mobilisation from the public. • A company limited by guarantee is incorporated primarily for non-profit purposes, including the promotion of commerce, art, science, religion, cul - ture, education, research, sports, charity or similar objects. It has no share capital, and members undertake to contribute a specified amount to the company’s assets in the event of winding up. • An unlimited company is a corporate entity in which members have unlimited liability for the company’s debts and obligations in the event of winding up, although the company retains separate legal personality during its existence. This form is uncommon in practice and is typically adopted where members are willing to assume full financial exposure. Partnerships Partnerships involve two or more persons carrying on business with a view to profit. While traditional partnerships are governed by state partnership laws, CAMA recognises enhanced partnership structures that provide greater flexibility and liability protection. • A limited liability partnership (LLP) is a hybrid struc - ture combining partnership flexibility with separate legal personality. It must have at least two part -
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