NIGERIA LAW AND PRACTICE Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Rebecca Ebokpo, Jibrin Dasun, Peretimi Akinmodun, Onyinyechi Chima and Princess Otah, ǼLEX
• an increase or decrease in share capital; • the creation, modification or satisfaction of charges; • the appointment of a secretary; • the renewal of statutory registrations such as the NIPC Certificate; and • the renewal of applicable operational licences required for the company’s business activi - ties. In addition, all companies are required to file their annual returns at the CAC, and any person who acquires significant control over a com - pany is required to inform the company, which is then obliged to notify the CAC for entry into the register of persons with significant control maintained by the CAC. These obligations also apply to public companies, except as they relate to the transfer of shares, since the shares of a public company are freely traded on the stock exchange or over-the-counter markets. 3.4 Management Structures The management structure for public and pri - vate limited liability companies is single-tier in nature. This implies that the board of directors is responsible for both management oversight and strategic supervision of the company’s affairs. 3.5 Directors’, Officers’ and Shareholders’ Liability The law puts directors in the position of trustees for their companies, so their primary duty is the fiduciary duty and the exercise of due care, skill and diligence in the discharge of these duties. Therefore, directors are obliged to act in utmost good faith in their dealings with the company, including not placing themselves in a position where there is a conflict of interest between their duties and their personal interests. Directors are also obliged to attend meetings and not to fetter their discretion to vote in a particular way.
Failure to comply with these obligations may constitute a reasonable ground for an action against directors for negligence and breach of fiduciary duty. Directors are also required to declare any personal interest they have in a transaction, whether directly or indirectly. The law also allows for the piercing of the cor - porate veil in order to identify the members and directors of a company in the event that a crime is committed by that company. 4. Employment Law 4.1 Nature of Applicable Regulations The primary law that governs employment rela - tionships in Nigeria is the Labour Act (Chapter L1, Laws of the Federation of Nigeria 2004). However, the Act is limited in scope as it applies only to workers (ie, persons who perform man - ual and clerical roles); it does not apply to non- workers or employees (ie, persons who perform executive, administrative, technical and pro - fessional roles). Rather, their relationship with their employers is governed by the terms of an employment contract, the law of contract and any applicable collective bargaining agreement. 4.2 Characteristics of Employment Contracts Although the Labour Act acknowledges that employment contracts may be oral or written, express or implied, it requires employers to issue employment contracts to their workers no later than three months after the beginning of the employment relationship. The employment contract is required to state the following: • the name of the employer;
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