OBJECT CLAUSES OF A COMPANY IN ITS MEMORANDUM OF ASSOCIATION

FOREIGN COMPANY NOT INCORPORATED IN NIGERIA CAN SUE IN NIGERIA

On this appeal, it was argued by counsel on behalf of the respondent that even though it may be a legal entity in its country of incorporation, it had no artificial personality in Nigeria since the Companies Act is silent on whether a company such as the appellant would be allowed to sue or not. That submission is misconceived. The principle of law that a foreign corporation, duly created according to the laws of a foreign state recognized by Nigeria, may sue or be sued in its corporate name in our courts is part of the common law. The suggestion that a foreign company duly incorporated outside Nigeria should first be registered in Nigeria under the provisions of the Companies Act, 1968 (which was then the applicable statute) dealing with registration of foreign companies, notwithstanding that it does not fall into the category of foreign company” as defined by that Act, is too preposterous and patently inimical to international trade to merit any prolonged or serious consideration. It suffices to say that the appellant company which was admitted by the respondent to be a limited liability company with its registered office in Copenhagen properly sued in its corporate name.

— Ayoola, JSC. Saeby v. Olaogun (1999) – SC.261/1993

CAMA ALLOWS COMPANIES TO RATIFY PRE-INCORPORATION CONTRACT

The intention of the legislature in enacting sections 72(i), 624(i), and 626 of CAMA is quite clear. It is relevant to re-emphasis that the rule of construction of statute is to adhere to the ordinary meaning of the words used according to the intent of the legislature. The provisions of sections 624(1) and 626 make it abundantly clear that existing companies who wish to ratify pre-incorporation contract agreements could do so because the Act (CAMA) applied to them. In section 650(i), the interpretation of words used in part A of CAMA, “Company or existing company means: a company formed and registered under this Act or, as the case may be, formed and registered in Nigeria before and in existence on the commencement of this Act”.

— U. Mohammed, JSC. Societe Favouriser v. Societe Generale (1997) – SC.126/1994

A COMPANY’S LEGAL PERSONALITY DIES AT THE DEATH OF THE COMPANY

A company is a legal person with legal capacity to sue or be sued. That legal personality and capacity continues until the company dies a legal death in the process, and as a result of winding up and dissolution.

– Oputa, JSC. Intercontractors v. National Provident (1988)

NON-REGISTRATION OF COMPANY CHARGES VOIDS IT

The effect of non-compliance with the provisions of section 94 is quite grave. Non-registration at the Companies Registry of charges created by the company, as opposed to existing charges acquired by the company, destroys the validity of the charge. Unless the prescribed particulars are delivered to the Registrar within 30 days of the creation of the charge, it will, so far as any security on the company’s assets is conferred thereby, “be void against the liquidator and any creditor of the company”. But this is “without prejudice to any contract or obligation for repayment of the money thereby secured, and when a charge becomes void under this section the money secured thereby shall immediately become payable”.

– Augie JSC. Bank v. TEE (2003)

CAMA MAKES IT POSSIBLE FOR PRE-INCORPORATION CONTRACT TO BE RATIFIED

All that has now changed in this country for section 72(1) of CAMA makes it possible for a pre-incorporation contract to be ratified by a company after its incorporation and thereby becoming bound by it and entitled to the benefit thereof. There seems to be no dispute in this appeal about this conclusion.

— Ogundare, JSC. Societe Favouriser v. Societe Generale (1997) – SC.126/1994

A COMPANY IN WINDING UP IS NOT DEAD YET; A COMPANY IS DEAD UPON DISSOLUTION

In Progress Bank of Nigeria Plc. V.O.K. Contact Point Holdings Limited (CA 3) (2008) 1 NWLR (Pt. 1069) 514, the Respondent obtained judgment against the appellant (a wound-up bank). The Appellant sought to appeal the decision but the Respondent filed an objection to the capacity of the Appellant to file a Notice of Appeal on the ground that, it was dead and that only its liquidator could file such appeal on its behalf. The Court of Appeal held thus:- “l must say straight away that, there is a world of difference between the winding-up of a company and the dissolution of a company. Under the provisions of Section 454 (1) and (2) of the Companies and Allied Matters Act, 1990, a company dies once the Court orders the dissolution of the company. The revocation of the company/bank and order of Court winding – up same does not indicate its death. The appointment of a liquidator is for the purpose of ensuring the smooth burial of the company. See Nzom v. Jinadu (1987) 1 NWLR (Pt. 51) 553; CCB (Nig.) Ltd V. Onwuchekwa (2000) 3 NWLR (Pt. 647) 65. There is nothing before us to show that Progress Bank of Nigeria Plc has been dissolved. It is so clear that the said bank is under a winding-up proceedings. In such a state, the bank is seriously ill, but not dead. That is the support of Section 417 of the Companies and Allied Matters Act, 1990. My Lords, a company/bank is certified dead on its dissolution, but where the bank as in this case is under winding up proceeding it has not died. It is gravely ill, it can sue and maintain an action in Court, but no action or proceeding can be brought against it except with the leave of the Court. In CCB (Nig) Ltd v. Onwuchekwa (2000) 3 NWLR (Pt. 647) page 65 at 75 the Court of Appeal said: “A company under winding up proceedings has not died. It is still alive but perhaps sick.”