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Companies and Allied Matters Act 2020 · Part B · Chapter 1

Section 20 Capacity of individual to form company

(1)
Subject to subsection (2), an individual shall not join in the formation of a company under this Act if he is—
(a)
less than 18 years of age ;
(b)
of unsound mind and has been so found by a court in Nigeria or elsewhere ;
(c)
an undischarged bankrupt ; or
(d)
disqualified under sections 281 and 283 of this Act from being a director of a company.
(2)
A person shall not be disqualified under subsection (1) ( other persons not disqualified under that subsection have subscribed to the memorandum.
(3)
A corporate body in liquidation shall not join in the formation of a company under this Act.
(4)
Subject to the provisions of any enactment regulating the rights and capacity of aliens to undertake or participate in trade or business, an alien or a foreign company may join in forming a company.
Cite as: Companies and Allied Matters Act 2020, section 20

What this section means

From the guide: Who can form a company in Nigeria under CAMA 2020?

  • You cannot join in forming a company if you are under 18, of unsound mind, an undischarged bankrupt or disqualified from being a director (section 20).
  • Section 19 says no association or partnership of more than 20 persons may be formed to carry on business for profit unless it is registered as a company or formed under another enactment in force in Nigeria.
  • Section 20(1) says an individual cannot join in forming a company if he is:
  • A person under 18 is not barred if two other people who are not disqualified have also subscribed to the memorandum (section 20(2)).
  • A corporate body in liquidation cannot join in forming a company (section 20(3)).
  • An alien or a foreign company may join in forming a company, subject to any enactment regulating the rights and capacity of aliens to undertake or take part in trade or business (section 20(4)).

Read the whole subject

Source: Companies and Allied Matters Act 2020 (Act No. 3 of 2020), Official Gazette No. 124, Lagos, 10 August 2020. General information, not legal advice.