The sections, word for word
Every section on this subject, exactly as printed in the Official Gazette (Act No. 3 of 2020). The explanation follows beneath.
Section 95. Form of contract
(1) Contracts on behalf of a company may be made, varied or discharged as follows—
(a) any contract which if made between individuals would be by law required to be by deed, or which would be varied, or discharged only by deed may be made, varied or discharged, as the case may be, in writing as a deed in the name or on behalf of the company ;
(b) any contract which if made between individuals would be by law required to be in writing, signed by the parties to be charged therewith, or which could be varied or discharged only by writing or written evidence signed by the parties to be charged, may be made, varied or discharged, as the case may be, in writing signed in the name or on behalf of the company ; and
(c) any contract which if made between individuals would be valid although made orally only and not reduced into writing or which could be varied or discharged orally, may be made, varied or discharged, as the case may be, orally on behalf of the company.
(2) A contract made according to this section shall be effectual in law, and shall bind the company and its successors and all other parties thereto, their heirs, executors, or administrators, as the case may be; and may be varied or discharged in the same manner in which it is authorised by this section to be made.
Section 96. Pre-incorporation contracts
(1) Any contract or other transaction purporting to be entered into by the company or by any person on behalf of the company prior to its formation may be ratified by the company after its formation and thereupon the company shall become bound by and entitled to the benefit thereof as if it has been in existence at the date of such contract or other transaction and had been a party thereto.
(2) Prior to ratification by the company, the person who purported to act in the name or on behalf of the company shall, in the absence of express agreement to the contrary, be personally bound by the contract or other transaction and entitled to the benefit thereof.
Section 97. Bills of exchange and promissory note
(1) A bill of exchange or promissory note is deemed to have been made, accepted, or endorsed on behalf of a company if made, or expressed to be made, accepted, or endorsed in the name of the company, or if expressed to be made, accepted or endorsed on behalf or on account of the company by a person acting under its authority.
(2) The company and its successors shall be bound thereby if the company is, in accordance with sections 89-91, liable for the acts of those who made, accepted or endorsed it in its name or on its behalf or account, and a signature by a director or the secretary on behalf of the company shall not be deemed to be a signature by procuration for the purposes of section 25 of the Bills of Exchange Act.
Section 98. Common seal of the company
A company may have a common seal but need not have one, and where a company has a common seal, the design and use of that seal shall be regulated by the company’s articles and it shall have its name engraved in legible characters on the seal.
Section 99. Official seal for use abroad
(1) A company whose objects require or comprise the transaction of business in foreign countries may, if authorised by its articles, have for use in any territory, district, or place outside Nigeria, an official seal, the design and use which shall be regulated by the company’s articles, and shall indicate on its face of the name of every territory, district, or place where it is to be used.
(2) A company having such an official seal may, by deed, authorise any person appointed for the purpose in any territory, district, or place outside Nigeria, to affix the same to any deed or other document to which the company is party in that territory, district, or place.
(3) The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent’s authority has been given to the person dealing with him.
(4) The person affixing any such official seal shall, by writing under his hand, on the deed or other document to which the seal is affixed, certify the date on which and place at which it is affixed.
(5) In the case of companies that have a common seal, a deed or other document to which an official seal is duly affixed shall bind the company as if it has been sealed with the common seal of the company.
Section 100. Power of attorney
(1) A company may, by deed, empower any person, either generally or in respect of any specified matter, as its attorney, to execute deeds on its behalf in any place within or outside Nigeria.
(2) A deed signed by a person empowered as provided in subsection (1) shall bind the company and have the same effect as it would have if it were a deed signed by the company.
Section 101. Authentication of documents
A document or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorised officer of the company, and need not be signed as a deed unless otherwise so required in this Part and that an electronic signature is deemed to satisfy the requirement for signing under this section.
Section 102. Execution of deeds by company
(1) A document is validly executed by a company as a deed for the purposes of this Act, if it is duly executed by the company and it is delivered as a deed.
(2) A company may execute a document described or expressed as a deed without affixing a common seal on the document by signature on behalf of the company by —
(a) a director of the company and the secretary of the company ;
(b) at least two directors of the company ; or
(c) a director of the company in the presence of at least one witness who shall attest the signature.
(3) A document mentioned in subsection (2) that is signed on behalf of the company in accordance with that subsection has the same effect as if the document was executed under the common seal of the company.
(4) Where a document is to be signed by a person on behalf of more than one company, the document shall not be considered to be signed by that person for the purposes of subsection (2) or (3), unless the person signs the document separately in each capacity.
(5) This section applies in the case of a document mentioned in subsection (2) that is executed by the company in the name or on behalf of another person, whether or not that person is also a company.
Section 103. Alternative to sealing
Where any written law or rule of law requires any document to be under or executed under the common seal of a company, or provides for consequences for not sealing, the document is deemed to have satisfied the provisions of that written law or rule of law if the document is signed in the manner set out in sections 101 and 102.
Section 104. Service of documents on companies
A court process shall be served on a company in the manner provided by the rules of court and any other document may be served on a company by leaving it at, or sending it by post to, the registered office or head office of the company.
What this means
Short answer
A company can make, vary or discharge contracts in the same form an individual could: by deed if a deed is required, in writing if writing is required, or orally if that would be valid (section 95). It can execute a deed without a seal if signed by a director and the secretary, two directors, or a director in front of a witness (section 102).
Form of contract
Section 95 lets a company make, vary or discharge a contract as follows. A contract that individuals would have to make by deed can be made as a deed in the company’s name. One that must be in signed writing can be made in writing signed in the company’s name or on its behalf. One that would be valid orally can be made orally. A contract made this way is effective in law and binds the company, its successors and the other parties.
Contracts made before incorporation
A contract or transaction purportedly made by or for the company before it was formed can be ratified by the company after formation. It is then bound by it and entitled to its benefit as if it had been in existence and a party at the time (section 96(1)). Until ratified, the person who acted for the company is, unless there is an express agreement otherwise, personally bound by the contract and entitled to its benefit (section 96(2)).
Bills of exchange and promissory notes
A bill or note is treated as made, accepted or endorsed for a company if it is in the company’s name, or expressed to be on its behalf or account by someone acting under its authority. A director’s or secretary’s signature for the company is not a signature by procuration (section 97).
Seals
- A company may have a common seal but need not. If it has one, the articles regulate its design and use and its name must be engraved on it in legible characters (section 98).
- A company whose objects involve business abroad can, if its articles allow, have an official seal for use outside Nigeria, which names each place where it will be used. It can authorise an agent there by deed to affix it, and he must certify on the document the date and place (section 99).
- A company can appoint an attorney by deed to execute deeds for it in or outside Nigeria, and a deed signed by that attorney binds the company (section 100).
Signing and executing documents
A document that needs authentication by the company can be signed by a director, the secretary or another authorised officer, and an electronic signature satisfies the requirement (section 101). A company validly executes a deed if it is duly executed and delivered as a deed. It can do so without a common seal by signature of (section 102):
- a director and the secretary;
- at least two directors; or
- a director in the presence of at least one witness who attests the signature.
A deed signed in one of these ways has the same effect as one under the common seal, and where a law requires a document to be under seal, signing under sections 101 and 102 satisfies it (section 103). A person signing for more than one company must sign separately in each capacity (section 102(4)).
Serving documents on a company
A court process is served as the rules of court provide. Any other document can be left at, or posted to, the company’s registered office or head office (section 104).
Questions and answers
Does a company need a common seal?
No. A company may have one but need not (section 98).
Who can sign a deed for a company?
A director and the secretary, at least two directors, or a director in the presence of at least one witness who attests the signature (section 102(2)).
What happens to a contract made before the company was formed?
The company can ratify it after formation and then becomes bound. Until then, the person who acted is personally bound unless otherwise agreed (section 96).
How are documents served on a company?
Court process as the rules of court provide. Other documents by leaving them at, or posting them to, the registered office or head office (section 104).
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