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 722. Application of this Part
(1) Except as otherwise provided, Part B of this Act, applies to—
(a) all companies formed and registered under this Act ;
(b) all existing companies ;
(c) all companies incorporated, formed or registered under other enactments ; and
(d) unregistered companies.
(2) This Act does not apply to unions of workers or of employers.
Section 723. Act to override memorandum, articles
(1) Except as otherwise expressly provided in this Act—
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company, or in any agreement executed, by it, or in any resolution passed by the company in general meeting or by its board of directors whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act ; and
(b) any provision contained in the memorandum or articles, agreement or resolution as in paragraph (a) shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.
(2) Any provision of this Act overriding or interpreting a company’s articles shall, except as provided by this Act, apply in relation to articles in force at the commencement of this Act, as well as to articles coming into force thereafter, and shall apply also in relation to a company’s memorandum as it applies in relation to its articles.
Section 724. Application of Act to companies registered under former enactments
In its application to existing companies, this Act shall apply in the same manner—
(a) in the case of a limited company, other than a company limited by guarantee, as if the company had been formed and registered under this Act as a company limited by shares ;
(b) in the case of a company limited by guarantee, as if the company has been formed and registered under this Act as a company limited by guarantee ; and
(c) in the case of a company, other than a limited company, as if the company had been formed and registered under this Act as an unlimited company : Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under the Companies Act, 1912 as the first Nigerian enactment in respect of companies, or as the case may be, any enactment relating to companies thereafter in force in Nigeria before the commencement of this Act.
Section 725. Application of Act to companies registered but not formed
This Act applies to every company registered but not formed under the Companies Act, 1912 referred to in section 724 of this Act or, as the case may be, any enactment relating to companies in force in Nigeria before the commencement of this Act : Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under the enactment in force in Nigeria at the date when it was registered.
Section 726. Application of Act to unlimited companies registered under former enactments
This Act applies to every unlimited company registered as a limited company under section 52 of the Companies and Allied Matters Act, 1990 or of any enactment replaced by that section, as the case may be, in the same manner as it applies to an unlimited company registered under this Act as a limited company : Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered as a limited company under section 52 of the 1990 Act or any enactment replaced by that section, as the case may be.
Section 727. Restricted in this Schedule application of Act to unregistered companies
(1) The provisions of this Act specified in the Second Column of the Thirteenth Schedule to this Act (which respectively related to all bodies corporate, incorporated in and having a principal place of business in Nigeria, other than those mentioned in subsection (2) as if they were companies registered under this Act, but subject to any limitations mentioned in relation to those provisions respectively in the Third Column of that Schedule and to such adaptation and modifications (if any) as may be specified by order made by the Minister and published in the Federal Government Gazette.
(2) The provisions of subsection (1) shall not apply by virtue of this section to any body—
(a) incorporated under any enactment other than this Act ;
(b) not formed for the purpose of carrying on a business which has for its objects the acquisition of gain by the body or by the individual members thereof ; and
(c) for the time being exempted by the direction of the Minister.
(3) This section does not repeal or revoke in whole or in part any enactment or other instrument constituting or regulating any body in relation to which the said provisions are applied by virtue of this section, but in relation to any such body, the operation of any such enactment or instrument shall be suspended in so far as it is inconsistent with any of the said provisions as they apply for the time being to that body.
Section 732. Rules of Court for winding-up of companies
(1) The Chief Judge of the Federal High Court or of any Court designated by an Act of the National Assembly as being vested with the jurisdiction to hear cases arising out of this Act may make rules of court for carrying into effect the objects of this Act so far as they relate to the winding-up of companies or generally in respect of other applications to a court under this Act.
(2) For the purpose of this section, rules made for the purpose of any enactment passed or made on or before, or to have effect on or after, the commencement of this Act shall, on its commencement, ensure and have effect where they are not inconsistent with rules of court made or deemed to have been made, under this section.
Section 733. Certain companies to publish statement in prescribed form
(1) Every banking company, insurance company or a deposit, provident or benefit society shall, before it commences business, and also on the first Monday in February and the first Tuesday in August in every year during which it carries on business, submit to the Commission a statement in the form in the Fourteenth Schedule to this Act or as near thereto as circumstances may admit.
(2) A copy of the statement shall be put up in a conspicuous place in the registered office of the company, and in every branch office or place where the business of the company is carried on.
(3) Every member or creditor of the company is entitled to a copy of the statement, on payment of a sum prescribed in the regulation.
(4) If default, is made in complying with this section, the company and every director and manager of the company is liable to a penalty prescribed in the regulation for everyday during which the default continues.
(5) For the purposes of this Act, a company that carries on the business of insurance in common with any other business or businesses is deemed to be an insurance company.
Section 734. Prosecution of offences
(1) All offences under this Act may be tried by a court of competent jurisdiction in the place where the offence is alleged to have been committed.
(2) Where provision is made in this Act for a criminal sanction to be imposed in case of an act, omission or default without reference to the default being an offence, or without reference to conviction in a court, as the case may be, the—
(a) reference to the act, omission or default shall be construed as referable to an offence ; and
(b) expression “offences” as used in this section shall have effect in relation to any such act, omission or default.
Section 735. Production of documents where offences suspected
(1) If, on application made to a Judge of the Federal High Court in Chambers by the Attorney-General of the Federation, there is shown to be reasonable cause to believe that a person has, while an officer of a company, committed an offence in connection with the management of the company’s affairs and that evidence of the commission of the offence is to be found in any document in the possession or under the control of the company, an order may be made—
(a) authorising any person named in the order to inspect the documents or any of them for the purpose of investigating and obtaining evidence of the offence ; or
(b) requiring the secretary or any other officer of the company as may be named in the order to produce the said documents, to a person and at a place named in the order.
(2) The provisions of subsection (1) shall apply also in relation to any document of a person carrying on the business of banking if they relate to the company’s affairs, as it applies to any document in the possession or under the control of the company, except that no such order as is referred to in subsection (1) (b) shall be made by virtue of this subsection.
(3) In this section, “document” includes an instrument on which information is recorded by means of letters, figures or marks.
Section 736. Costs in actions by certain limited companies
Where a limited company is the plaintiff in an action or other legal proceedings, a judge having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company may be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs and may stay all proceedings until the security is given.
Section 737. Saving for privileged communications
Where proceedings are instituted under this Act against any person by the Attorney-General of the Federation, nothing in this Act shall be taken to require any person who has acted as legal practitioner for the defendant to disclose any privileged communication made to him in that capacity.
Section 738. Power of Court to grant relief in certain cases
(1) If in any proceeding for negligence, default or breach of duty or trust against an officer of a company or a person employed by a company as auditor, it appears to the Court hearing the case that the officer or person is or may be liable but that he has acted honestly and reasonably and that, having regard to all the circumstances of the case, including those connected with his appointment he ought fairly to be excused, the Court may relieve him, either wholly or partly, from liability on such terms as it may deem fit.
(2) When any such officer or person has reasonable apprehension that a claim may be made against him in respect of any negligence, default, breach of duty or trust, he may apply to the Court for relief, and the Court on the application shall have the same power to relieve him as under this section it would have had if it had been a court before which proceedings against that person for negligence, default, breach of duty or breach of trust had been brought.
Section 739. Penalty for improper use of certain words
Where a person trades or carries on business under any name or title of which the last word or words are “Unlimited”, “Limited”, “Public Limited Company” or “Limited by Guarantee” or their abbreviations, he is, unless duly incorporated as an unlimited company, a private company limited by shares, a public company limited by shares, or a company limited by guarantee, respectively, liable to a penalty prescribed in the Regulation for every day during which the name or title is used.
Section 740. Extended effect of penalty for offence of fraudulent trading
The provisions of section 672 (3) of this Act which imposes a penalty for certain offences connected with fraudulent trading discovered on the winding-up of a company shall extend and apply to cases where fraudulent trading is discovered in circumstances other than on the winding-up of a company.
Section 741. Application of fines
A court imposing a fine under this Act may direct that the whole or any part thereof be applied in or towards payment of the costs of the proceedings, or in or towards rewarding the person on whose information or at whose suit the fine is recovered and subject to the direction, all fines under this Act shall, notwithstanding anything in any other enactment, be paid into the Consolidated Revenue Fund.
Section 742. Application by the Commission to the Court for directions
(1) The Commission may apply to the Court for directions in respect of any matter concerning its duties, powers and functions under this Act and, on any such application, the Court may give directions and make further order as it deems fit in the circumstances.
(2) Notwithstanding the provision of subsection (1), the Commission may conduct enquiries with respect to the compliance with the provisions of this Act by any person or company.
Section 743. Alteration and application of Schedules, tables and forms
(1) The Commission may, with the approval of the Minister, by regulation or order, published in the Federal Government Gazette delete from or otherwise alter the whole or any part of any of the Schedules, Tables or Forms prescribed or under this Act.
(2) Until regulations, rules or orders are made under, and for the purpose of this Act prescribing forms for use, the forms in force at the commencement of this Act shall be deemed to have been made under it and shall have effect accordingly.
Section 744. Enforcement of duty of company to make returns to Commission
(1) If a company, having made default in complying with any provision of this Act requiring it to file with, deliver or send to the Commission any return, account or other document, or to give notice to it of any matter, fails to make good the default within 14 days after the service of a notice on the company requiring it to do so, the Court may, on the application of any member or creditor of the company or of the Commission, order the company and any officer to make good the default within the time as may be specified in the order.
(2) Any order under this section may provide that all costs of or incidental to the application shall be borne by the company or by any officer of the company responsible for the default.
(3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a company or its officers in respect of any such default.
Section 745. Power of company to provide for employees on cessation or transfer of business
(1) The powers of a company include if they would not otherwise do so apart from this section power to make for the benefit of persons employed or formerly employed by the company or any of its subsidiaries provision in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the company or subsidiary.
(2) The power conferred under subsection (1) is exercisable even if its exercise is not in the best interest of the company.
(3) The power which a company may exercise under subsection (1) is exercised by the company if sanctioned—
(a) in a case not falling within paragraph (b) or (c), by a resolution of the company ;
(b) if so authorised by the memorandum or articles, a resolution of the directors ; or
(c) if the memorandum or articles require the exercise of the power to be sanctioned by a resolution other than a simple resolution of the company, with the sanction of that other resolution.
(4) Any payment which may be made by a company under this section may, if made before the commencement of any winding-up of the company, be made out of profits of the company which are available for dividend.
What this means
Short answer
The Act overrides anything in a company’s memorandum, articles, agreements or resolutions that is repugnant to it (section 723) and applies to companies registered under earlier laws (sections 722 to 726). An officer or auditor who acted honestly and reasonably can ask the court to excuse him from liability (section 738), and offences are tried where they allegedly happened (section 734).
Who the Act applies to
- Part B applies to companies formed and registered under the Act, existing companies, companies incorporated under other enactments, and unregistered companies. The Act does not apply to unions of workers or employers (section 722).
- Existing companies are treated as if formed under the Act: a limited company as one limited by shares, a company limited by guarantee as such, and others as unlimited. References to the date of registration mean the date under the earlier Companies Act (sections 724 to 726).
- Bodies corporate with a principal place of business in Nigeria are covered by the provisions in the Thirteenth Schedule, except bodies incorporated under another enactment that are not formed for gain, or that the Minister exempts (section 727).
The Act overrides the constitution
Except where the Act says otherwise, its provisions have effect despite anything in a company’s memorandum or articles, an agreement it executed or a resolution of the general meeting or board, whether made before or after commencement. A repugnant provision is void to that extent (section 723).
Courts, rules and evidence
- The Chief Judge of the Federal High Court, or of another court given jurisdiction, can make rules of court for winding up and other applications under the Act (section 732).
- Offences are tried by a competent court where the offence is alleged to have been committed, and a criminal sanction for an act, omission or default is treated as an offence (section 734).
- On the Attorney-General’s application to a Federal High Court judge in chambers, where there is reasonable cause to believe an officer committed an offence and evidence is in company documents, the court can order inspection or production of the documents. This extends to a banker’s documents about the company’s affairs, for inspection only (section 735).
- A court can require security for costs and stay proceedings where a limited company plaintiff may be unable to pay the defendant’s costs (section 736). Legal practitioners need not disclose privileged communications in Attorney-General proceedings (section 737).
Relief for officers and auditors
In proceedings for negligence, default or breach of duty or trust against an officer or auditor, the court can relieve him wholly or partly if he acted honestly and reasonably and ought fairly to be excused. An officer who reasonably fears a claim can apply in advance (section 738). The fraudulent trading penalty in section 672(3) also applies where fraudulent trading is found outside a winding up (section 740).
Banks, insurers and similar bodies
Every banking company, insurance company and deposit, provident or benefit society must submit a statement in the Fourteenth Schedule form to the Commission before it starts business and on the first Monday in February and the first Tuesday in August each year. A copy is displayed at its registered office and branches, and members and creditors can get a copy (section 733).
The Commission’s powers
- The Commission can apply to the court for directions on its duties and powers and conduct enquiries into compliance by any person or company (section 742).
- With the Minister’s approval it can alter the Schedules, tables and forms by regulation or order published in the Gazette (section 743).
- If a company fails to file a required return and does not make good the default within 14 days of notice, a member, creditor or the Commission can ask the court for an order, with costs against the company or the responsible officer (section 744).
- Fines imposed under the Act can be applied to costs or to reward the informant, and otherwise go to the Consolidated Revenue Fund (section 741).
Providing for employees when a business ends
A company can make provision for current and former employees of it or its subsidiaries on cessation or transfer of the whole or part of the undertaking, even if that is not in the company’s best interest. It is sanctioned by a company resolution, or by a directors’ resolution if the memorandum or articles so authorise, and before winding up the payment can come out of profits available for dividend (section 745).
Questions and answers
Does CAMA 2020 override a company’s articles?
Yes. Except where the Act says otherwise, it applies despite the memorandum, articles, agreements or resolutions, and repugnant provisions are void (section 723).
Can the court excuse a director or auditor from liability?
Yes, if he acted honestly and reasonably and ought fairly to be excused. He can also apply in advance if he fears a claim (section 738).
Does CAMA 2020 apply to companies formed under the old law?
Yes. Existing companies are treated as if formed under the Act (sections 722 and 724).
Can a company provide for employees when it closes or sells its business?
Yes, even if it is not in the company’s best interest, by resolution as section 745 requires.
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