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 105. Definition of member
(1) A subscriber of the memorandum of a company shall be deemed to have agreed to become a member of the company, and on its registration shall be entered as the member in its register of members.
(2) Every other person who agrees in writing to become a member of a company, and whose name is entered in its register of members, is a member of the company.
(3) In the case of a company having a share capital, each member is a shareholder of the company and shall hold at least one share, except in relation to a company that has only one shareholder.
Section 106. Capacity to be a member
(1) As from the commencement of this Act, an individual is not capable of becoming a member of a company if he is—
(a) of unsound mind and has been so found by a court in Nigeria or elsewhere ; or
(b) an undischarged bankrupt.
(2) A person under the age of 18 years shall not be counted for the purpose of determining the legal minimum number of members of a company.
(3) A corporate body in liquidation is not capable of becoming a member of a company.
(4) Where, at the commencement of this Act, any person falling within the provisions of subsection (1) is a member of a company by reason of being a shareholder of the company, his share vests in his committee or trustee, as the case may be.
(5) Where, after the commencement of this Act, any shareholder purports to transfer any share or shares to a person falling within the provisions of subsection (1), the purported transfer shall not vest the title in the shares in that person, but the title remains in the purported transferor or his personal representative who holds the shares in trust for that person during the period of his incapacity.
Section 107. Right of member to attend meetings and vote
Every member shall, notwithstanding any provision in the articles, have a right to attend any general meeting of the company and to speak and vote on any resolution before the meeting : Provided that the articles may provide that a member shall not be entitled to attend and vote unless all calls or other sums payable by him in respect of shares in the company have been paid.
Section 108. Impersonation of member
If a person falsely and deceitfully impersonates any member of a company and thereby obtains or endeavours to obtain any benefit due to any such member, he commits an offence and is liable on conviction to—
(a) imprisonment for a term of not more than seven years or a fine as the court deems fit ;
(b) pay such additional fines as the Commission may specify by regulation ; and
(c) account to the aggrieved member for any benefit which he directly or indirectly derived as a result of his act of impersonation.
Section 109. Register of members
(1) Every company shall keep a register of its members and enter in the register the—
(a) names and addresses of the members, and in the case of a company having a share capital, a statement of the shares and class of shares, if any, held by each member, distinguishing each share by its number so long as the share has a number, and of the amount paid or agreed to be considered as paid on the shares of each member ;
(b) date on which each person was registered as a member ; and
(c) date on which any person ceased to be a member.
(2) The entry required under subsection (1) (a) or (b) shall be made within 28 days of the conclusion of the agreement with the company to become a member or, in the case of a subscriber of the memorandum, within 28 days of the registration of the company.
(3) The entry required under subsection (1) (c), shall be made within 28 days of the date on which the person concerned ceased to be a member, or if he ceased to be a member other than as a result of action by the company, within 28 days of producing to the company evidence satisfactory to the company of the occurrence of the event whereby he ceased to be a member.
(4) Where a company defaults in complying with the provisions of this section, the company and each officer of the company is liable to—
(a) such penalties as the Commission shall specify by regulation ; and
(b) an additional daily default fine that the Commission shall specify by regulation.
(5) Liability incurred by a company from the making or deletion of an entry in its register of members, or from a failure to make or delete any entry, is not enforceable after the expiration of 20 years from the date on which the entry was made or deleted or, in the case of any such failure, from the date on which the failure first occurred.
Section 110. Location of register
(1) The register of members shall be kept at the registered office of the company, except if the—
(a) work of making it up is done at another office of the company, it may be kept at that other office ; or
(b) company arranges with some other person for the making up of the register to be undertaken on behalf of the company by that person, it may be kept at the office of that other person at which the work is done, but the register shall not be kept in the case of a company registered in Nigeria at a place outside Nigeria.
(2) Every company shall send notice to the Commission of the change in location of the register, and a company is not bound to send notice under this subsection where the register has at all times since it came into existence or, in the case of a register in existence at the commencement of this Act, at all times since then, been kept at the registered office of the company.
(3) Where a company fails to comply with the provisions of subsection (2) within 28 days of the change of the location of the register, the company and every one of its officers are liable to—
(a) such penalties as the Commission shall specify by regulation ; and
(b) an additional daily default fine that the Commission shall specify by regulation.
Section 111. Index of members to be kept
(1) Every company having more than 50 members shall, unless the register of members is in such a form as to constitute in itself an index, keep an index of the names of the members of the company.
(2) Where a company makes any alteration in the register of members, the company shall, within 14 days after the date which the alteration is made, make such necessary alterations in the index.
(3) The index shall, in respect of each member, contain sufficient indication to enable the account of that member in the register to be readily found.
(4) The index shall, at all times, be kept at the same place as the register of members.
(5) If default is made in complying with the provisions of this section, the company and every officer of the company are liable to such penalties as the Commission shall specify by regulation.
Section 112. Inspection of register and index
(1) Except when the register of members is closed under the provisions of this Act, the register and the index of members’ names shall be open during business hours (subject to such reasonable restrictions as the company in general meeting may impose, that not less than two hours in each day shall be allowed for inspection) to the inspection of any member of the company without charge.
(2) A member or any person may, with the permission of the company which permission shall not be unreasonably withheld require a copy of the register, or of any part, on payment of such amount the Commission may prescribe or such lesser amount the company may prescribe for every page required to be copied, and the company shall cause any copy required by any person to be duly endorsed by an officer of the company and sent to that person within a period of 10 days commencing on the day after the day on which the requirement is received by the company : Provided that the Commission may require such copy without any restriction or charge.
(3) If any inspection required under this section is refused, or if any copy required under this section is not sent within the prescribed period, the company and every officer of the company is liable in respect of each default to such penalties as the Commission shall specify by regulation.
(4) Notwithstanding the provisions of subsection (3), the Court may by order compel an immediate inspection of the register and index or direct that the copies required shall be sent to the persons requiring them.
Section 113. Consequences of agents’ default to keep register
Where, by virtue of section 110 (1) (b), the register of members is kept at the office of some person other than the company, and by reason of any default of that person, the company fails to comply with subsections 112 (1) or (2), or with any requirements of this Act as to the production of the register, that other person is liable to the same penalties as if the person were an officer of the company who was in default, and the power of the Court under section 112 (4) shall extend to the making of orders against that other person and his officers and servants.
Section 114. Power to close register
A company may, on giving notice by advertisement in a daily newspaper circulating in the district in which the registered office of the company is situated, close the register of members or any part of it for any time or times not exceeding, on the whole, 30 days in each year.
Section 115. Power of Court to rectify register
(1) If—
(a) the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company, or
(b) default is made or unnecessary delay takes place in entry on the register the fact of any person having ceased to be a member, the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.
(2) The Court may refuse the application, or order rectification of the register and payment by the company of any damage sustained by the party aggrieved.
(3) On an application under this section, the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members and alleged members on one hand and the company on the other hand, and generally may decide any question necessary or expedient be decided for rectification of the register.
(4) Where the court makes an order for rectification of the register, the company shall, within 14 days of the court order, file a copy of the order and a notice of the particulars of the rectification with the Commission.
Section 116. Register to be evidence
The register of members shall be prima facie evidence of matters which are by this Act directed or authorised to be inserted in the register.
Section 117. Liability of members
(1) Prior to the winding-up of a company, a member of a company with shares is liable to contribute the balance, if any, of the amount payable in respect of the shares held by him in accordance with the terms of the agreement under which the shares were issued or in accordance with a call validly made by the company pursuant to its articles.
(2) Where any contribution has become due and payable by reason of a call, validly made by the company, pursuant to the articles or where, under the terms of any agreement with the company, a member has undertaken personal liability to make future payments in respect of shares issued to him, the liability of the member shall continue notwithstanding that the shares held by him are subsequently transferred or forfeited under a provision to that effect in the articles, but his liability ceases if and when the company have received payment in full of all such money in respect of the shares.
(3) Subject to subsections (1) and (2), no member or past member shall be liable to contribute to the assets of the company, except in the event of its being wound up.
(4) In the event of a company being wound up, every present or past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and for the costs, charges and expenses of the winding-up and the adjustment of the rights of the members and past members among themselves, but subject to the following qualifications—
(a) a past member is not liable to contribute if he has ceased to be a member for a period of one year or upwards before the commencement of the winding-up ;
(b) a past member is not liable to contribute unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this section ;
(c) in the case of a company limited by shares, no contribution is required from any member or past member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a present or past member ;
(d) in the case of a company limited by guarantee, no contribution is required from any member or past member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up ; and
(e) any sum due from the company to a member or past member, in his capacity as member, by way of dividends or otherwise shall not be set- off against the amount for which he is liable to contribute in accordance with this section but any such sum is to be taken into account for the purposes of final adjustment of the rights of the members and past members amongst themselves.
(5) For the purposes of this section, the expression “past member” includes the estate of a deceased member and where any person dies after becoming liable as a member or past member, such liability shall be enforceable against his estate.
(6) Except as contained in this section, a member or past member is not liable as a member or past member for any of the debts and liabilities of the company.
Section 118. Liability for company debts where membership is below legal minimum
If a public company or a company limited by guarantee carries on business or its objects, without having at least two members and does so for more than six months, every director or officer of the company, during the time that it so carries on business with only one or no member, is liable jointly and severally with the company for the debts of the company contracted during that period.
What this means
Short answer
A member is a subscriber to the memorandum or anyone who agrees in writing to become a member and is entered in the register of members (section 105). Every company must keep that register (section 109), and members can inspect it free during business hours (section 112). Before a winding up, a member is liable only for the unpaid balance on his shares (section 117).
Who is a member
A subscriber is deemed to have agreed to become a member and is entered in the register on registration. Anyone else who agrees in writing and is entered in the register is a member too. In a company with share capital each member is a shareholder and holds at least one share, except where there is only one shareholder (section 105).
Who cannot be a member
- An individual of unsound mind found so by a court in Nigeria or elsewhere, or an undischarged bankrupt (section 106(1)). A purported transfer of shares to such a person does not vest title in him. The transferor or his personal representative holds the shares in trust during the incapacity (section 106(5)).
- A corporate body in liquidation (section 106(3)).
- A person under 18 is not counted towards the legal minimum number of members (section 106(2)).
Rights at meetings
Every member can attend any general meeting and speak and vote on any resolution, despite anything in the articles. The articles can withhold that right only until calls and other sums due on his shares have been paid (section 107). Impersonating a member to obtain a benefit is an offence punishable by up to seven years’ imprisonment or a fine, plus any additional fines the Commission sets, and the offender must account for any benefit gained (section 108).
The register of members
- Contents. Names and addresses, the shares and class held with their numbers and the amount paid or treated as paid, the date each person became a member and the date any person ceased (section 109(1)).
- Timing. Entries about joining are made within 28 days of the agreement to become a member (within 28 days of the company’s registration for a subscriber), and entries about leaving within 28 days (section 109(2) and (3)).
- Location. At the registered office, or at another office where it is made up, or at the office of an outside person who makes it up, but never outside Nigeria. A change of location must be notified to the Commission within 28 days, unless it has always been at the registered office (section 110).
- Index. A company with more than 50 members needs an index of members’ names, kept at the same place and updated within 14 days of any alteration, unless the register is already in index form (section 111).
- Evidence. The register is prima facie evidence of what it records (section 116).
Inspection and copies
Members can inspect the register and index free of charge during business hours, and the company must allow at least two hours each day. Anyone, with the company’s permission (not to be unreasonably withheld), can ask for a copy for a prescribed charge, and the company must send it endorsed by an officer within 10 days. The court can order immediate inspection (section 112). A company can close the register for up to 30 days in total each year after advertising in a daily newspaper circulating where its registered office is (section 114).
Correcting the register
If a name is entered or omitted without sufficient cause, or there is delay in recording that someone has ceased to be a member, the person aggrieved, any member or the company can apply to the court for rectification and damages. The court can decide any question of title. The company files the order and a notice of rectification with the Commission within 14 days (section 115).
Members’ liability
- Before winding up, a member of a company with shares must pay the unpaid balance on his shares under the terms of issue or a valid call (section 117(1)).
- In a winding up, present and past members must contribute enough to pay the company’s debts and the costs of winding up, with limits. A past member who left a year or more before winding up does not contribute, and only contributes if the existing members cannot pay. A limited-by-shares member never pays more than the unpaid amount on his shares, and a guarantee member never more than the amount he guaranteed (section 117(4)).
If membership falls below two
If a public company or a company limited by guarantee carries on business for more than six months with fewer than two members, every director or officer during that time is jointly and severally liable with the company for debts contracted in that period (section 118).
Questions and answers
Who can be a member of a company?
A subscriber to the memorandum, or anyone who agrees in writing and is entered in the register. Persons of unsound mind found so by a court, undischarged bankrupts and companies in liquidation cannot be members (sections 105 and 106).
How quickly must the register of members be updated?
Within 28 days of the agreement to become a member, or of a person ceasing to be one (section 109(2) and (3)).
Can members inspect the register?
Yes, free of charge during business hours, for at least two hours each day (section 112(1)).
When must a company keep an index of members?
When it has more than 50 members, unless the register already works as an index (section 111).
What if a public company has only one member?
If it carries on business for more than six months with fewer than two members, directors and officers are jointly and severally liable for debts contracted in that period (section 118).
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