Registering company charges under CAMA 2020: the 90-day rule and registers

Every company shall cause a copy of every instrument creating any charge requiring registration under this Part to be kept at the registered office of the company, but, in the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.

Open section 215 on its own page

(1) Every company shall keep, at the registered office of the company, a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge, and, except in the case of securities to bearer, the names of the persons entitled thereto.

(2) If any officer of the company knowingly and willfully authorises or permits the omission of any entry required to be made under this subsection, he is liable to such fines as the Commission shall specify in the regulation.

Open section 216 on its own page

(1) The copies of instruments creating any charge requiring registration under this Part with the Commission and the register of charges kept under section 216 of this Act, shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that at least two hours in each day shall be allowed for inspection) to inspection by any creditor or member of the company without fee and the register of charges shall also be open to inspection by any other person on payment of such fee as the Commission shall determine or such less sum as may be prescribed by the company for each inspection, as the company may prescribe : Provided that the Commission may request for and obtain such copy without any restriction or charge.

(2) If inspection of copies of instruments creating charges or of the register is refused, each officer of the company who is in default is liable to such fines as the Commission shall specify in the regulation for every day during which the refusal continues.

(3) If any such refusal occurs, the Court may by order compel an immediate inspection of the copies of instruments or register.

Open section 217 on its own page

(1) A company which issues or has issued debentures shall maintain a register of the holders.

(2) The register shall contain the—

(a) names and addresses of the debenture holders ;

(b) principal of the debentures held by each of them ;

(c) amount or the highest amount of any premium payable on redemption of the debentures ;

(d) issue price of the debenture and the amount paid up on the issue price ;

(e) date on which the name of each person was entered on the register as a debenture holder ; and (f ) date on which each person ceased to be a debenture holder.

(3) The entry required under this section shall be made within 30 days of the conclusion of the agreement with the company to become a debenture holder or within 30 days of the date at which he ceases to be one.

Open section 218 on its own page

(1) Every register of holders of debentures of a company shall, except when duly closed (but subject to such reasonable restrictions as the company may in general meeting impose, so that at least two hours in each day shall be allowed for inspection), be open to the inspection of the registered holder of such debentures or any holder of shares in the company without fee, and of any other person on payment of such fee as the Commission shall determine or such less sum as may be prescribed by the company : Provided that the Commission may at any time during working hours request for and obtain such copy without any restriction or charge.

(2) Any such registered holder of debentures or any other person may require a copy of the register of the holders of debentures of the company or any part thereof on payment of such fee as the Commission shall determine or such less sum as may be prescribed by the company.

(3) A copy of any trust deed for securing any issue of debentures shall be duly endorsed by an officer of the company and forwarded to every holder of such debentures at his request on payment in the case of a printed trust deed, of the sum of such fee as the Commission shall determine or such less sum as may be prescribed by the company, or, where the trust deed has not been printed, on payment of such fee as the Commission shall determine or such less sum as may be prescribed by the company for every page required to be copied.

(4) If inspection is refused, or a copy is refused or not forwarded, the company and every officer of the company who is in default is liable to such fine as the Commission shall specify in the regulation for every day during which the default continues.

(5) Where a company is in default, a Court may by order compel an immediate inspection of the register or direct that the copies required shall be sent to the person requiring them.

(6) For the purposes of this section, a register is deemed to be duly closed in accordance with provisions contained in the articles or in the debentures or, in the case of debenture stock, in the stock certificates, or in the trust deed or other document securing the debentures or debenture stock, during such periods, not exceeding in the whole 30 days in any year, as may be therein specified.

Open section 219 on its own page

On the application of the transferor of any debenture in a company, the company shall enter in its register of debenture holders the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.

Open section 220 on its own page

(1) If a company refuses to register a transfer of any debenture, the company shall, within two months after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal.

(2) If any default is made in complying with the provisions of this section, the company and each officer of the company are liable to such fine as the Commission shall specify by regulation.

Open section 221 on its own page

(1) Subject to the provisions of this Part, every charge created by a company, being a charge to which this section applies, shall, so far as any security on the company’s property or undertaking is conferred, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge (including any provisions in a floating charge that prohibits or restricts the company from granting any further charge ranking in priority to or pari passu with the floating charge) together with the instrument, if any, by which the charge is created or evidenced, have been or are delivered to or received by the Commission for registration in the manner required by this Act or by any enactment repealed by this Act within 90 days after the date of its creation, but 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 thereby secured shall immediately become payable and registration under this section shall give rise to constructive notice of the matters stated in the particulars of charge.

(2) The provisions of this section apply to a —

(a) charge for the purpose of securing any issue of debentures ;

(b) charge on uncalled share capital of the company ;

(c) charge created or evidenced by an instrument which if executed by an individual would require registration as a bill of sale ;

(d) charge on land, wherever situate, or any interest therein, but not including a charge for rent or other periodical sum issuing out of land ;

(e) charge on book debts of the company ; (f ) floating charge on the undertaking or property of the company ;

(g) charge on calls made but not paid ;

(h) charge on a ship or aircraft or any share in a ship ; and

(i) charge on goodwill, or on any intellectual property.

(3) Where a charge affects or relates to property situate in Nigeria and in addition to registration under subsection (1), registration elsewhere in Nigeria is necessary to make the charge valid or effectual, it shall, subject to this subsection, be sufficient evidence of compliance with the requirements of subsection (1), if, instead of delivery of the original instrument creating or evidencing the charge, there is delivered to and received by the Commission within the prescribed period of 90 days, or such extended time as the Court may allow, a true copy of it duly certified as such by the secretary to the company.

(4) A reference in any enactment to the date of execution of an instrument for the purposes of computation of time within which registration is to be effected with or without penalty, shall be construed as a reference to the date of presentation of a copy of the instrument to the Commission under this Act, and time shall be computed accordingly, and if a certified copy is delivered to the Commission under this subsection, the original of it shall be produced to the Commission for inspection and comparison, if the Commission so requires.

(5) In the case of a charge created out of Nigeria, affecting or in relation to property situate outside Nigeria, the delivery to and the receipt by the Commission of a copy verified in the prescribed manner of the instrument by which the charge is created or evidenced, shall have the same effect for the purposes of this section as the delivery and receipt of the instrument itself, and 90 days after the date on which the instrument or copy could, in due course of post, and if dispatched with diligence, have been received in Nigeria shall be substituted for 90 days after the date of the creation of the charge as the time within which the particulars and instrument or copy are to be delivered to the Commission.

(6) Where a charge is created in Nigeria but affects or relates to property outside Nigeria, the instrument creating or purporting to create the charge may be sent for registration under this section, notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situate.

(7) Where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company shall not, under this section, be treated as a charge on those book debts.

(8) The holding of debentures entitling the holder to a charge on land is not, for the purposes of this section, deemed to be an interest in land.

(9) Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it is, for the purposes of this section, sufficient if there are delivered to or received by the Commission within 90 days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debenture of the series, the following particulars—

(a) the total amount secured by the whole series ;

(b) the dates of the resolutions authorising the issues of the series and the date of the covering deed, if any, by which the security is created or defined ;

(c) a general description of the property charged ; and

(d) the names of the trustees, if any, for the debenture holders, together with the deed containing the charge, or, if there is no such deed, one of the debentures of the series : Provided that, where more than one issue is made of debentures in the series, there shall be sent to the Commission, for entry in the register, particulars of the date and amount of each issue, but an omission to do this does not affect the validity of the debentures issued.

(10) Where any commission, allowance or discount has been paid or made either directly or indirectly by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debenture of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for such debentures, the particulars required to be sent for registration under this section shall include particulars as to the amount or rate percent of commission, discount or allowance paid or made, but an omission to do this does not affect the validity of the debentures issued.

(11) The deposit of any debenture as security for any debt of the company shall not, for the purposes of subsection (10), be treated as the issue of the debentures at a discount.

(12) The total fees payable to the Commission in connection with the filing, registration or release of a charge with the Commission under this Part shall not exceed 0.35% of the value of the charge or such other amount as the Minister may specify in the Federal Government Gazette.

(13) In this Part— “charge” includes mortgage ; “book debt”, for the purposes of subsection (2) (e), means a debt due or to become due to the company at some future date on account of or in connection with a profession, trade or business carried on by the company, whether entered in a book or not, and includes a reference to a charge on a future debt of the same nature although not incurred or owing at the time of the creation of the charge, but does not include a reference to a charge on a marketable security or on a negotiable instrument ; “intellectual property”, for the purposes of this section, means any patent or a licence under a patent, any registered design or design right or a licence, any trademark or licence under a trademark, or any copyright or a licence under a copyright ; “security financial collateral arrangement” means an agreement or arrangement, evidenced in writing, where :

(a) the purpose of the agreement or arrangement is to secure the relevant financial obligations owed to the collateral-taker ;

(b) the collateral-provider creates or there arises a security interest in financial collateral to secure those obligations ;

(c) the financial collateral is delivered, transferred, held, registered or otherwise designated so as to be in the possession or under the control of the collateral-taker or a person acting on its behalf; any right of the collateral-provider to substitute equivalent financial collateral or withdraw excess financial collateral shall not prevent the financial collateral being in the possession or under the control of the collateral-taker ; and

(d) the collateral-provider and the collateral-taker are both non-natural persons.

(14) This section does not apply in relation to a security financial collateral arrangement or any charge created or otherwise arising under a security financial collateral arrangement.

Open section 222 on its own page

(1) The Commission shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Part and shall, on payment of such fee as may be specified by regulations made by the Commission, enter in the register with respect to such charges in the case of—

(a) a charge to the benefit of which the holders of a series of debentures are entitled, such particulars as are specified in section 222 (9) ; and

(b) any other charge—

(i) if the charge is a charge created by the company, the date of its creation, and if the charge was a charge existing on property acquired by the company, the date of its creation and the date of the acquisition of the property,

(ii) the amount secured by the charge,

(iii) short particulars of the property,

(iv) the persons entitled to the charge, and

(v) or a floating charge, a notice indicating the existence of any provisions in the charge that prohibit or restrict the company from granting any further charge ranking in priority to or pari passu the floating charge.

(2) Where a charge is registered under this Part, the Commission shall issue a registration certificate setting out the parties to the charge, the amount thereby secured, with such other particulars as the Commission may consider necessary, and the certificate is prima facie evidence of due compliance with the requirements as to registration under this Part.

(3) The register kept in pursuance of this section shall be open to inspection by any person on payment of such fees as may be prescribed by the Commission.

Open section 223 on its own page

(1) It is the duty of a company to send to the Commission for registration, the particulars of every charge created by the company and of the issues of debentures of a series requiring registration under section 222, but registration of any such charge may be effected on the application of any person interested therein.

(2) Where registration is effected on the application of a person other than the company, that person is entitled to recover from the company the amount of any fees properly paid by him to the Commission on the registration.

(3) If any company defaults in sending to the Commission for registration, the particulars of any charge created by the company or of the issues of debentures of a series requiring registration, unless the registration has been effected on the application of some other person, the company and each officer of the company who is in default commits an offence and are liable to such penalty as may be prescribed by the Commission.

Open section 224 on its own page

(1) Where a company acquires any property which is subject to a charge of any such kind as would, if it has been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the Commission for registration in the manner required by this Act within 90 days after the date on which acquisition is completed : Provided that, if the property is situate and the charge was created outside Nigeria, 90 days after the date on which the copy of the instrument could in due course of post, and if despatched with due diligence, have been received in Nigeria shall be substituted for 90 days after the completion of the acquisition, as the time within which the particulars and the copy of the instrument are to be delivered to the Commission.

(2) If default is made in complying with this section, the company and each officer of the company are liable to such penalty as may be prescribed by the Commission for every day during which the default continues.

(3) It is sufficient compliance with this section in any case affecting land registered under any enactment in a State, where the charge is registered before the land is acquired by the company, if a true copy of the charge duly certified by the Registrar of Land is delivered to the Commission within the time prescribed by this section.

Open section 225 on its own page

(1) Where, at the date of commencement of this Act, a company has property on which there is a charge, particulars of which would require registration if it had been created by the company after the date of such commencement, then, unless the charge has been discharged or the property has ceased to be held by the company prior to the expiration of six months from the date of such commencement, the company shall, within that time, cause particulars of the charge as prescribed by section 222 to be delivered to the Commission for registration together with the document, if any, by which the charge was created or a copy thereof, certified as required by that section.

(2) Failure to comply with the provisions of this section does not affect the validity of the charge.

Open section 226 on its own page

Where a charge, particulars of which require registration under section 222, is expressed to secure all sums due or to become due or some other uncertain or fluctuating amount, the particulars required under section 222 (9) shall state the maximum sum deemed to be secured by such charge (being the maximum sum covered by the stamp duty paid thereon) and such charge is void, so far as any security on the company’s property is thereby conferred, as respects any excess over the stated maximum : Provided that, if additional stamp duty is subsequently paid on such charge; and at any time thereafter prior to the commencement of the winding-up of the company, amended particulars of the said charge stating the increased maximum sum deemed to be secured thereby (together with the original instrument by which the charge was created or evidenced) are delivered to the Commission for registration, then, as from the date of such delivery, the charge, if valid, is effective to the extent of such increased maximum sum except as regards any person who, prior to the date of such delivery, has acquired any proprietary rights in, or a fixed or floating charge on, the property subject to the charge.

Open section 227 on its own page

(1) The company shall cause a copy of every certificate of registration given under section 223 to be endorsed on every debenture or certificate of debenture stock which is issued by the company and the payment of which is secured by the charge so registered : Provided that nothing in this subsection shall be construed as requiring a company to cause a certificate of registration of any charge given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created.

(2) If any person authorises or permits the delivery of any debenture or certificate of debenture stock which under the provisions of this section is required to have endorsed on it a copy of a certificate of registration without the copy being so endorsed upon it, he is, without prejudice to any other liability, liable to such penalty as may be prescribed by the Commission.

Open section 228 on its own page

If the Commission is satisfied with respect to any registered charge that—

(a) the debt for which the charge was given has been paid or satisfied in whole or in part ; or

(b) part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking, the company may, enter on the register a memorandum of satisfaction to the extent necessary to give effect thereto and, where it enters a memorandum of satisfaction it shall, if required, furnish the company with a copy of the entry, and any such entry shall have effect, subject to the requirement of any other enactment as to registration.

Open section 229 on its own page

The court, on being satisfied that—

(a) the omission to register a charge within the time required by this Act or that the omission or misstatement of any particular with respect to any such charge or in a memorandum of satisfaction was—

(i) accidental, or due to inadvertence or to some other sufficient cause, or

(ii) is not of a nature to prejudice the position of creditors or shareholders of the company ; or

(b) that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seems to the court just and expedient, order that the time for registration is extended or, as the case may be, that the omission or misstatement shall be rectified.

Open section 230 on its own page

(1) If any person obtains an order for the appointment of a receiver or manager of the property of a company, or appoints such a receiver or manager under any power contained in any instrument, he shall, within seven days from the date of the order or the appointment under the said powers, give notice of the fact to the Commission and the Commission shall, on payment of such fee as may be specified by regulations, enter the fact in the register of charges.

(2) Where a person appointed receiver or manager of the property of a company under the powers contained in any instrument, ceases to act as such receiver or manager, he shall, on so ceasing, give the Commission notice to that effect, and the Commission shall enter the notice in the register of charges.

(3) If any person makes default in complying with the requirements of this section, he is liable to such penalty as the Commission shall specify by regulation.

Open section 231 on its own page