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 686. Meetings to ascertain wishes of creditors and others
(1) The Court may, as to all matters relating to the winding-up of a company, have regard to the wishes of the creditors or contributories of the company, as proved to it by any sufficient evidence, and may, if it deems fit, for the purposes of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held and conducted in such manner as the Court directs and may appoint a person to act as chairman of any such meeting and to report the result to the Court.
(2) In the case of creditors, regard shall be had to the value of each creditor’s debt.
(3) In the case of contributories, regard shall be had to the number of votes conferred on each contributory by this Act or the articles.
Section 687. Judicial notice of signatures of officers of Court
In all proceedings under this Part of this Act, all Courts, Judges, and persons judicially acting, and all officers, judicial or ministerial, of any Court or employed in enforcing the process of any Court, shall take judicial notice of the signature of any officer of Court and also of the official seal or stamp of a Court appended to or impressed on any document made, issued or signed under this Part of this Act, or on any official copy of any such document.
Section 688. Judicial notice of signatures of certain government officials
(1) Documents purporting to be orders or certificates made or issued by the Attorney-General of the Federation or the Commission for the purposes of this Act and to be signed by the Attorney-General of the Federation or the Accountant-General of the Federation, or under the seal of the Commission or signed by any person authorised in that behalf by them, and, in proper case, to be sealed where necessary, shall be received in evidence and deemed to be such orders, or certificates without further proof, unless the contrary is shown.
(2) A certificate signed by the Attorney-General for the Federation, Accountant-General of the Federation or under the seal of the Commission that any order made, certificate issued, or act done, is the order, certificate or act of the Attorney-General of the Federation, Accountant-General of the Federation or the Commission, as the case may be, shall be conclusive of the fact so certified.
Section 689. Special commissioners for receiving evidence
(1) Where a company is in course of being wound up, all magistrates shall be commissioners for the purpose of taking evidence under this Act and the Court may refer the whole or any part of the examination of any witnesses under this Act to any person appointed commissioner.
(2) Every commissioner shall, in addition to any power which he might lawfully exercise as a magistrate, have in the matter so referred to him the same powers as the Court, of—
(a) summoning and examining witnesses ;
(b) requiring the production or delivery of documents;
(c) punishing defaults by witnesses; and
(d) allowing costs and expenses to witnesses.
(3) The examination so taken shall be returned or reported to the Court in such manner as that Court directs.
Section 690. Affidavits in Nigeria and elsewhere
An affidavit required to be sworn under the provisions or for the purposes of this Part of this Act may be sworn in Nigeria or elsewhere in accordance with the provisions of the Oaths Act or under any other enactment or law providing for the administration of oaths and all Courts, Judges, commissioners, and persons acting judicially shall take judicial notice of the seal or stamp or signatures, as the case may be, of any Court, Judge, person, consul, or vice-consul, attached, appended, or subscribed to any such affidavit, or to any other document to be used for the purposes of this Part of this Act.
Section 691. Power of Court to void dissolution of company
(1) Where a company has been dissolved, the Court may, at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the Court to be interested, make an order, upon such terms as the Court may deem fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.
(2) A person on whose application the order was made, shall, within seven days after the making of the order or such further time as the Court may allow, deliver to the Commission for registration an office copy of the order, and if that person fails to do so he is liable to a penalty as prescribed by the Commission in the regulations.
Section 694. Companies liquidation account defined
(1) There shall continue to be an account called the Companies Liquidation Account, kept on behalf of the Commission by the Accountant-General of the Federation, into which shall be paid all money received by the Commission in respect of proceedings under this Act in connection with the winding-up of companies.
(2) All payments out of money standing to the credit of the Commission in the Companies Liquidation Account shall be made by the Accountant-General in the prescribed manner.
Section 695. Investment of surplus funds in government securities
(1) If the cash balance standing to the credit of the Companies Liquidation Account is in excess of the amount which in the opinion of the Commission is required for the time being to answer demands in respect of companies’ estates, the Commission shall notify the excess to the Accountant-General of the Federation and the Accountant-General of the Federation, may invest the excess or any part thereof, in Government securities, to be placed to the credit of such account as he may deem fit in the circumstances.
(2) If any part of the money so invested is, in the opinion of the Commission, required to answer any demand in respect of companies’ estates, the Commission shall notify the Accountant-General of the Federation the amount so required, and the Accountant-General of the Federation shall thereupon repay to the Commission such sum as may be required to the credit of the Companies Liquidation Account, and for that purpose may direct the sale of such part of the securities as may be necessary.
(3) The dividends on investments under this section shall be paid to such account as the Accountant-General of the Federation may direct, and regard shall be had to the amount thus derived in fixing the fees payable in respect of proceedings in the winding-up of companies.
Section 696. Separate accounts of particular estates
(1) The Commission shall keep an account of the receipts and payments in the winding-up of each company, and, when the cash balance standing to the credit of the account of any company is in excess of the amount which, in the opinion of the Committee of Inspection, is required for the time being to answer demands in respect of that company’s estate, the Commission shall, on the request of the committee, invest the amount not so required in Government securities, to be placed to the credit of the said account for the benefit of the company.
(2) If any part of the money so invested is, in the opinion of the Committee of Inspection, required to answer any demands in respect of the estate of the company, the Commission shall, on the request of that committee, raise such sum as may be required by the sale of such part of the said securities as may be necessary.
(3) The dividends on investments under this section shall be paid to the credit of the company.
(4) Where the balance at the credit of any company’s account in the hands of the Commission exceeds N1,000,000 and the liquidator gives notice to the Commission that the excess is not required for the purposes of the liquidation, the company is entitled to interest on the excess at the current bank rate.
Section 697. Returns by officers in winding-up
The officers of the Courts acting in the winding-up of companies shall make to the Commission such returns of the business of their respective Courts and offices, at such times, and in such manner and form as may be prescribed, and from those returns the Commission shall cause books to be prepared which shall be opened for public information and searches.
Section 698. Annual accounts of company winding-up and disposal
(1) The Commission and every officer by whom fees are taken under this Act in relation to the winding-up of companies, shall make returns and give information to the Accountant-General of the Federation in such form as he may require and the accounts of the Commission relating to the winding-up of companies shall be audited at the end of each year in the manner prescribed by the Constitution.
(2) The Accountant-General of the Federation shall, before the end of each year in which the audit is made, prepare for submission to the President an account of the winding-up of companies, as audited by the Accountant-General for the Federation, showing in respect of such winding-up, the receipts and expenditure during the previous year, and any other matter which the President or the Minister, as the case may be, may require.
What this means
Short answer
Within two years of a dissolution, the court can declare it void on the application of the liquidator or an interested person (section 691). In any winding up the court can have regard to creditors’ and contributories’ wishes (section 686), and winding-up money is held in the Companies Liquidation Account (sections 694 to 696).
Meetings to find out creditors’ and contributories’ wishes
On any winding-up matter the court may have regard to the wishes of creditors or contributories, shown by sufficient evidence, and can direct meetings to be called, appoint a chairman and have him report the result. Creditors’ wishes are weighed by the value of each debt, and contributories’ by the votes the Act or the articles give them (section 686).
Proving documents and evidence
- Courts take judicial notice of the signatures of court officers and the seal or stamp of the court on documents made under this Part (section 687).
- Documents purporting to be orders or certificates of the Attorney-General of the Federation or the Commission, signed or sealed as the section requires, are received in evidence without further proof unless the contrary is shown. A certificate that an order or act is theirs is conclusive (section 688).
- In a winding up, all magistrates are commissioners for taking evidence. The court can refer the examination of witnesses to a commissioner, who has the court’s powers to summon and examine witnesses, require documents, punish defaults and allow costs (section 689).
- Affidavits for winding-up purposes can be sworn in Nigeria or elsewhere under the Oaths Act or other law, and courts take judicial notice of the seals and signatures on them (section 690).
Voiding a dissolution
Where a company has been dissolved, the court can at any time within two years of the dissolution, on the liquidator’s application or that of another interested person, declare the dissolution void on terms it thinks fit. Proceedings can then be taken as if the company had not been dissolved. The applicant must deliver an office copy of the order to the Commission within seven days (section 691). See also how the Commission strikes a company off the register.
The Companies Liquidation Account
- The Companies Liquidation Account is kept on the Commission’s behalf by the Accountant-General of the Federation. All money the Commission receives in winding-up proceedings is paid into it, and payments out are made by the Accountant-General in the prescribed manner (section 694).
- Surplus cash can be invested in Government securities and recalled when needed. Dividends go to an account the Accountant-General directs and are taken into account in setting fees for winding-up proceedings (section 695).
- The Commission keeps a separate account of receipts and payments for each company. At the committee of inspection’s request it invests surplus in Government securities for that company’s benefit. If a company’s balance exceeds ₦1,000,000 and the liquidator says the excess is not needed, the company earns interest at the current bank rate (section 696).
Returns and annual accounts
Court officers acting in winding ups make returns to the Commission, which keeps books open for public information and searches (section 697). The Commission and officers taking winding-up fees give returns to the Accountant-General of the Federation, the accounts are audited each year, and the Accountant-General prepares an annual account of winding ups for the President (section 698).
Questions and answers
Can a dissolved company be revived?
Yes. Within two years of the dissolution the court can, on the application of the liquidator or an interested person, declare the dissolution void (section 691).
Where does money collected in a winding up go?
Into the Companies Liquidation Account, kept for the Commission by the Accountant-General of the Federation (section 694).
Does the court have to follow creditors’ wishes?
No, but it may have regard to them, proved by sufficient evidence, and can direct meetings to find out what they are (section 686).
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