Corporate and Business Law · November 2025

a. i. A company becomes a distinct legal personality from its members, on incorporation ii. Consequences of company incorporation include:

• separate legal personality;

• limited liability of company members;

• perpetual succession;

• ability to hold and dispose of property in company’s name;

• transferability of members’ shares;

• suing and being sued in the company’s name;

• capacity to borrow money in the company’s name and charge its property with the repayment; and

• formalities, publicity, and expense.

b. i. A company of more than four years must hold an Annual General Meeting (AGM) once every calendar year but not later than 15 months form the date of the last AGM.

ii. A company that is newly incorporated newly must hold its first AGM within 18 months of incorporation.

iii. The company need not hold the meeting in the year of incorporation or the next provided it holds it within the 18 months window.

c. The differences between a company and a general partnership

i. A company is a separate legal entity but a general partnership is not.

ii. The liability of members of a company may be limited, but the members of a general partnership have unlimited liability.

iii. Whereas members of a company may not participate in managing the company, all members of a partnership (except sleeping partners) participate in managing the business.

iv. Registration may be optional for a general partnership but is compulsory for a company. 96

v. A company has perpetual succession but the death or bankruptcy of a general partner terminates its life automatically.

vi. The property of a company belongs to it but the properties in a general partnership belong to its members.

vii. A company may sue and be sued in its corporate name, but it is not so with a general partnership.

viii. A company may borrow money in its name and charge its property with its repayment but a general partnership cannot.

Examiner’s report The question tests candidate’s understanding of the consequences of company incorporation; the rules on holding companies’ Annual General Meeting when the entity is newly incorporated as well as when it is over four years in existence; and the distinctions between a company and a general partnership. Attempt rate was 90% of which 55% scored average marks and above. The only identifiable pitfall of the candidates that performed poorly was their inadequate preparation for the examination. Candidates for future examinations are advised to devote more time to their preparation.

Marking Guide Marks Marks

a. i. Legal personality as incorporation consequence 2

ii. Consequences of incorporation (1 mark each for any 5 points) 5 7 b. i. The requirements for holding AGM of company older than 4 years incorporation 3 ii. The requirements for holding AGM of newly incorporated company 4 7 c. Distinctions of company from partnership (1 mark each point up to 6 points) 6 Total 20 97

a. Conducts that constitute cybercrimes

i. Hacking of a computer device: Intentionally accessing a computer system or network without authorisation. It may take the form of password breaking, unauthorised login, and intrusion into personal or financial accounts.

ii. Unlawful interception of communications, that is, interception, monitoring, or surveillance of electronic communications without lawful authority, including intercepting emails, messages, or data transmissions.

iii. Computer related forgery: Altering, creating, or manipulating electronic documents or data with intent to deceive, including forging e-signatures, receipts, certificates, or financial records.

iv. Computer-related fraud - Using computers or digital systems to commit fraud, examples include online scams, phishing, ATM card fraud, and obtaining credit or money by false pretence by electronic means.

v. Cyber-stalking and cyber-bullying - Sending electronic messages that are pornographic, threatening, intimidating, malicious, or intended to harass, or cause harm to another person.

vi. Cybersquatting, that is, registering or using internet domain name or other word that is registered, business name, trademark, owned by an individual or corporate and government with criminal intent so as to interfere with the use by the legitimate owner or prior user.

vii. Identity theft and impersonation: Impersonating another person online, create fake social media accounts, or use another’s digital identity to commit fraud or mislead others.

viii. Distribution of malware : Deliberate and malicious spreading of viruses or any malware (ransomware, spyware, spyware, worms, and trojans) that damage critical information in public, private, or financial institution’s computers.

ix. Creation, sale, distribution, or possession of malicious software, such as viruses, trojans, ransom ware, or any software designed to disrupt or steal data.

x. Offering for sale and distribution of hardware or other tools that are employed to commit cybercrime. 98

xi. System interference: Disrupting, disabling, or interfering with the functioning of computer systems, including DoS attacks, website shutdowns, or altering system configurations or unlawful and intentional hindering of the functioning of a computer system by inputting, transmitting, damaging, deleting, deteriorating, altering or suppressing computer data.

xii. Data interference (data theft or modification): Unauthorised alteration, deletion, deterioration, or suppression of computer data. Changing examination scores, deleting company records, or manipulating bank data fall here.

xiii. Electronic payment card fraud: Relating to payment cards, including: unauthorised card use, card skimming, or manipulating ATM/POS devices.

xiv. Cyber-extortion: Demanding money or property by threatening to publish, delete, or compromise computer data or personal information.

xv. Online child exploitation: Introducing, possessing, sharing, or distributing child pornography or engaging in online grooming of minors constitutes a serious cybercrime.

xvi. Cyberterrorism: Use of computers to support terrorist acts, recruit members, spread extremist information, or attack critical national infrastructure.

xvii. Attacks against Critical National Information Infrastructure (CNII), that is, essential systems, such as banking, defence, health, telecommunications, and power.

b. The issue is whether or not Wale is bound by the acts of the partnership after ceasing to be a member. This is in the light of his name remaining on the partnership’s document, which raises partnership by holding out or estoppel. Under the Partnership Act/Law, Wale would still be jointly liable together with the other partners for the obligations that arose under the firm’s contract with Ngozi.

c. This question raises the effect of the driver’s negligence while driving his employer’s vehicle in the course of his employment. It thus raises the application of the principle of vicarious liability. Since the driver was acting in the course of his employment when he negligently injured Sola, his employer is vicariously liable to Sola for the driver’s negligent act. 99

d. The issue in this hypothetical case is the legal implication of Kuti’s action of stealing his employer’s money, particularly his employer’s right in an employer/employee relationship. Kuti’s action constitutes gross misconduct for which his employer was justified in dismissing him.

Examiner’s report The question tests candidate’s understanding of conducts that are classified as cybercrimes at law; the apparent joint liabilityof a retired partner for a partnership’s obligations when his name remains on the partnership’s document after retirement; vicarious liability of an employer for an employee’s act done in the course of employment; and dismissal as the an appropriate sanction for gross misconduct of an employee. Attempt rate was around 90% of which about 70% scored average marks and above. The only identifiable pitfall of the candidates that performed poorly was their inadequate understanding of the liability of a partner. Candidates for future examinations are advised to devote more time to the study of partnership in the ICAN Study Text in their preparation.

Marking guide Marks Marks

a. Cybercrimes conducts (2 marks each each for any point, subject to maximum of 3 points) 6 b. Effect of Wale’s name on partnership notepaper as fact of partnership by holding out estoppel; 3

- Wale is jointly liable to Ngozi 3 6 c. XYZ Limited’s vicarious liability 6 d. Kuti’s action as gross misconduct justifying his dismissal 2 Total 20

a. Section 4(1) of the Act provides that a financial institution and designated non- financial business and profession shall: i. identify a customer by means of identification documents as may be prescribed by regulations made pursuant to the money laundering prohibitions Act (NIN, Driver’s license, BVN, utility or electricity bills, other government issued identification documents, etc); 100

ii. identify the customer by independent source documents, data or information (customer’s physical or residential address by using utility bill, electricity bill, verification corporate bodies at the Corporate Affairs Commission, etc);

iii. identify the beneficial owner through reliable sources such as a financial institution or designated non-financial business and profession; and

iv. act reasonably to ascertain that a person acting purportedly for a customer has the requisite authority.

b. The issue in this question is the display of goods online or on a website, which is not an offer but an invitation to treat. Ola’s online payment was the offer to buy the freezer. The automatic confirmation e-mail that the website sent, was an acknowledgment of the prospective buyer’s offer but not an acceptance. The cancellation of Ola’s order was an indication of non-acceptance of the order by the online store. Advising the parties, therefore, there is no binding contract between the parties.

c. The following categories of person may petition for a company’s winding up: i. the company itself or a director if authorised by a special resolution; ii. the creditors of the company; iii. the shareholders/contributories (members) of the company; iv. the Corporate Affairs Commission; v. the (official) receiver; and vi. trustees in bankruptcy

d. The rights of an employee under the statute and common law include:

i. right to wages for work done; ii. right to safe working conditions and equipment; iii. right to leave, including sick and maternity leave, with full pay; and iv. right to freedom from unlawful deductions from wages; v. rights to advance notice of termination of employment or payment in lieu of notice; and vi. right to join lawful trade unions.

Examiner’s report The question tests candidate’s working understanding of the legal means by which financial institutions should identify their customers; online display of goods as an invitation to treat; persons that may petition the court for company winding up; and the rights of an employee against his employer. 101 Attempt rate was about 80% of which about 75% scored average marks and above. The only identifiable pitfall of the candidates that performed poorly was their inadequate understanding of online display of goods as invitation to treat. Candidates for future examinations are advised to devote more time to their preparation by studying the ICAN Study Text more diligently.

Marking guide Marks Marks a. The means by which financial institutions identify customers (2 marks each for any means, subject to maximum of 3 means) 6

b. Online goods display as invitation to treat 3 -Order cancelation as possible event after payment 3 6 c. Categories of person that may petition for company winding up (1 mark each for any point, subject to maximum of 4 points) 4 d. Rights of an employee (1 mark each for each point, subject to maximum of 4 points) 4 Total 20

4a. i. Agency by estoppel arises when a principal’s conduct or statement prevents him from denying his agent’s authority. The agent in this situation is said to have apparent or ostensible authority.

ii. The conditions for agency by estoppel are: representation of the principal by words or conduct that the agent has authority;

• reliance by the third party on the representation;

• the third party must have acted in good faith believing that the agent had authority; and

• the third party must have altered his position to his detriment while relying on the agency.

b. A personal representative has the duty to:

i. realise and protect the deceased’s estate; ii. obtain a grant of probate or letters of administration; iii. settle the debts and other obligations of the estate; iv. keep proper accounts and records on the estate; v. distribute the estate to beneficiaries; vi. avoid conflict of interest and duty; vii. act in good faith; and viii. act with due care and diligence. 102

c. i. The issue in this hypothetical case is the duty of a proposed insured to disclose to the insurer all material facts to enable the latter to make an informed decision on the proposal.

ii. Tade’s high blood sugar and hypertension were material facts that would have affected the insurer’s decision to or not to insure Tade, therefore, the insurer is justified in refusing to pay Tade’s claim.

iii. Insurable interest is a legal or equitable right in the subject matter of insurance, such that the insured would suffer a real, direct and financial loss if the insured event occurred, or would gain if it did not occur.

d. A compromise is a debt or dispute settling mechanism through mutual concessions of the creditor and the debtor company.

Examiner’s report The question tests candidate’s understanding of the principle of agency by estoppel and the conditions for its application; the duties of a personal representative in the law on administration of estate; disclosure of material facts as well as the meaning of insurable interest in insurance law; and compromise as a means of settling company indebtedness. Attempt rate was about 80% of which over 60% scored average marks and above. The only identifiable pitfall of the candidates that performed poorly was their inadequate understanding of the law of insurance. Candidates for future examinations are advised to study the area of insurance law more in the ICAN Study Text on Business and Corporate Law.

Marking guide Marks Marks a. i. Concept of agency by estoppels 2 ii Conditions for agency by estoppels (2 marks each for any point, subject to maximum of 2 conditions) 4 b. Duties of a personal representative of a deceased’s estate (1 mark each for any 6 duties; subject to a maximum of 6 duties) 6 c. i. The importance of material facts disclosure in insurance proposal 2 Clarification of non-disclosure as vitiating a claim 2 ii. Definition of insurable interest 2 6 Definition of compromise 2 Total 20 103

5a. i. The dual nature of GSM evidence refers to the real (physical) evidence, which is stored by telecom operators, for example SIM registration data and the documentary evidence, which comprise printable and certifiable records from the service provider, for example call logs.

ii. The sources of Nigerian law are:

• The Constitution

• Local legislation

• Received English Law

• Judicial Precedents (case law)

• Customary Law

• International Law 5b. The audit committee has the objectives and functions, subject to the provisions of the articles of the company, to: i. determine if the accounting and reporting policies of the company comply with the requirements of law and agreed ethical practices;

ii. review the scope and planning of audit requirements;

iii. review the findings on management matters in conjunction with the external auditor and departmental responses thereon;

iv. keep under review the effectiveness of the company’s system of accounting and internal control;

v. make recommendations to the Board of Directors on the appointment, removal and remuneration of the company’s external auditors; and

vi. authorise the internal auditor to carry out investigations of any activities of the company which is of interest or concern to the committee. (section 404(7) CAMA) 5c. i. Hire purchase is a bailment of goods with an option to buy it, while the ownership of the property remaining with the owner until all installments

ii. The elements of a hire purchase contract are as follows:

• the parties (owner, hirer, finance company);

• the instalments payable;

• terms on delivery of goods

• hirer having possessions without ownership;

• owner retaining goods title;

• hirer’s option to purchase; 104

• parties’ right to terminate contract; and

• statutory information.

Examiner’s report The question tests candidate’s understanding of the nature of GSM evidence under the law on electronic evidence; functions/objectives of the audit committee of a company; the elements of a hire purchase contract the distinctions of that contract from that of sale of goods. Attempt rate was 75% of which about 70% scored average marks and above. The identifiable pitfall of the candidates that performed poorly was their inadequate understanding of the law on GSM evidence. Candidates for future examinations are advised to devote more time to the study of the law on electronic evidence in the ICAN Study Text.

Marking guide Marks Marks a. i. The dual nature of GSM evidence (2 marks each for any nature, subject to maximum of 2 nature) 4 ii. Sources of Nigerian law (1mark each for any source subject to maximum of 2 sources) 2 6 b. Functions/objectives of audit committee (2 marks each for any 4 functions/objectives) 8 c. i. The differences between hire purchase from sale of goods 3 ii. Elements of a hire purchase contract (1 mark each for any element subject to a maximum of 3 elements) 3 6 Total 20 105

a. The advantages of Alternative Dispute Resolution (ADR)

i. It is cheaper and faster than litigation. ii. It is able to preserve relationship. iii. It is a flexible and less technical procedure. iv. The parties have freedom to choose experts in the applicable field. v. The proceedings enjoy confidentiality.

b. i. Goods are defined under sale of Goods Act 1893 as“[all]chattels personal other than things in action and money, and they include emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale ii The terms implied into a sale by sample are as follows:

• the bulk must correspond with the sample;

• the buyer must have had a reasonable opportunity to compare the bulk with the sample; and

• the goods must be free from latent defects that are not apparent on reasonable inspection of the sample.

c. i. The issue in this hypothetical case is the ground upon which Bukky could legally have the value on the cheque. Bukky could have it as a holder for value in due course, that is one who takes a negotiable instrument in good faith, for value, and without notice of the defect on it.

ii. Negotiable instruments are of the following types:

• cheque;

• bill of exchange; and

• promissory note.

a. A fixed charge immediately attaches to a specific asset of the company, for example land, machineries, etc. The company cannot deal with that asset without the consent of the charge holder. Conversely, a floating charge hovers over a group of changing or circulating assets of the company, e.g. stock-in-trade. The company could use or dispose the assets in the ordinary course of business until the charge crystallizes. 106

Examiner’s report The question tests candidate’s understanding of the advantages of ADR mechanisms; definition as well as meaning of implied terms in sale of goods contract; application of the principle of holder for value in due course of a cheque as well as the types of negotiable instrument; and differences between fixed charge and floating charge. Attempt rate was about 75% of which about 70% scored average marks and above. The identifiable pitfall of the candidates that performed poorly was their lack of understanding of the applicability of the ’holder for value in due course’ principle to a stolen cheque situation. Candidates for future examinations are advised to devote more time to the the study of the applicability of the ’holder for value in due course principle’ to a stolen cheque situation as they study the ICAN Study Text.

Marking guide Marks Marks

a. Advantages of ADR (2marks each for any advantage) 4 b. i. Definition of goods 2 ii Implied terms in sale by sample (2 marks each for any 2 terms subject to any 2) 4 6 c. i. The application of ’holder for value in due course principle 2 - Justifying Bukky’s title on basis of the principle 2 ii. Types of negotiable instrument (1 mark each for any 2 types) 2 6 d. Differentiation of fixed charge from floating charge (2 marks each for any charge) 4 Total 20 107