Corporate and Business Law · May 2026

(a) The duties of a personal representative are to:

i. obtain letters of administration when there is no Will or probate when there is a Will; ii. call in and preserve the estate of the deceased; iii. ensure reasonable burial of the deceased; iv. settle all lawful liability of the estate; v. distribute the remaining assets to the beneficiaries according to the Will or applicable law; vi. complete administration within reasonable time; and vii. keep proper books and accounts of the estate.

(b) The law on re-appointment of a retiring auditor is as follows:

i. A retiring auditor shall be re-appointed without the company passing any resolution at any annual general meeting. ii. The reasons for which a retiring auditor may not be re-appointed are as follows:

• he is not qualified for re-appointment;

• the company has passed a resolution appointing a replacement or stating expressly that he must not be re-appointed; or

• he has notified the company in writing of his unwillingness to be re- appointed.

(c) In the law of insurance:

i. Insurable interest requires that an insured person must have some legal relationship with the subject matter of insurance worthy of preservation otherwise the contract would be void. ii. Contribution is known as the right of contribution whereby an insurer who has paid under a policy to call upon other insurers equally liable for the same insured risk to contribute to the payment.

(d) The securities in which a public trustee may invest include the following:

i. securities created or issued by or on behalf of the Government of the Federation of Nigeria;

ii. securities of a State government declared President of the Federation by notice published in the Federal Gazette to be securities in which a trustee can invest by the;

iii. debentures and fully paid up shares of any public company incorporated and registered under the Companies and Allied Matters Act. In addition, the shares and debentures must be quoted on the Nigerian Exchange (NGX) Limited; and

iv. securities created or issued by other companies or corporations that are listed in the schedule to the Trustee Investment Act.

Examiner’s report The question tests candidates’ understanding of the duties of a personal representative, the procedure for reappointment of a company auditor and the reasons for which a person may not be reappointed, insurable interest and contribution in the law of insurance, and securities in which a public trustee may invest. Attempt rate was 80%, and pass rate was 30%. The common pitfalls of the candidates were their inadequate understanding of the duties of a personal representative and the law on reappointment of company auditors. Candidates are advised to study the duties of personal representatives as well as the law of reappointment of auditors more diligently in ICAN Study Text when preparing for future examination.

Marking guide Marks a. Duties of a personal representative (1 mark each for any 4 duties) 4 b.i The procedure for reappointment of company auditor (2 marks for correctly stating the procedure) 2 ii. Reasons a retiring auditor may not be reappointed (2 marks for each reason, subject to a maximum of 2 reasons) 4 c.i. Explaining the concept of insurable interest (2 marks for correct explanation) 2 ii. Explaining contribution in insurance (2 marks for correct explanation) 2 d. Securities a public trustee may invest in (2 marks for each security, subject to a maximum of 3) 6 Total 20

(a) i. The qualifications of a company secretary:

• Membership of the Institute of Chartered Secretaries and Administrators (ICSAN);

• A legal practitioner within the meaning of the Legal Practitioners Act, Cap L11, LFN, 2004;

• Membership of any professional body of accountants established from time to time by an Act of the National Assembly; or

• Any person who has held the office of the secretary of a public company for at least three years of the five years immediately preceding his appointment in a public company; or

• A body corporate or firm consisting of the professionals in (a), (b), or (c).

ii. A small company is not required to have a company secretary.

(b) In the facts presented:

i. Andrew has committed the offence of deliberate imputation of wrong data in his employer’s computers for fraudulent purposes (computer related forgery). ii. If found guilty, Andrew may be liable to three years imprisonment or a fine of not less than N7 million or both. iii. Andrew would have committed a computer related fraud under Section 14(1) of the Cybercrimes (Prohibition, Prevention, etc.) Act 2015.

(c) The legal grounds upon which an employee could be dismissed include: i. an act or conduct likely to bring the employer into disrepute; ii. the servant’s practice or conduct that exposes the master to loss of public confidence; iii. gross immorality; iv. absenteeism without leave or permission, amounting to an abandonment of duties; or v. gross misconduct, which may include insubordination, habitual drunkenness, gross negligence, willful disobedience of lawful orders and so on.

(d) The exceptions to the principle of privity of contract include:

i. insurance; ii. trust; iii. agency; iv. restrictive covenants; v. negotiable instruments; and vi. sale by the Court.

Examiner’s report The question tests candidates’ understanding of the qualifications of a Company Secretary and the exemption of a small company from appointment of Company Secretary, the offences of computer related forgery as well as computer related fraud, grounds for dismissal of an employee, and the exemptions to the principle of privity of contract Attempt rate was 70%, and pass rate was 50%. The common pitfalls of the candidates were their inadequate understanding of the law on computer related forgery and fraud as well as the exemptions to the principle of privity of contract. Candidates are advised to study the offences of computer related forgery as well as computer related fraud, and the exemptions to the principle of privity of contract more diligently in ICAN Study Text for better performance in future examination.

Marking guide Marks a. i Qualifications of persons that could be appointed as Company Secretary legally (1 mark per point subject to maximum of 4 points) 4 ii. Company not required to have Company Secretaries (2 marks for correct answer) 2 b. i Offence Andrew could be charged with (2 marks for the correct answer) 2 ii. Punishment Andrew may be liable to (2 marks for the correct answer) 2 iii. Offence Andrew would have committed for causing his boss loss of property but not for the purpose of conferring any economic benefit himself (2 marks for the correct answer) 2 c. Legal grounds upon which an employee could be dismissed (2 marks for each point, subject to a maximum of 3 points) 6 d. Exceptions to the principle of priority (1 mark for each correct point, subject to a maximum of 2 points) 2 Total 20

(a) The rules on keeping and filing of accounting records under the CAMA include the following: i. a company shall keep accounting records in accordance with section 374 of the CAMA; ii. the records shall disclose accurately the financial position of the company and enable the directors to ensure compliance with CAMA; iii. every public company must keep its audited accounts displayed or posted on its website (section 374(6), CAMA; iv. the accounting records shall be at the company’s registered office or such other place in Nigeria as the directors think fit, and shall be open to inspection by the officers of the company (section 375(1), CAMA); v. the company shall preserve the accounting records for 6 years from the date the company made them, subject to any direction on disposal of records under winding up rules made pursuant to CAMA (section 375(2), CAMA); and vi. an officer of a company that fails to comply with the accounting records provisions commit an offence punishable with a fine a the CAC may specify, “unless he shows that he has acted honestly, and that in the circumstances in which the business of the company was carried on, the default was excusable” (section 376, CAMA).

(b) i. Akin as a director of Juguda Limited owes the company a number of duties including the fiduciary duty not to make secret profits from any transactions entered into for and on behalf of the company.

ii. Akin is advised not to keep the N2 million discount that he obtained from the vendor but account to Juguda Limited for it.

(c) Chinedu and Bimbo entered into an e-contract. The contract is modeled, specified, executed and deployed by a software system. The concept of e-contract is very similar to traditional (paper based) commercial contract. There usually are the offer, acceptance, consideration and intention to create legal relations. The other basic principles of contract as discussed earlier in this chapter also apply to e-contract.

(d) Under Section 7(1) of the Money Laundering (Prohibition) Act, special surveillance is required when a transaction :

i. involves a frequency which is unjustifiable or unreasonable; ii. is surrounded by conditions of unusual or unjustified complexity; iii. appears to have no economic justification or lawful objective; iv. is inconsistent with the known transaction pattern of the account or business relationship; or v. in the opinion of the financial institution or non-financial business and profession involves the proceeds of a criminal activity, unlawful act, money laundering, or terrorist financing.

Examiner’s report The question tests candidates’ understanding of the rules for keeping and filing of accounting records under the Companies and Allied Matters Act (CAMA), 2020 (as amended), the duties of a director not to make secret profit, formation of e-contract, and special surveillance as well as reporting of transactions that appear to be money laundering. Attempt rate was about 70%, and pass rate was about 60%. The common pitfalls of the candidates were their inadequate understanding of the law on keeping and filing of accounting records as well as the transactions that require special surveillance and reporting for appearing to be money laundering. Candidates are advised to study the law on keeping and filing of accounting records under the CAMA, 2020 as well as the transactions that require special surveillance and reporting for appearing to be money laundering more diligently in ICAN Study Text in their future preparation.

Marking Guide Marks a. Rules for keeping and filing company accounts (2 marks for each correct answer, subject to a maximum of 3 points) 6 b. Duties of a director of a company (2 marks for the correct answer, subject to a maximum of 2 points) 6 c. Types of contract entered by the 2 parties (2 marks for the correct description of the type of contract entered into) 2 d. Identification of suspicious transactions (1½ marks for each correct suspicious transaction identified, subject to a maximum of 4 points) 6 Total 20

(a) According to section 620 of the CAMA, the company may wind up voluntarily:

i. when the period for its duration by its articles of association expires, or the event, if any, occurs on the occurrence of which the articles provide that the company is to be dissolved, and the company passes an ordinary resolution requiring the company to be wound up voluntarily; or ii. if the company resolves by special resolution that it be wound up voluntarily. Keep in mind that voluntary winding up could take the form of members’ voluntary winding up, or creditors’ voluntary winding up. Members’ voluntary winding up occurs where the company has made a declaration of solvency and delivered, the declaration to the Corporate Affairs Commission (CAC). Creditors voluntary winding up occurs where no declaration of solvency has been made by the company and filed with the CAC.

(b) Concerning voting at a general meeting of a company:

i. resolution put to vote at a general meeting shall be decided on a show of hands or electronic voting, except a poll is demanded by eligible persons (before or on the declaration of the result of the show of hands) demanded

ii. The following persons are entitled to demand for a poll at a general meeting:

• the chairman, where he is a shareholder or a proxy;

• at least three members present in person or by proxy;

• a member or members of the company present in person or by proxy who constitute not less than one-tenth of the total voting rights of all the members that have the right to vote at the meeting; or

• any member(s) that hold shares in the company that give the right to vote at the meeting, which shares are paid up to the value of not less than one- tenth of the total sum of money paid up on all the shares that confer such voting right. (c ) The principal objects of the Central Bank of Nigeria are to:

i. ensure monetary and price stability within the Nigerian economy; ii. issue legal tender currency in Nigeria; iii. maintain external reserves so as to safeguard the international value of the legal tender currency; iv. promote a sound financial system in Nigeria; and v. act as banker to the Federal Government of Nigeria, providing it economic and financial advice.

Examiner’s report The question tests candidates’ understanding of the types of company voluntary winding up, voting on company resolutions as well as eligibility to demand a poll, and the principal objects of the Central Bank of Nigeria (CBN). Attempt rate was about 75%, and pass rate was about 40%. The common pitfalls of the candidates were their inadequate understanding of the types of company voluntary winding up, and voting on company resolutions as well as eligibility to demand a poll. Candidates are advised to study company voluntary winding up, and voting on company resolutions as well as eligibility to demand a poll in ICAN Study Text in their future preparation.

Marking guide Marks a. Types of winding up (3 marks for each correct discussion of voluntary winding up, subject to a maximum of 2 types) 6 b.i How resolutions are decided (2 marks for correct discussion of how resolutions are decided 2 ii. Categories of persons that are eligible to demand for a poll (1½ marks for each answer, subject to a maximum of 4 points) 6 c. The principal objects of the CBN (1½ marks for each correct principal objects, subject to a maximum of 4 points) 6 Total 20

a. The advantages of alternative dispute resolution (ADR) are as follows:

i. ADR affords cordial and peaceful environment rather than the “adversarial system of the law courts, thus it is more convenient and dignifying to go into ADR.

ii. The opportunity, which parties have to appoint an expert on the particular subject matter in dispute to hear and decide the issue, is an important asset to ADR.

iii. When it comes to overall cost, there is no doubt that ADR is cheaper than litigation as a means of resolving conflict.

iv. ADR proceedings are usually faster than the court proceedings that are more prone to frequent adjournments. Commercial arbitration is, therefore, usually preferred because time is of essence in commercial and business transactions. There are no pleadings and award comes within 90 days.

v. ADR is much more given to privacy unlike the undue publicity, which might attend civil litigation and adversely affect adversely the image of the parties.

vi. The proceedings in ADR are less tortuous and technical than those in the civil proceedings in courts. There are simple and well-defined rules in arbitration that apply to specific situations circumstances and which parties may agree to adopt.

vii. As in the courts, there is strict adherence to the principles of natural justice.

viii. States as well as multi-national companies prefer arbitration to international litigation. Arbitration takes its pride of place as alternative means of dispute resolution. The disadvantages of alternative dispute resolution (ADR) are as follows:

i. their enforceability is limited; ii. the bargaining powers of the parties could be unequal, which makes their power equation unequal; iii. the mechanisms have no formal precedent as there are in judicial precedents; iv. the mechanisms depend on the parties’ willingness; and v. the presiding official (arbitrator, mediator, or conciliator) could be bias or prejudiced.

b. The relationship between Andrew and Angela is that of apparent or ostensible authority. This is based on the fact of the representation that Andrew made to Brenda that Angela had the authority to make purchases on Andrew’s behalf. Based on the application of the ostensible authority to this matter, Andrew is liable to pay Brenda five million Naira, being the unpaid price of the goods that Angela absconded with.

c. In sale of goods contracts:

(i) The following are the remedies of an unpaid seller:

• lien over the goods;

• suing for the price of the goods;

• withholding delivery of the goods;

• stoppage of goods in transit; and

• suing for damages for breach of contract.

(ii) The implied terms of a sale of goods contract are as follows:

• the seller has a good title;

• the buyer shall have a quiet possession;

• the goods shall correspond to the sample where sold by description;

• the goods shall be of merchantable quality;

• the goods are free from encumbrances; and

• the goods shall be fit for the purpose stated by the buyer.

d. The factors that vitiate a contract are as follows:

• mistake;

• misrepresentation;

• duress;

• undue influence; and

• illegality.

Examiner’s report The question tests candidates’ understanding of the advantages and disadvantages of alternative dispute resolution (ADR), the creation and implication of apparent or ostensible authority in agency law, the remedies of an unpaid seller as well as implied terms in sale of goods contract, and factors that vitiate a contract. Attempt rate was about 90%, and pass rate was about 65%. The common pitfalls of the candidates were their inadequate understanding of ADR and the ways of creating agency. Candidates are advised to study the basics of ADR and how agency is created in ICAN Study Text in their future preparation.

Marking guide Marks a. Advantages and disadvantages of ADR (1 mark for each discussion of advantage of ADR, subject to a maximum of 3 points and 1 mark for each discussion of disadvantage of ADR subject to a maximum of 3 points) 6 b. Explaination the type of agency relationship and advise on possibility liability (3 marks for correct discussion of the type of agency relationship and 3 marks on advice on possibility liability) 6 c. (i) Remedies of an unpaid seller (1 mark each for each remedy, subject to a maximum of 3 points) 3 (ii) Implied terms of sale of goods contract (1 mark each for each implied term subject to a maximum of 3 points) 3 d. Factors that vitiate a contract ( 1 mark for each factor, subject to a maximum of 2 points) 2 Total 20

a. The tests for determining if a master/servant relationship exists are as follows:

i. control test; ii. organisational test; iii. economic reality test; iv. obligation test; and v. integration test.

b. A hire purchase contract may be terminated by:

i. a mutual agreement of the parties to rescind the agreement; ii. the performance of all the obligations under the agreement; iii. a provision in the agreement which allows the hirer to terminate the contract at any stage of the agreement without prejudice to his option to purchase the goods; iv. supervening circumstances like fire, destruction, act of God and other similar circumstances outside the control of the parties; v. repudiation by an aggrieved party since the aggrieved party may sue for the breach of an express or implied term and may in addition repudiate such agreement; or vi. an order or judgment of court for conversion or detinue, which may in effect bring the agreement to an end.

c. Fraudulent intents are of the following types:

i. intent to deceive; ii. intent to obtain property or advantage dishonestly; iii. intent to cause loss to another; iv. intent to induce a person to act or omit action; v. intent to conceal or suppress the truth; and vi. intent to cause wrongful gain wrongful loss.

d. In insurance, the types of assignment are as follows:

i. absolute assignment; and ii. collateral assignment.

Examiner’s report The question tests candidates’ understanding of the tests for establishing the existence of a master/servant relationship, the ways of terminating a hire purchase contract, the types of fraudulent intent in criminal law, and the two types of assignment of insurance policy. Attempt rate was about 80%, and pass rate was about 50%. The common pitfalls of the candidates were their inadequate understanding of the tests for establishing the existence of a master/servant relationship, and the types of fraudulent intent. Candidates are advised to study the tests for establishing the existence of a master/servant relationship, and the types of fraudulent intent in ICAN Study Text in their future preparation.

Marking Guide Marks a. Test for determining if master/servant relationship (11/2 marks for each test, subject to a maximum of 4 points) 6 b. Means of terminating a hire purchase contract (11/2 marks each for each method, subject to a maximum of 4 points) 6

c. Types of fraudulent intent (11/2 marks for each type of fraudulent intent, subject to a maximum of 4 points) 6 d. Types of assignment (1 mark for each type of assignment, subject to a maximum of 2 points) 2 Total 20 INSTITUTE OF CHARTERED ACCOUNTANTS OF NIGERIA