BUL 501 - Company Law 1

7/30/2019 BUL 501 - Company Law 1

http://slidepdf.com/reader/full/bul-501-company-law-1 1/20

7/30/2019 BUL 501 - Company Law 1


2

Course Description:

The syllabus examines the historical and legal framework regulating

companies and some other forms of business entities in Nigeria. It considers

the right of an alien to form and participate in business in Nigeria as well as

the statutes to be considered. Also, it traces the history of the Nigerian

company law as well as the establishment of the Corporate Affairs

Commission.

The course examines the basic law regulating the Nigerian Company law

and practice i.e. the Companies and Allied Matters Act, 2004 (CAMA). In

addition some other statutes relevant to the operations of business entities in

Nigeria are also examined. Also, the principles of the English common law

and the doctrines of equity as they relate to businesses incorporated in

Nigeria are examined. Furthermore, for a deep understanding of theconsequences on incorporation, the course examines the concepts of legal

personality, lifting the veil, promoters, the status of pre-incorporated

contracts and the doctrine of ultra vires in relation to the common law

position and their codification into statutes. The constitution and the exercise

of corporate trading powers of the companies are also examined with

particular reference to the effect of memorandum and article of association

on registered companies.

Method of Grading:

NO. ITEMS SCORE

%

1. Class Attendance 05

2. Class participation 05

3. Continuous Assessment 20

4. Semester Examination 70

5. Total 100

Course Delivery Strategies:

The mode of course delivery shall be interactive. Thus, a combination of

face to face techniques shall be employed towards imparting knowledge on

the student i.e Discussions, seminar presentations, tutorial and brief note

taking. It is important to note that all of the major national newspapers cover

company law issues in their business sections. Keeping on top of business

7/30/2019 BUL 501 - Company Law 1


3

and general news developments will help to put learning into context and aid

student’s comprehension of the subject.

Course Justification:

The indigenous occupations of Nigerians are agriculture, hunting, cattle

rearing and trading in rural and peasant economy. The advent of the

Europeans and the Trans- Saharan trade contacts between North Africa and

the Northern part of Nigeria brought about the growth and development of

modern forms of trading in Nigeria.

After the departure of the colonial powers, it was only realistic for the new

government to retain the English law regimes, since the customary laws of

the communities were not in a position to accommodate the sophisticated

forms of modern commerce introduced by the English. The fact thus is thatCompany law is foreign to the customary and indigenous system of law in

Nigeria and its history is part of the history of the received English law

which has become incorporated into the Nigerian legal system.

However, over time, the need arose for the country to evolve a more

dynamic and home grown company law regime to meet up with the

challenges posed by the ever-increasing sophistication of commerce and the

rapid developments in modern trade in Nigeria. Furthermore, the field of

corporate practice has grown to become a very important branch of legal

practice in Nigeria.

There is thus an urgent necessity to provide structured guidance to students

of company law. Consequently, students who take this course are taught to

appreciate and have a deep understanding of the laws and practices

regulating the formation and operations of companies in Nigeria.

Course Objective:

To enable students have a deep understanding of the laws regulating theformation and operations of companies in Nigeria.

Course Requirements:

The subject is a compulsory course that must be passed by all the 500

levels students in the Faculty of Law.

7/30/2019 BUL 501 - Company Law 1


4

The course is to be taken in the 1st

semester.

Students are required to have 75% attendance to be able to write an

examination on the course.

Lecture Modules

Week 1

Topic: Historical Development of Company Law in Nigeria 1

Objectives: At the end of week 1, students should be able to:

Understand and trace the growth of modern business in Nigeria.

Know the status of persons who can own and operate businesses in

Nigeria and limitations (if any).

Know and understand the procedure and legal requirements for alien

participation in businesses in Nigeria and the various incentives

available for alien participation in business.

Know and illustrate the differences between the major forms of

business organisations in the Nigeria.

Describe the advantages and disadvantages of each form of business

organization.

Know the procedure and legal requirements for alien participation in

businesses in Nigeria and the various incentives available for alien

participation in business

Description: The topic will focus on the growth of modern business in

Nigeria; the laws affecting the rights and limitations of persons to own

businesses in Nigeria; the relevant statutes relating to alien participation in

businesses in Nigeria; the different forms of business entities operating in

Nigeria.

Study questions:

1. Mention the relevant statutes for consideration for an alien to

participate in business in Nigeria

2. Company law is foreign to the customary and indigenous system of

law in Nigeria and its history is part of the history of the received

English law which has become incorporated into the Nigerian legal

system. Discuss.

3. What are the advantages and disadvantages of each form of business

organisation?

7/30/2019 BUL 501 - Company Law 1


5

4. With a view to recommending a particular form of business

organisation to a client wishing to set up a cyber-café, compare and

contrast each of the types of business organisation.

Week 2

Topic: Historical Development of Company Law in Nigeria 2


Understand and trace the historical and legal framework regulating

companies from the colonial era, through independence to present

times in Nigeria.

Know the effects of the English common law, doctrines of equity and

the statutes of general application on the development of company

law in Nigeria. Know the impact and challenges that the various company law

regimes have had on the development of company law practice in

Nigeria.

Know the administrative and regulatory body set up under the

Companies and Allied Matters Act 1990 (as amended) to administer

company matters in Nigeria.

Understand the functions of the Corporate Affairs Commission.

Understand the accreditation procedure at the Corporate Affairs

Commission. Identify and understand the functions of other ancillary regulatory

bodies affecting the formation and operation of companies in Nigeria.

Description: The topic will focus on the historical and legal framework

regulating companies from the colonial era, through independence to present

times in Nigeria; the effect of the English common law, doctrines of equity

and the statutes of general application on the development of company law

in Nigeria; the impact and challenges that the various company law regimes

have had on the development of company law practice in Nigeria; the

establishment and functions of the Corporate Affairs Commission (CAC) as

the administrative and regulatory body set up to look at companies’ matters

in Nigeria; the procedure for accreditation at the CAC; the functions of other

ancillary regulatory bodies affecting the formation and operation of

companies in Nigeria.

7/30/2019 BUL 501 - Company Law 1


6

Study questions:

1. Trace the historical and legal framework regulating companies from

the colonial era, through independence to present times in Nigeria.

2. Highlight the effects of the English common law, doctrines of equity

and the statutes of general application on the development of company

law in Nigeria.

3. Highlight the impacts and challenges that the various company law

regimes have had on the development of company law practice in

Nigeria.

Week 3

Topic: Formation of a company in Nigeria 1


Appreciate the provisions of CAMA which regulate the legal

requirement of persons (in terms of minimum number and capacity)

to form a company in Nigeria.

Know the status of persons vested with the responsibility of the

formation of companies in Nigeria.

Understand the detailed procedure for forming a company under

CAMA.

Know the documents of incorporation to be submitted at the CAC.

Description: The topic will focus on the provisions of CAMA which

regulates the legal requirement of persons (in terms of minimum number and

capacity) to form a company in Nigeria; the status of persons vested with the

responsibility of the formation of companies in Nigeria; the detailed

procedure for forming a company under CAMA.

Study questions:

1. Mr. Coker Gold and Madam Gloria Gold are husband and wife having4 children namely: Stella (24 years), Stephen (22 years), Stanley (16

years) and Sandra (13 years). As a new wig, they have approached

you to incorporate a private Liability Company Limited by shares for

them for the sole purpose of manufacturing plastic materials. Your

search at the Corporate Affairs Commission revealed that the first

suggested name: G.G. Plastic Nigeria Limited has been approved as

7/30/2019 BUL 501 - Company Law 1


7

the company’s name. The share capital of the company is

N1,000,000.00 only divided into 1,000,000 ordinary shares of N1.00

each. Being the brain behind the idea of incorporation and the alter

ego of the company, Mr. Coker Gold is to hold 500,000 shares while

Madam Gloria Gold and the children are to hold 100, 000 shares each.

Mr. Coker Gold, Madam Gloria Gold and Sandra are proposed to be

the first directors of the company.

(a) Advise the family on the status of persons that may form a company

and also be made directors.

(b) What are the major steps to be taken towards formation of a company

(c) What are the functions of the Corporate Affairs Commission?

Week 4

Topic: Formation of a company in Nigeria 2


Know the meaning and effect of a registered Memorandum and

Articles of Association under common law and section 41 of CAMA.

Know and understand the different categories of companies under

CAMA.

Know the different classes of capital of a company.

Know the different classes of shares holdings in a company.

Appreciate the differences between public and private companies. Demonstrate the difficulties small businesses have with the company

as a form of business organisation.

Description: The topic will focus on the meaning and effect of a registered

Memorandum and Articles of Association under common law and section 41

of CAMA; the different classification of companies under CAMA; the

different classes of capital of a company; the different classes of shares

holdings in a company; the differences between public and private

companies.

Cases to be reviewed

Hickman v. Kent or Romney Marsh Sheepbreeders Association (1915)

1Ch. 881.

Wood v. Odessa Waterworks Co., (1889) Ch.D. 636.

7/30/2019 BUL 501 - Company Law 1


8

Obikoya v. Ezenwa (1964) 2 All N.L.R 133.

Eley v. Positive Life Assurance Co., (1876) 1 Ex.D 88

Beattie v. Beattie Ltd., (1938)

Quin & Axten v. Salmon (1909) 1 A.C. 442.

Ex Parte Beckwith., (1898) 1 Ch. 324. Rayfield v. Hands (1960) ch. 1

Study questions:

1. Explain the legal effects of memorandum and Articles of Association

of a company, citing relevant legal authorities.

2. In what circumstances will an agent bind a company to a contract

made with a third party? What effects do the memorandum and article

of association have on the power of agents to bind companies to such

contracts?

3. Imale Ltd (‘the company’) is a private tutorial college. Efico, Igiwe

and Agbari are the only directors and shareholders of the company,

each owning 100 shares. In addition, Efico has been appointed the

managing director. The Articles of Association of the company

contain the following clauses:

(a) In the event of a resolution being proposed at any general meeting

of the company for the removal from office of any director, any shares

held by that director shall carry the right to three votes per share.

(b) Taiwo shall be the company secretary.(c) The managing director, Efico, shall have the power to veto any

board decision relating to the teaching of any new course at the

college.

In addition, there is a shareholders’ agreement signed by the company

and all of the shareholders that the company will not increase its share

capital unless all of the parties to the agreement give their consent. At

a recent board meeting, Efico tried to exercise his veto after the board

decided that the college should offer a new course but Igiwe and

Agbari ignored Efico’s veto. They then called a general meeting

which passed a resolution ratifying the decision of the board. The

company will need to raise additional capital to run the course but

Efico has stated that he will not consent to any increase in the

company’s share capital. Igiwe and Agbari are now considering

calling another general meeting to remove Efico as a director. Taiwo

acted as the company secretary but has since been removed.

7/30/2019 BUL 501 - Company Law 1


9

Advise Efico and Taiwo whether they can rely on any of the above

Articles of Association or the shareholders’ agreement.

4. Explain the difference between a private and a public company.

5. Audu Kako, Clement Johnson and Adeolu Olawale are close friends.

In order to strengthen their friendship, they have decided to form a

company with the name ‘Oremeta Multibiz Investment Ltd’ for the

purpose of manufacturing plastic materials and with liability of its

members limited by shares. The registered office of the proposed

company is to be located at No 5, Malawi Way, Ilorin, Kwara State of

Nigeria, while its share capital is to be N10,000,000.00 only divided

into 10,000,00.00 ordinary shares of N5.00 each. Audu Kako, being

the brain behind the plan is to take 50% of the share capital while

Clement Johnson and Adeolu Olawale are to take the remaining 50%

in equal shares.

Explain the various forms of companies that can be established under

CAMA 1990 (as amended) and advise the promoters on the type of

company suitable for them.

Week 5 & 6

Topic: Corporate Personality & Lifting the veil of incorporation

Objectives: At the end of week 5 & 6, students should be able to:

Trace the history of corporate personality and also analyse the case of

Salomon v. Salmon being the locus classicus upon which the concept

is built.

Know and understand the meaning of and philosophy behind the

concept of legal personality.

Know the significance of corporate personality on the registered

company.

Understand the relationship between the concept of corporate

personality and the limited liability company.

Understand the provisions of section 37 of CAMA which

domesticates the concept of legal personality into the Nigerian

company law.

Know the effects of section 37 on the activities of companies in

Nigeria.

7/30/2019 BUL 501 - Company Law 1


10

Understand the meaning of and philosophy behind the concept of

lifting the veil of incorporation.

Know the situations where legislation allows the veil of incorporation

to be lifted.

Know the main categories of lifting the veil by the courts.

Description: The topic will focus on history of corporate personality and

also analyse the case of Salomon v. Salmon being the locus classicus upon

which the concept is built; the significance of corporate personality on the

registered company; the relationship between the concept of corporate

personality and the limited liability company; the provisions of section 37 of

CAMA which domesticates the concept of legal personality into the

Nigerian company law; the effects of section 37 on the activities of

companies in Nigeria; the meaning of and philosophy behind the concept of lifting the veil of incorporation; the situations where legislation allows the

veil of incorporation to be lifted; the main categories of lifting the veil by the

courts.


Salomon v Salomon & Co. [1897] AC 22

Macaura v Northern Assurance Co. [1925] AC 619

Lee v Lee’s Air Farming [1961] AC 12

DHN Food Distributors Ltd v Tower Hamlets Lbc (1976) 3 ALL E.R

462

Bolton (Engineering) Co. Ltd. v Graham and Sons (1934) (1957) 1

Q.B 159

Lennards Carrying Co. v. Asiatic Petroleum Ltd (1915) A.C 705 at

713-714

Marina Nominees Ltd v. F.B.I.R. (1986) 2 NWLR 48

Gilford Motor Company Ltd v. Horne [1933] Ch 935

Jones v. Lipman [1962] 1 WLR 832

D.H.N. Ltd v. Tower Hamlets [1976] 1 WLR 852

Woolfson v. Strathclyde RC [1978] SLT 159

Adams v Cape Industries plc [1990] Ch 433

7/30/2019 BUL 501 - Company Law 1


11

Study questions:

1. Read Salomon v. Salomon & Co (1897) AC 22.

a. Describe the key effects of the change in status from a sole trader to a

limited company for Mr Salomon.

b. What are the key principles that can be drawn from the case?

c. Should Mr Salomon have been liable for the debts of the company?

2. ‘The Salomon decision was a scandalous one which unleashed a tidal

wave of irresponsibility into the business community.’ Discuss.

3. Akilapa and Shogo are mechanics who originally operated their

respective businesses as sole traders. They decided to combine their

experience and resources and formed a company called Kosi-oshi

Mechanics Ltd to run their new business. All of the assets of their

respective businesses were transferred to the new company. The date

of the certificate of incorporation was 10 January 2010. Akilapa andShogo are the only directors and shareholders of the company,

holding 10,000 shares each, which have a nominal value of N1 each

and are partly paid for to the extent of 50 Kobo per share. The

business is run from the company’s garage premises previously used

by Shogo, which he continues to insure in his own name.

On 1 January 2010, Akilapa ordered some motor parts from Megida

costing N1,000. He signed the contract with Megida, ‘For and on

behalf of Kosi-oshi Mechanics Ltd (in formation)’. Megida has not

received any payment for these parts.

The company has been financed mainly by a N25,000 loan from

Union Bank plc and this was personally guaranteed by Shogo. In

addition, Shogo’s sister, Aramide, invested in the company by taking

a thousand 6% non-voting preference shares of N2 each in the

company.

In May 2010, the company’s premises were destroyed by a fire.

Shogo made a claim on his insurance policy but the insurancecompany has refused to indemnify him, and Shogo does not

understand why. This has caused the company to go into insolvent

liquidation. The liquidator has discovered that Akilapa was a director

of another company called Sempe Mechanics Ltd, which went into

liquidation in 2009. Following the liquidation of this company

Akilapa was disqualified for a period of 3 years.

7/30/2019 BUL 501 - Company Law 1


7/30/2019 BUL 501 - Company Law 1


13

Clara have grave concerns about the future of the business but, at a

board meeting to discuss ceasing trading, Jinadu and Bello insist that

things will get better. The board resolves to continue trading.

Consider the implications for the board members of this decision.

9. Emeka and his wife Victoria are owed N25,000 by Bio Ltd. Bio Ltd

has refused to pay the money owed and Emeka and Victoria have

initiated a court action to recover the moneys owed to them. Maigida

Ltd is the parent company of Bio Ltd and has recently been advised

by its accountant that it could reduce its tax liability for the year 2011-

2012 by removing all the assets from Bio Ltd and closing it down.

Maigida Ltd has decided to follow that advice.

Discuss the implications of this decision for Emeka and Victoria.

10. The doctrine of legal personality is a settled law. However, there exist

some circumstances under which the doctrine can be by-passed.

Discuss, citing relevant statutory and judicial authorities.

11. The company is at law a different person altogether from the

subscribers and though it may be that after incorporation, the business

is precisely the same as it was before and the same persons are

mangers and the same hands receive profit. This notwithstanding,

there are cases in which the statute, and to some extent the court, can

forge a sledgehammer capable of cracking open the corporate entity.

With the aid of relevant legal authorities, critically examine the above

statement.

12. Dada has been dealing with Fujiro Ltd for many years but over the

past year he has consistently had problems getting paid for services he

has provided to Fujiro. Fujiro has always expressed satisfaction with

Dada’s work but Dada has recently received a letter from Fujiro

stating they would not be paying him the N180,000 they had agreed

for work already completed by Dada as they were unhappy with the

quality of work he provided. Dada has initiated legal proceedings toenforce his contract with Fujiro. Just before the dispute with Dada

occurred, Oniyo Ltd, the parent company of Fujiro Ltd, decided for

strategic group-related reasons to remove all the assets from Fujiro

Ltd and close it down. Oniyo Ltd intends to do this without making

any provision for the payment of N180,000 to Dada should he win his

case.

7/30/2019 BUL 501 - Company Law 1


14

Discuss whether the veil of incorporation could be lifted in these

circumstances.

Week 7

Topic: Liability of companies


Understand the nature and basis of liability of companies.

Know the situations where companies can incur criminal liability

under common law and the CAMA.

Assess the common law theories of corporate criminal liability.

Know the circumstances where companies can incur civil liability

under common law and CAMA.

Understand the rule in Royal British Bank v. Turquand and the

reasons for it abolition under CAMA.

Description: The topic will focus on the nature and basis of liability of

companies; the situations where companies can incur criminal liability under

common law and CAMA; the common law theories of corporate criminal

liability; the circumstances where companies can incur civil liability under

common law and CAMA; the rule in Royal British Bank v. Turquand and

the reasons for it abolition under CAMA.


Bolton (Engineering) Co. Ltd. v Graham and Sons (1957) 1 Q.B 159

Lennards Carrying Co. v Asiatic Petroleum Ltd (1915) A.C 705 @

713

Trenco (Nig.) Ltd. v. African Real Estate Ltd., (1978) 1 L.R.N. 146,

153.

Director of Public Prosecution v. Kent & Sussex Contractors Ltd. (1944) K.B. 551

Mandila & Karaberis Ltd v. Commissioner of Police (1958) W.N.L.R.

147.

Tesco Supermarkets Ltd. v. Natrass (1971) 2 All E.R. 127 (H. L.)

Ayodele James v. Midmotors (Nig.) Ltd, (1978) 11 & 12 S.C. 31.

Royal British Bank v. Turquand (1856) 6 E & B 327; 119 E.R. 886.

7/30/2019 BUL 501 - Company Law 1


15

Study questions:

1. The question of imposing criminal liability to a corporation for

criminal offences committed by directors, managers, officers and

other employees of the corporation while conducting corporate affairs

has gained a lot of importance in the jurisprudence of criminal law.

Discuss.

2. The majority of theories of corporate criminal liability are typical of

common law developments; they have been constructed on a case-by-

case basis. Despite their importance, these theories have proved to be

ineffective, for their lack of strong theoretical basis and their

individualistic roots. In the light of the foregoing critically examine

the various models/ theories that have helped shaped the concept of

corporate criminal liability over time.3. The very basis for the possibility of imposing criminal liability to a

corporation is its independent legal personality. Discuss.

4. Can a corporation as an artificial person be capable of committing a

crime and be criminally liable by the law or not?

5. ‘A corporation is an abstraction. It has no mind of its own any more

than it has a body of its own; its active and directing will must

consequently be sought in the person of somebody, who for some

purposes may be called an agent, but who is really the directing mind

and will of the corporation; the very ego and centre of the personality

of the corporation.’ - per Viscount Haldane L.C. in Lennard’s

Carrying Co Ltd v. Asiatic Petroleum Co Ltd [1915] AC 705

Stemming from the above, discuss the basis of the liability of a

company at common law and statute in crime, tort and contract.

6. Discuss the rule in Royal British Bank v. Turquand (1856) 6 E & B

327 and the reasons for the abolition vis a vis section 69 of CAMA.

Week 8

Topic: Tutorials, group discussions and Test

Objectives:

To do a review of all that has been taught in the previous weeks.

To take students through the study questions.

To examine the students on aspects of the course taught so far

7/30/2019 BUL 501 - Company Law 1


16

Week 9 & 10

Topic: Doctrine of Ultra Vires


Understand the basis of the doctrine of ultra vires as a consequence of

incorporation.

Know the purpose of the doctrine on the business activities of the

companies.

Know how the decisions of the courts have modified the doctrine over

time.

Know how businessmen/ promoters have always striven to evade the

doctrine.

Analyse the provisions of CAMA which codify the doctrine.

Description: The topic will focus on the basis of the doctrine of ultra vires

as a consequence of incorporation; the purpose of the doctrine on the

business activities of the companies; how businessmen/ promoters have

always striven to evade the doctrine; the provisions of CAMA which codify

the doctrine.


Ashbury Rly. Carriage & Iron Co. v. Richie (1875) L.R. 7 H.L. 653. Att. Gen v. Great Eastern Railway

Rolled Steel Products Ltd v. British Steel Corporation

Cotman v. Borougham

Bell Houses Ltd v. City Wall Properties Ltd

Parke v. Daily News Ltd

Study questions:

1. Explain the doctrine of ultra vires as enunciated in the Companies and

Allied Matters Act

2. What is the remedy open to a creditor of a company who engages in

ultra vires transaction?

3. Fatayi has been acting as managing director of Olosonfoods Ltd for

two years, although he has never been properly appointed a director of

the company. The company has an objects clause which states that the

company shall manufacture and sell Oloson products. Its articles of

7/30/2019 BUL 501 - Company Law 1


17

association state that the remuneration of any director shall be settled

by the company’s shareholders in general meeting, by ordinary

resolution.

Sales of the company’s products have declined in recent months and

Fatayi decides drastic action is needed. He agrees with Ultimate Pies

Plc to manufacture a range of non-Oloson pies for them. The contract

is initially for six months, but Fatayi expects to renew it when it

expires. It is also decided that Ogbonge, a non-executive director of

the company, should take on a full time position as a sales director, to

explore the opportunities for selling other, non-Oloson, products.

Fatayi decides the company will give Ogbonge a three year

employment contract, at N60,000 per year, which Ogbonge accepts.

Jegede, a minority shareholder in Olosonfoods, has just discovered the

foregoing. He seeks your advice whether either he, or the companyitself, might challenge the salary payable to Ogbonge, and the contract

with Ultimate Pies (including its renewal).

Advise Jegede.

4. In company law, an incorporated company has power only to carry

out the object stated in its Memorandum of Association or acts which

are reasonably incidental to the object. If an act is done or a

transaction is carried out which is not authorized by the memorandum

or statute, it is ultra vires the company and void, and cannot be

ratified by the company.

Discuss the validity of this statement vis-à-vis the changing face of

the doctrine of ultra vires. Support your answer with relevant

statutory and judicial authorities.

Week 11 & 12

Topic: Promotion and Pre- Incorporation


Know and understand the term ‘Promoter’ as defined by the courts

and CAMA.

Know the duties and liabilities of promoters under CAMA.

7/30/2019 BUL 501 - Company Law 1


18

Know the status of contracts entered into pre incorporation under

common law and statutes.

Description: The topic will focus on the term ‘Promoter’ as defined by the

courts and CAMA; the duties and liabilities of promoters under common lawand statute; the status of contracts entered into pre incorporation under

common law and statutes.


Twycross v. Grant (1877) 2 CPD 469

Adeniji v. Starcola, suit No. M. 135/70 unreported, H.C. Lagos.

Kelner v. Baxter , (1866) LR 2 CP 174

Newborne v. Sensolid (Great Britain) Ltd. [1954] 1. Q.B. 45

Study questions:

1. Whether someone is acting as promoter of a company is a question of

fact rather than a question of law. Comment on the validity of this

statement.

2. Because the Promoter is such an important person in the formation of

the company, the law places several responsibilities on him. These are

known as fiduciary duties. Highlight the fiduciary duties. What is the

position of the law regarding pre-incorporation contracts?

3. Discuss the status of pre incorporation contract under common law

and statutes.

4. Atiku and Mariam Aji are a married couple and partners in a business

that sells mobile phones. The business proves to be extremely

successful, and they open up a number of branches in Nigeria. In

order to limit their liability, they instruct their solicitor to incorporate

the business, calling the new company ‘Turaki Mobile Ltd’. Around

the same time, Nokia is about to release a new Nokia V series – theUltimate. Atiku and Mariam are keen to acquire as many of the

Ultimate brands as possible. Atiku hears of a potential source (Obj

Fone Ltd) and is offered fifty units of the Ultimate. Eager to purchase

the mobile phones, Atiku does not wait until the company is

incorporated and enters into a contract with IBBTech ‘for and on

behalf of Turaki Mobile Ltd. Mariam is also offered a number of

mobile phones and, prior to the company being incorporated, she

7/30/2019 BUL 501 - Company Law 1


19

enters into a contract with GEJ Phones Ltd for forty units of the

Ultimate.

She signs the contract ‘Turaki Mobile Ltd pp. Mariam Aji (a

director).’ The certificate of incorporation is issued and, at the first

board meeting of Turaki Mobile Ltd, Atiku and Mariam ratify both

contracts. Atiku and Mariam both have extensive stock of other

brands of mobile phones. Atiku sells to Turaki Mobile Ltd a number

of mobile phones brands that he acquired prior to engaging in the

company’s formation. Mariam also sells to the company a number of

mobile phones brands that she acquired whilst the company was being

formed. Shortly thereafter, Obj fone Ltd refuse to sell Atiku the fifty

mobile phones promised, as it believes that it can sell all the mobile

phones to the public for a higher price. Mariam is concerned that IBB

Phones Ltd will also refuse to sell the forty mobile phones promised.

A shareholder of Turaki Mobile Ltd, Buhari, discovers the above and

seeks your advice on the common law position and statute regarding

whether or not any breaches of the law have occurred.

Week 13 & 14

Topic: Tutorials, group discussions and Revision

Objectives:

To do a review of all that has been taught in the semester.

To take students through the study questions.

To examine the students on aspects of the course taught so far

Week 15

Topic: Examination

Objectives:

To examine the students on all that has been taught during the

semester.

Reading List:

Orojo J.O, Company Law and Practice in Nigeria (3rd

ed, Mbeyi &

Associates (Nig) Ltd, Lagos, 1992).

Ola C.S, Company Law in Nigeria (Heinemann Edu, Ibadan, 2002).

7/30/2019 BUL 501 - Company Law 1


20

Dada J. A, Principles of Nigerian Company Law (2nd

ed, WUSEN

Pub, 2001).

Morse G, Company Law (15th

ed, Sweet & Maxwell, Australia, 1996).

Pennington R.R, Company Law (7th

ed, Butterworths, London, 1995).

Sealy L.S, Cases and Materials in Company Law (3

rd

ed,Butterworths, London, 1985).

Gower L.C.B, Modern Company Law (2nd

ed, Stevens & sons Ltd,

London, 1954).

Companies and Allied Matters Act, Cap.C20, LFN 2004.

Susan Barber, Company Law (Old Bailey Press, 4th

Ed, 2004)

E.O. Akanki, Essays on Company Law (University of Lagos Press,

Akoka, Lagos, 1992)

M.O. Sofowora, Modern Nigerian Company Law (2nd

Edn, Soft

Associates, Lagos, Nigeria, 2002) Relevant reported cases on Company Law issues in Nigeria and other

jurisdictions.

Relevant journal articles and materials on Company law in Nigeria

and other jurisdictions.

Important statutes relevant to the operation of companies in Nigeriai.e.

o Nigerian Investment Promotion Commission Act 1995, LFN

2004;

o Investments and Securities Act 1999, LFN 2004;

o National Office for Technology Acquisition and Promotion Act

1992, LFN 2004;

o Immigration Act 1963, LFN 2004;

o Foreign Exchange (Monitoring and Miscellaneous Provisions)

Act 1995, LFN 2004.

Documents

BUL 501 - Company Law 1