TYPES OF COMPANIES REGISTRABLE WITH THE CORPORATE AFFAIRS COMMISSION OF NIGERIA

In our previous posts, we have talked about registration of companies with the Corporate Affairs Commission, and today we wish to talk about the different types of companies you can register in Nigeria.

This post holds a lot of details presented in a very concise manner, and we recommend you read this over and over again to be able to capture the information that lies in it. Better still, you can bookmark the page (for PC users) or save the page (for mobile users), so you can always have access to the post for further understanding.

Types Of Companies (Section 21 Of CAMA)

1. An incorporated company may be a company:

1.  LIMITED BY SHARES: ie having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them. OR


2. LIMITED BY GUARANTEE: ie having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.


3. UNLIMITED: ie not having any limit on the liability of its members.

A company of any of the aforementioned types may either be a PRIVATE COMPANY or a PUBLIC COMPANY.

PRIVATE COMPANY (Section 22 Of CAMA)

1. A private company is one which is stated in its memorandum to be a private company.


2. Every private company shall by its articles restrict the transfer of its shares.


3. The total number of members of a private company shall not exceed 50, not including persons who are bonafide in the employment of the company, or were while in that employment and have continued after the determination of that employment to be, members of the company.


4. Where two or more persons hold one or more shares in a company jointly, they shall be treated as a single member.


5. A private company shall not, unless authorized by law, invite the public to:

1. Subscribe for any shares or debentures of the company; OR


2. Deposit money for fixed periods or payable at call, whether or not bearing interest.

PUBLIC COMPANY (Section 24 Of CAMA)

Any company other than a private company shall be a public company and its memorandum shall state that it is a public company.

Further Information on companies....

Unlimited Company To Have Share Capital (Section 26 Of CAMA)

As from the commencement of the Company and Allied Matters Act (CAMA), an unlimited company shall be registered with a share capital; and where an existing unlimited company is not registered with a share capital, it shall, not later than the appointed day, alter its memorandum so that it becomes an unlimited company having a share capital not below the minimum share capital permitted under section 99 (Authorised minimum share capital.) of Company and Allied Matters Act (CAMA) .

Company Limited By Guarantee

1. Where a company is to be formed for promoting commerce, art, science, religion, sports, culture, education, research, charity or other similar objects, and the income and property of the company are to be applied solely towards the promotion of its objects and no portion thereof is to be paid or transferred directly or indirectly to the members of the company except as permitted by the Company and Allied Matters Act (CAMA), the company shall not be registered as a company limited by shares, but may be registered as a company limited by guarantee.


2. As from the commencement of the Company and Allied Matters Act (CAMA), a company limited by guarantee shall not be registered with a share capital and every existing company limited by guarantee and having a share capital shall, not later than the appointed day, alter its memorandum so that it becomes a company limited by guarantee and not having a share capital.


3. In the case of a company limited by guarantee, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member or purporting to divide the company's undertaking into shares or interests shall be void.


4. A company limited by guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits for distribution to members.


5. The memorandum of a company limited by guarantee shall not be registered without the authority of the Attorney‐General of the Federation.


6. If any company limited by guarantee carries on business for the purpose of distributing profits, all officers and members thereof who are cognisant of the fact that it is so carrying on business shall be jointly and severally liable for the payment and discharge of all the debts and liabilities of the company incurred in carrying on such business, and the company and every such officer and member shall be liable to a fine not exceeding N100 for every day during which it carries on such business.


7. The total liability of the members of a company limited by guarantee to contribute to the assets of the
   company in the event of its being wound up shall not at any time be less than N10,000.


8. the articles of association of a company limited by guarantee may provide that members can retire or be excluded from membership of the company.


9. If, in breach of subsection (6) section 26 of the Company and Allied Matters Act (CAMA), also item No 6 in this list , the total liability of the members of any company limited by guarantee shall at any time be less than N10,000, every director and member of the company who is cognizant of the breach shall be liable to a fine of N50 for every day during which the default continues.


10. If, upon the winding up of a company limited by guarantee, there remains after the discharge of all its debts and liabilities any property of the company, the same shall not be distributed among the members but shall be transferred to some other company limited by guarantee having objects similar to the objects of the company or applied to some charitable object and such other company or charity shall be determined by the members prior to the dissolution of the company.

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