Concise Summary: Under Companies and Allied Matters (CAMA) 2020, the Federal Attorney-General must authorize the incorporation of any company limited by guarantee before the CAC (Corporate Affairs Commission) may register it. If there is no Federal Attorney-General, CAMA 2020 seems to enable CAC to request the promoters of any such companies to advertise the registration in two national newspapers. If there is no objection from the public, the CAC registers the Company after 28 days’ notice.
Background
Following the yet-to-be-appointed Ministers of the Federal Republic of Nigeria that include the Attorney-General of the Federation (the “AGF”), the CAC may only register a company limited by guarantee once the Federal Attorney-General is validly appointed or invoke an implied procedure.
The AGF’s constitutional and statutory roles are unique and irreplaceable. S.150 of the 1999 Constitution of the Federal Republic of Nigeria (As Amended) established the AGF as the chief law officer of the federation and a minister of the federal government.
The AGF must be a Nigerian lawyer called to the Nigeria Bar of at least ten years post-call standing. Under the Constitution, the AGF enjoys the right to prosecute offences and to discontinue any criminal trial in Nigeria, in addition to any other statutory duties.
One such statutory duty of the AGF is its approval of the incorporation of companies limited by guarantee – an automated process in the CAC’s company registration portal (CRP). We admit that the Ministry of Justice can perform the duties of the AGF after an AGF is appointed and not before.
What is a Company Limited by Guarantee?
S.21 of CAMA 2020 provides that an incorporated company may have the liability of its members limited by the memorandum of association to such amount as the members may respectively agree to contribute to the Company’s assets during winding up. Such companies are a “company limited by guarantee”.
A company limited by guarantee is a non-profit sharing company. Its non-profit sharing status means it can do business, make profits but cannot distribute its profits to its members.
Unlike an incorporated trust (trustee) which is a non-profit making, a company limited by guarantee makes a profit but cannot distribute its profits to its members. It is a crime for an incorporated trust to do business with CAC’s approval.
A company limited by guarantee like an incorporated trust, promotes commerce, art, science, religion, sports, culture, education, research, charity or other similar objects.
A company limited by guarantee uses its income to promote its objectives. It can not distribute its revenue directly or indirectly to its members.
AGF’s Statutory Roles in the Registration of Company Limited by Guarantee
The AGF’s authority is required before CAC registers a company limited by guarantee. Once the promoters have submitted their application for registration – by themselves or through their agent – and if the AGF does not object, the AGF authorizes the registration within 30 days.
CAMA 2020 permits the AGF to request clarifications or additional information from the promoters through the CAC. The 30 days period begins after the AGF receive all relevant information.
What CAC may do where the AGF does not exist?
If promoters have submitted all valid documents for registering a company limited by guarantee and the AGF has not decided within 30 days, the following will apply:
- CAC may request the promoters to advertise the incorporation in three national daily newspapers.
- invite objections, if any, to the incorporation of the Company.
- A notice asking the CAC not to register a company limited by guarantee must reach CAC within 28 days of the last newspaper.
Where there is an objection to the incorporation of the Company limited by guarantee, the CAC will consider the objection and may require the promoters to clarify or provide additional data or CAC upholds or rejects the complaints.
Suppose CAC rejects the objection or where it did not receive a complaint. In that case, the CAC registers the Company and issues a certificate of incorporation.
CAC should invoke the preceding procedure where the AGF has yet to be appointed. Indeed, all governments must prioritize the AGF’s appointment as much as that of a chief of state and the government’s secretary.
Unless the government is not concerned about the rule of law, where there is no chief legal officer, Justice may be perverted or denied. Absence of rule of law diminishes accountability.
The centrality of the AGF
Given the relationship between Justice and economic development or integration, the AGF in a growing economy is not just a political officeholder but a statesman who ensures the rule of law.
We urge the Nigerian federal and state governments to treat the appointment of the AGF or AG with similar priority as the appointment of the SGF or the SSG (secretary to the Government of the Federation or the Secretary to the State Government) and the chief of staff.
Admittedly, the costs of requesting the National or State Assembly’s approval for the AGF or AG’s appointment may be high but worthwhile – for our young society.
The rule of law increases citizens’ and investors’ confidence and trust in the Nigerian system — a crucial index of good public governance and the global ranking of the judiciary.
Conclusion
The AGF serves the government by ensuring the administration of Justice, legality of legislations and policies, initiating law reforms and policy direction, protection of public interest, and legal adviser to governments, ministries, agencies and departments.
Given the rising cost of doing business, the CAC should allow only the promoters of companies limited by guarantee that chooses to advertise the registration or hold it off until the AGF is appointed.
All stakeholders should urge the Federal and State Governments to prioritize the appointment of the Minister or Commissioner of Justice to demonstrate commitment to the rule of law – a crucial element of peace and development.
