Definition of Company.

In this case, the court described a company as a creation of law convenient for the purposes of management, of the holding of property, of the association of individuals in business transactions. For that corporate identity, the business association must be registered/incorporated.

When the word "company" is used in strict legal sense, it normally connotes an association of persons who come together for the purpose of pursuing economic activities, that is, for the purposes of carrying on business activities, mostly for purpose of profit-making. It is true that there are those who come together, united in purpose for carrying on activities, not for profit but rather for other socio-, cultural, scientific, conservation, etc. purpose other than for profit.

The court stated in this case that a company is a creation of law convenient for the purposes of management, of the holding of property, of the association of individuals in business transactions. The artificial legal person called the corporation has no physical existence. It exists only in contemplation of the law. It has neither body, parts, nor passions. It can be neither friend nor enemy. Apart from its incorporators, it can have neither thoughts, wishes, nor intentions, for it has no mind other than the minds of the incorporators.

In this case, the court held that a company is at law a different person from the subscribers of the memorandum and that although it may be that after incorporation, the business is precisely the same as it was before and the same persons are managers and the same hands receives the profit, the company is not in law the agent of the subscribers or trustees for them nor are the subscribers as members liable in any shape or form except to the extent and in the manner provided by the law.

In law, when the registrar of companies issues a certificate of registration to a company, that company is said to be a registered company. It acquires the attributes of legal entity and this confers on it the capacity to sue and be sued in its own name. It is competent to enter into contracts and business activities as provided in its memorandum of association and above all, it is distinct and separate from its members.

It was the decision of the court in this case that though the tort of an employee of a corporation committed in the course of his employment will render the corporation responsible, a similar act done not by an employee or agent but by the corporators themselves will not necessarily render the corporation liable. For on the one hand, the sum of the individual corporators, even when acting in the matter within corporate powers, is not identical with the corporation itself, nor, on the other hand, do they stand to the corporation in the same relation as an ordinary agent stands to his principal.

It was the decision of the court that unlike an incorporated company, a sole proprietorship does not enjoy perpetual succession. Upon the death of the sole proprietor who uses a business name, no action against the business will succeed.

The court considered the consequence of incorporation in this case. The court held that from the date of incorporation of a company stated in the certificate of incorporation, the subscribers of the memorandum together with other persons who may become members of the company, become a body corporate by the name contained in the memorandum capable forthwith of exercising all the powers and functions of an incorporated company including the power to acquire and hold land, have perpetual succession and a common seal, but with such liability on the part of the members to contribute to the asset of the company in the event of its being wound-up.

.The decision of the court in the case was to the effect that an incorporated association is a legal entity from its directors or management, having a separate and distinct life and existence, vested with a legal personality by which it can sue or be sued.

Where by the Act, the power to create a corporate body is vested in the Governor and his power is exercised in consideration of a certain set of rules which produces for the replacement of members thereof, it would be improper for the court without power given to it in the Act to order the removal of members from such body.

A corporate body has an obligation to comply with the law just like any juristic person. If by mistake, negligence or fraud, an association amends the certificate of incorporation of an incorporated Trustee without the members first complying with the Companies and Allied Matters Act or the provisions of its constitution, the court will assume jurisdiction to set the certificate aside. It is only when the authority is exercised in accord with a corporate body's rules that the jurisdiction of the court can be said to be at an end.

The court stated in the case that if the Parliament confers certain rights and powers on an unincorporated body and it becomes clear that in the exercise of such rights and powers, injuries may be done to third parties, then it is implied that as parliament could not have intended that injuries be inflicted upon citizens without reparation, such body must have a capacity at law to sue or be sued for injuries caused to others in the exercise of the powers conferred.

The court in this case stated that an incorporated association could sue and be sued and similarly, that an action can be instituted on its behalf in a representative capacity, particularly where it is established that it shares the same interest in the cause of action as the person suing on its behalf. In the case, the trustees took out a writ and added "for themselves and on behalf of the trustees of Oromilade Missionary Society" The court held the above to be in order.

The court held that although a corporation and an individual or individuals may be the only entity to sue and be sued, an association of individuals which is neither a corporation, partnership nor an individual has the capacity to own property and act by agents, and such capacity in the absence of express enactment to the contrary involves the necessary correlative liability to the extent of such property for the acts and defaults of such agents.

In this case, the court considered whether an incorporated body, the Local Government Service Board can be sued. The court in a considered decision held that a statutory body with functions like those of the Local Government Service Board is liable to be sued for a declaration since the statutory provisions relating to its functions are such that injustice might result if the Board cannot be made a defendant to any kind of proceedings.

In this case, the court held that if the Legislature has created a thing which can own property, employ servants, and which can inflict injury, then it must be taken, to have impliedly given the power to make it suable in a court of law for injuries purposely done by its authority and procurement. The court went further to state that an unincorporated body which is empowered by the Legislature to do certain things which can result in injury to others must be taken to have impliedly the power to sue and be sued in a court of law.

The court held that where an irregularity has been committed or where any wrong has been done to the company, only the company can sue to remedy or rectify the irregular conduct.

The court held that where an irregularity has been committed or where any wrong has been done to the company, only the company can sue to remedy or rectify the irregular conduct.

The court held that where an irregularity has been committed or where any wrong has been done to the company, only the company can sue to remedy or rectify the irregular conduct.

The court held that where an irregularity has been committed or where any wrong has been done to a trade union, only the trade union can sue to remedy or rectify the irregular conduct.

The court held that where an irregularity has been committed or where any wrong has been done to an unincorporated association, only the association can sue to remedy or rectify the irregular conduct.

The principal or company should sue for a breach of contract not its agent no matter how incensed the latter is. A disclosed principal is entitled to sue or be sued in respect of any money paid on his behalf by his agent. If an agent brings an action, he should disclose the capacity in which he is doing so.

There is no doubt that the direct remedy of a creditor is solely against an incorporated company. A creditor has no dealing with any individual shareholder, and if he is driven to bring an action to enforce any right he may have acquired, he must sue the company, and not any of the members of whom it is composed.

Directors can only be sued for breach of fiduciary duties but not wrongful investment of the funds in the case of a limited liability company incorporated to manage trust funds. This is because as it is the company as a corporate entity that constitutes trustees of the fund. Directors of a company are not individually trustees of the fund but directors of the company which constitutes the fund.

Legal Personality of a Company.

The court stated in this case that where a company is registered under the Companies and Allied Matters Act or any other previous Act, it continues to retain its status of a legal entity distinct from its members.

The court held it of supreme importance that distinction should be clearly marked, observed and maintained between an incorporate company's legal entity and actions, assets, rights and liabilities on the one hand, and the individual shareholders and their actions, assets, rights and liabilities on the other hand.

In this case, the personality of a company was considered by the court. The court stated, each company in a group is a separate entity and the directors of a particular company are not entitled to sacrifice the interest of the company.

The court stated in this case that it is well settled that a company is not the same as any of the persons who form or own the said company. A party cannot therefore sue a director of the company for breach of a contract entered into with the company

The court held that a company is independent and a separate personality distinct from its members, affiliates, parent company and subsidiaries.

The court held that a company is nevertheless a separate entity from the person who formed it, who as beneficial owner of the shares was also the governing director. The court further held that as governing director, the person could on behalf of the company, give orders to himself as servant of the company.

The court held that a corporation differs from an individual in that a corporation depends for its functions and existence on the laws of the country under which is incorporated, not part thereof.

Sometimes, there may be a presumption of incorporation. Thus, a bank of established status has a presumption of incorporation in its favor. This is because of the presumption that under Nigerian law, a bank cannot do business without having been incorporated. The court held in this case that a defendant who intends to dispute the incorporation of a company must do so at the stage of pleadings when issues are joined

It goes without saying that each corporate entity is distinct and a parent body, incorporated company or statutory body, cannot benefit from the assets of its subsidiary and vice versa. In the case, the court stated that subsidiary companies are, in the eyes of the law distinct personalities from the parent company; and ought not to be joined in suits as parties.

The court stated in the case that a holding company and its subsidiaries are each a distinct and separate legal person. Each having its own assets and property, separately. The court further stated that for the purposes of ascertaining the financial viability of a holding company, recourse cannot be had to the assets of its subsidiaries.

The court stated in this case that generally, the act of the subsidiary company cannot be imputed to the parent company nor can the act of the parent company be imputed to the subsidiary company.

It goes without saying that a subsidiary is different from its parent company and that it has to be sued in its name and not that of any other.

The court held in this case that by the ordinary rule of law, a parent company and a subsidiary company, even one hundred percent subsidiary company are separate legal entities.

The court held that the concurrence of a holding company is a sine qua non to the acquisition of shares in its subsidiary and a holding company is no more than a controlling shareholder in its subsidiary.

The court held that the concurrence of a holding company is a sine qua non to the acquisition of shares in its subsidiary and a holding company is no more than a controlling shareholder in its subsidiary.

The court decried the act of a company which sought to avoid its corporate liability by claiming to be an agent of another company. The court observed in this case that the device of agency by using one incorporated company for the purpose of carrying on an assignment for another company or person must not overlook the fact that an incorporated company is a separate legal entity which must fulfil its own obligations under the law.

The court in the case held that the legal personality of a corporate body can only be established as a matter of law by the production in evidence of the certificate of incorporation. Where however, by the state of pleading, the legal personality of a corporate body is not in issue, there will be no need to prove the status and legal personality of a corporate body.

The court held in this case that the best evidence of incorporation of a company is the production of the certificate of incorporation by the company and where this is not done, it is fatal to the case.

The court stated in this case that 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 purpose may be called an agent but who really is the directing mind and will of the corporation, the very ego and center of the personality of the corporation.

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 purpose may be called an agent but who really is the directing mind and will of the corporation, the very ego and center of the personality of the corporation.

The court stated in this case that a company in many ways may be likened to the human body. It has a brain and nerve center which control what it does. It also has hands which holds the tools and act in accordance with directions from the center. Some of the people in the company are mere servants and agents who are nothing more than hands to the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does.

The court held that in cases where the law requires the personal acts or faults of an individual so as to make a legal fiction like a company to be liable, the directors, manager or the managing director are, in the eyes of the law, the directing mind and the will of the company, they control what the company does; the state of mind of this special class of employees is the state of mind of the company.

The court re-emphasized the fact that the law draws a clear distinction between the company as the artificial person and the natural person with life and limb who operates it. While the acts of individual can be taken as the acts of the company in appropriate cases where the director represents the directing mind and will of the company and can be regarded as the alter ego of the company rendering the company liable for his acts, it will be absurd and a dangerous to make the individual criminally liable for the acts apparently done for or by the company without the express provisions of the statue rendering them so liable.

Liability of a Company for Income Tax.

In the case, the appellant sought to avoid its corporate liability by claiming to be an agent of another company, the court in its rejection of the argument stated that as an incorporated entity, a company must be regarded as a separate body carrying on business and therefore liable to income tax.

Power of Directors over a Company.

The general meeting is the supreme legislative authority of a company, however, the directors are, subject to the articles, vested with the power of managing the company on behalf of the shareholders. The directors as was held by the court in this case, are not mere agents of the company to carry out its wishes as was formerly thought.

Directors were held not to be mere agents of the company in this case. The court held directors as being entitled to manage the company in accordance with the power vested in them.

Power of the General Meeting to Exercise the Power of Directors.

The general meeting may, in exceptional circumstances, for the overall interest of the effective operation of a company exercise the power which the board of directors should exercise but fail to do so. In the case, the directors were unwilling to appoint additional directors under the power conferred on them by the articles, the court held that the company at general meeting had the power to make the appointment. The court stated, if directors having certain powers are unable or unwilling to exercise them, there must be some power in the company to do itself that which under other circumstances would be otherwise done.

The general meeting may, in exceptional circumstances, for the overall interest of the effective operation of a company exercise the power which the board of directors should exercise but fail to do so. The court held in this case that the appointment of one of the directors as a managing director was valid as it was not possible for the appointment to be made by the board of directors being that two of the three directors making up the board of directors wished to be managing director of the company but were however barred by the articles from voting on their own appointment, thus no effective majority of the board's votes could be obtained to appoint anyone managing director.

Legal Representation of a Company.

The court held that a company is entitled to sue and is liable to be sued in its own name. A corporation limited liability company which is not a natural person, the right of audience is necessarily limited to a legal practitioner briefed on the corporation's behalf. The court went further to state that it is no reason that the company is impecunious or in financial straits for allowing a layman director or official of the company to make legal representation on its behalf.

A company is entitled to sue and is liable to be sued in its own name. It appears by a legal practitioner who could, in a criminal proceeding, enter a plea on behalf of the company

The court held that a company is entitled to sue and is liable to be sued in its own name. A company can be represented by its secretary or other officer.

The court stated that a solicitor to a company is competent to institute an action in the name of the company, without first being formally authorized to do so by the company, if it appears to him that the company's interest, property or rights are in jeopardy.

Where a solicitor files a writ in the name of a juristic person, there is the basic presumption that he has the authority of that person to institute it, the onus is on the person asserting the contrary to rebut it.

A company which is incorporated has the power to sue and be sued. The court held in this case that, when suing, a company brings an action in his own corporate name.

Authorization to Sue.

The court stated in this case that it is not sufficient to sue an officer of a company on behalf of a company unless there is an authorization by the company allowing the said person to defend on its behalf

The court held that it is not sufficient to sue an officer of a company on the company's behalf unless the company has authorized the officer to defend.

The court held that an officer of a company does not have the power or authority to authorize the institution of legal proceedings in the name of the company without the required authority or resolution of the Board of Directors or of the shareholders

The court reviewed the right and power to bring action in the name of the company and stated that;

a. The only way by which it can be ascertained whether the company is the proper plaintiff is through the resolution of the Board of Directors or of the members.

b. If a company brings an action in the name of the company without being so authorized, the defendant may apply to have the suit struck out or dismissed.

c. The power of the Board of Directors to sue in the name of the company is exclusive to them. Therefore, the directors cannot act individually, but must act collectively as a board.

d. A solicitor requires the resolution of the company before he can institute an action on its behalf. Accordingly, a solicitor who commences proceedings in the name of a company without proper authorization does so at his own risk. The lack of authority is sufficient defense to the action, and the solicitor may be personally liable for the costs of the proceedings

Security for Costs.

A limited company, whether suing solely or jointly, may be ordered to give security for costs at the discretion of the court and where the company is suing jointly, the fact that the co-plaintiff is a natural person who would not normally be ordered to give security for costs does not deprive the court of the power to order the company to give security for costs, but instead, is simply a matter to be taken into account by the court in exercising its discretion.

The court held that it is only a juristic person that can sue or be sued. Where it is proved that the party before the court is not a juristic person, the case will be struck out.

Proof of Juristic Status.

The court in this case held that it is only a juristic person that can sue or be sued. When the juristic status of a person is put in issue, the plaintiff must establish that it is a legal person

The court held that the onus is a party who claims juristic personality to prove that status by producing evidence of incorporation, this, it can do by producing a certificate of incorporation.

Business Names.

A business name has no legal personality. It is, however, generally to prevent injustice, that an unincorporated body is endowed with the capacity to sue and be sued eo nomine.

The court will interfere to prevent the use of deceptive business names as it will to prevent the use of deceptive trademarks. Proof of intention to deceive is not essential, it is enough that the false representation has in fact been made, whether fraudulently or otherwise, and damages may probably ensue.

The law does not impose on a plaintiff to prove that the defendant is fraudulent. Fraud requires that the plaintiff satisfies the court that the defendant knew of the existence of the plaintiff's business name and intentionally set out to use it with the object of ruining the business.

in this case, the court stated thus; that the fact that a Nigerian company has a wholly-owned subsidiary in a foreign country does not make the parent company amenable to the jurisdiction of that foreign country, and if in spite of this, the foreign court gives a default judgment against the Nigerian company, the Nigerian courts will refuse to enforce the judgment

Lifting the Veil of Incorporation.

Where the court finds fraud or improper conduct, it will lift the veil in the interest of justice. In the case, a former director of the plaintiff company had bound himself by a restraint of covenant clause not to solicit. It was held by the court that he cannot escape the obligations of then covenant by hiding under the cloak the company to commit the breach.

In the case, the court stated; the consequence of recognizing the separate personality of a company is to draw a veil of incorporation over the company. Since a limited liability company exists in the eye of the law, it can only be operated by means of human beings. It is settled law that the directors or the managers are those whose decisions can be attributed to the legal fiction. However, there is nothing sacrosanct about the veil of incorporation. The decision in Salomon v. Salomon & Co. Ltd. (1897) AC 22 must not blind one to the essential facts of dependency. Thus, if it discovered from the material before the court, that a company is the creature of a biological person, be it a managing director, and it is a device or sham-mask by the eye of equity, the court must be ready and willing to open the veil of incorporation to see the character behind it, if justice must be seen to be done.

In the case, the court held that the veil of incorporation could be lifted in order to find the reality behind the corporate personality when the company did not have an established place of business in Nigeria.

If a company is formed for an unlawful purpose, or in order achieve an object not permitted by the law, the appropriate remedy is to set aside the certificate of incorporation, or to treat the company as a nullity, or, if a person in the company has committed a fraud or misdemeanor, he may be proceeded against civilly or criminally. See Salomon v. Salomon & Co. Ltd. (1897)

The court will lift the veil of incorporation of any company to find out who is behind a fraudulent and improper conduct. This would be necessary where the canopy of legal entity is used to defeat public convenience, justify wrong, perpetuate and protect fraud and crime.

The court held that the veil of incorporation may be pierced to discover the realities of a situation. As in this case, where a group of companies is virtually a partnership or where one of the companies is a trustee of the other in respect of a property in issue

In this case, an English company claimed certain tax advantages by virtue of being a British film company. The court held that the veil of incorporation must be lifted to discover who the controllers of the company are. The court held that they were not essentially English as the company, though registered in England was controlled by an American Holding Company and so could not claim the tax advantages

The court held that while a company which is duly incorporated cannot be disregarded on the ground that it is a sham, it may be established by evidence that in its operation, it does not act on its own behalf as an independent trading unit, but simply for and on behalf of the people whom it has been called into existence.

Every company is required to have its name mentioned in legible characters, inter alia, in all bills of exchange, promissory notes, endorsements and cheques. If any officer of a company, or any person on its behalf, issues or authorizes the issue of any bill of exchange, promissory note, endorsement, cheque or order for money or goods without the name of the company being so mentioned, he will be liable to the holder of any such bill of exchange and so forth for the amount thereof, unless it is duly paid by the company. An omission of an essential part of the name of a company will be a contravention.

Thus, in this case, there was an omission of the word "Limited" which was part of the name of the company, the court held that an omission of the essential part of the name of the company made the company liable.

The court held that where an officer or a company signed a bill of exchange in which the company was described by a trade name, and the drawee and signatory were different, the circumstances were such that the signatory could be held to have signed on behalf of the drawee and was therefore liable

A company and its successors are bound by the acts of those who made accepted or endorsed a bill of exchange or promissory note in its name or on its behalf or account. The signature by a director or the secretary on behalf of the company is a signature by procreation for the purpose of Section 25 of the Bill of Exchange Act.

Abbreviation of Company Names.

The word "name" as used in Section 29, CAMA, means the registered corporate name. The court held in this case that well-known abbreviations of names of companies, for example "Co" for "Company" are accepted. See section 29(5) CAMA.

Name of a Company

The court stated that the name sought to be registered by a promoter as the name of the company to be incorporated must not be one that is already registered under the Companies and Allied Matters Act or as a trademark, or calculated to mislead, or one which is not approved by the Commission.

A company is not to be registered with a name which is identical to that of another company in existence, or so nearly resembles that name as to be calculated to deceive. In the case, the court stated that a name might not be deceiving; it is however the possibility that it may do so that is relevant.

The court in this case considered business names which are prohibited according to Section 30(1) CAMA. The court held that the provision is prohibitory and mandatory and not merely discretionary.

Change of Company Name.

The court held that when a company changes its name, if the company carries on business under the new name before the certificate is issued, the director authorizing the carrying on of business under the new name will be personally liable for obligations incurred, because the change of name becomes effective when a new certificate is issued, before then, there is no company in existence with the new name.

Until the Corporate Affairs Commission issues a fresh certificate of incorporation to an association seeking to change its name, there is no change of name. A new name remains unregistered where no new certificate in the new name is issued by the Corporate Affairs Commission in place of a subsisting certificate.

The mere fact that an unregistered association chooses to go by a name suggestive that it is a registered one, does not in law amount to registration of that association nor confer on it the status of a corporate body.

Liability of Shareholders Where Company is used as Agent

The court held that where the shareholders of a company use the company as an agent, they will be liable for the debts of the company. It is however a question of fact whether an agency exists or whether a subsidiary is carrying on the business of its parent company or its own.

In this case, the court stated that if a company is formed for the express purpose of doing a wrongful or unlawful act, or, if when formed, those in control expressly direct a wrongful thing to be done, the individuals as well as the company are responsible to those to whom liability is legally owed. In such a case, or where the company is the mere agent of a controlling comparator, it may be said that the company is a sham, cloak or alter ego; otherwise it should not be so termed. The court further held that a person, who being a director of a company, is accountable as a fiduciary, cannot escape liability by incorporating or acting through another company which is his alter ego as facade for receiving profits which would have been rightly due to the company of which he is a director

In the case, the court held that where a company is formed for the express purpose of doing a wrongful or unlawful act, the individuals responsible, as well as the company, are responsible to those to whom liability is legally owed. Whether an individual has constituted the company his agent is a question of facts in each case.

Ownership of a Company

The court held in the case that having a controlling number of shares in a company is not synonymous with its ownership once the company is incorporated as an entity of its own and having its own separate legal existence.

The Seal of a Company.

The court held that where a company executes a deed, the seal affixed to the document must bear the name of the company.

Signature by Procreation.

The court held that a signature by a director or the secretary on behalf of the company is a signature by procreation for the purpose of Section 25 of the Bill of Exchange Act.

A Company and Pre-Incorporation Contracts

At common law, a pre-incorporation contract was not binding on a company because there was no principal on behalf of whom an agent could have contracted. The court held in this case that the company could not ratify or adopt a pre-incorporation contract.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

In this case, it held that the company was not bound to pay for the services and expenses of the solicitor as it was not in existence at the time expenses were incurred and ratification was impossible. A pre-incorporation contract is not binding on a company and ratification after the company was incorporated was not possible.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

The court held that if a person, contracts ostensibly as agent for a non-existent principal, he can be held to be personally liable. A company is not liable for a pre-incorporation contract. Individuals who entered into the contract are personally liable.

The court held that a company is not bound by a pre-incorporation contract as there is no principal on behalf of whom an agent can contract when a company has not yet been incorporated. The company was not also permitted to ratify or adopt the contract.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

The court held that a company could not after incorporation enforce a pre-incorporation contract, nor sue for damages for breach of contract.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

The court held that where the intention in a pre-incorporation contract is that the company should be liable, the contract would be nullity.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

The court held that a company cannot ratify or adopt an agreement or contract entered into before its incorporation and where the intention was that the company should be liable on the contract, the contract would be a nullity.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

The court held that a pre-incorporation contract cannot be ratified or adopted by a company after its incorporation even where parties to the agreement were members of the company. In this case, the parties to the pre-incorporation agreement became the only directors and shareholders of the new company.

However, this is no longer the position. The position has been altered by statute. See Section 96(1) CAMA.

In this case, the court held that any contract or transaction purporting to be entered into by the company prior to its formation or by any person on behalf of the company prior to its formation may be ratified by the company after its formation and thereupon the company may be bound by, and entitled to benefit from it, as if it had been in existence at the date of such contract or other transaction and had been a party to it.

This decision was an abdication of the common law rule that a pre-incorporation contract was not binding on a company because there was no principal on behalf of whom an agent could have contracted. The position was a source of considerable inconvenience for the promotion of business. The position has been altered by statute as well. See Section 96(1) CAMA.

The court held that prior to ratification of a pre-incorporation contract by a company, the person who purports to act in the name or on behalf of a company is, in the absence of express agreement to the contrary, personally bound by the contract or other transaction and entitled to the benefit of it.

Domicile of a Company.

The court held that the place where the registered office of a company is situated is its domicile. Unlike the domicile of an individual, the domicile of a company remains the same throughout its life.

Under the English Legal system which is followed in Nigeria, the law of the country in which a company is incorporated determines its nationality. The legal test in Nigerian is the domicile rather than the nationality of a company. A company is resident in the place where it is conducting its business or a material part of it or the place where its central management and control are to be found.

It cannot be said that because the controlling shareholder or managing director of a company is an indigene of a particular state, the company takes that state as its state of origin.

The court held that an incorporated company does not have a hometown or tribe as a natural person does. A company has no state of origin. A company's place of origin is not its registered office as the registered office may be changed from time to time.

Where a company contracts under its common seal, the seal is to be affixed in accordance with the formalities laid down in the company's articles. It is usual for the articles to provide that the document on which the seal is affixed must be signed by a director, and countersigned by the secretary or a second director or by some other person appointed by the directors for that purpose.

Authorization to Contract On Behalf Of a Company.

In this case, the court stated that it is an elementary rule of the law of contract that an agreement entered into by a member of a corporation aggregate who is not duly authorized by the corporation, or by a stranger to the corporation is not binding on the corporation.

The classes of persons entitled to complain about the management of the affairs of a limited company are very restricted. Debenture holders are entitled to petition the court to appoint a receiver to protect their interest if the company is in jeopardy. A shareholder may apply for the appointment of a receiver if there is no properly constituted body, or there are dissensions in the governing body, that is impossible to carry on the business with advantage to the persons interested. The court will interfere, but only for a limited period and to the smallest extent possible.

The court is reluctant to intervene at the behest of a shareholder; a fortiori in respect of a person who is potentially a shareholder and a minor.

Date of Incorporation.

The court stated in this case that the certificate of incorporation issued under the seal of the Corporate Affairs Commission must be dated and the date on which the Registrar-General actually signed the certificate is stated as the date of incorporation. However, if the certificate states an earlier date of incorporation, that date and not the date of the signature is decisive.

The Phrase "Carrying On Business."

A foreign company having the intention of carrying on business in Nigeria must take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose.

The court stated in this case that the phrase "carrying on business" means to conduct, prosecute or continue a particular vocation or business as a continuous operation or permanent occupation. The repetition of acts may be sufficient.

The court in this case quoted with approval, what was held in the case of Ritz Pumperfabrik GMBH & Co. v. Techno Continental Engineers & Anor, as the meaning of the phrase "carrying on business." The court stated that the phrase means, to conduct, prosecute or continue a particular vocation or business as a continuous operation or permanent occupation. The repetition of acts may be sufficient.

The court held that the expression "carrying on" implies a repetition of acts and excludes the case of an association formed for doing a particular act which is never to be repeated.

Power of a Foreign Company to Sue and be sued in Nigerian Courts

A foreign corporation duly created according to the laws of a foreign country recognized by the state may sue and be sued in its corporate name in Nigerian courts unless it is shown that such a foreign corporation is voluntarily resident in an enemy controlled territory, or that the foreign corporation is controlled by enemies.

In bringing an action, a foreign company must allege in its statement of claim that it is incorporated according to the law of the foreign state and this is fact that must be proved unless admitted.

The court in stating the principle that a foreign company may sue and be sued in Nigeria stated that it is not every corporate body that comes before the court that must be registered under Nigerian law. It is a principle of common law which is accepted in Nigeria that a corporation in another country may sue or be sued in Nigerian courts.

English law recognizes the existence of a corporation established by foreign law in virtue of the fact of their creation and continuance under and by that law and will allow it to sue and be sued in its corporate capacity. Such recognition is said to be by the comity of nations.

A Company Survives the Death of Directors

The first defendant company undertook to fund the plaintiff's business. When the company defaulted and was sued for breach of contract, it pleaded that it was discharged from the contract as it became impossible of performance upon the death of one of its directors. The court held that a company survives the death of its director.

The death of a company's managing director does not implicate the demise of a company or a contract it executes.

Liability of a Company

An artificial person or company is vested with legal or juristic personality lacks the natural or physical capacity to function as a human being. It is those work in it that do all things for and on behalf of the company. It is therefore the law and tradition for a human being to be authorized to negotiate and execute agreements for and on behalf of the company. The court held that where an agreement is so executed by a person in authority, the company is liable or deemed to be liable for the act or acts of that person.

It is not enough for a plaintiff to allege that a defendant has falsely and maliciously published a defamatory matter concerning himself. The plaintiff ought to have given evidence showing that such publication was made in bad faith and with express or actual malice or malice in fact. Once a plea of privilege is raised, the inference of malice is rebutted and that places the burden on the plaintiff of showing and proving express malice against the defendant.

The court held that a company is not liable to damages merely because its disclaimer is adjudged defamatory. It may rely on the defense of privilege. A person who in good faith publishes a statement which turns out to be false is at liberty to plead the defense of privilege.

An employer may choose to disclose the information on a moral or social duty to the society. What is moral or social depends on what the people would consider as their duty to do and the failure to do which they consider to be wrong.

The general law is that a corporation aggregate is liable to be sued for any tort provided that;

a) It is a tort in respect of which an action will be brought against a private individual.

b) The person by whom the tort is actually committed is acting within the scope of his authority and in the course of his employment as agent of the corporation.

c) The act complained of is not one which the corporation would not, in any circumstances, be authorized by its constitution to commit unless perhaps the corporation has expressly authorized the act.

The court in this case established the modern general principle of criminal liability of companies in this case. The court stated that a corporation can only have knowledge and form an intention through its human agents, but circumstances may be such that the knowledge and intention of the agent must be imputed to the body corporate. If the responsible agent of a company, acting within the scope of its authority, puts forward on its behalf a document which he knows to be false and by which he intends to deceive, his knowledge and intention must be imputed to the company.

The doctrine of alter ego may extend to managers if, in fact, they are in control. In this case, the court held that a company is liable for conspiring to defraud by the acts of its managing director.

The doctrine of alter ego may extend to managers if, in fact, they are in control. However, a distinction must be drawn between the acts of directors and managers who control what the company usually does and the action of servants who merely carry out the instructions of those who control the company, account being taken of any delegation of authority and the extent of such delegation.

A company can be guilty of committing contempt of court and even with regard to offences which a company cannot normally or directly commit because of its artificial nature, it is possible for it to be liable for aiding, counselling or procuring the commission of a crime.

In this case, the circumstance where the court may refuse to impute to the company the knowledge of its agents or directors was stated. The court held that where the company is the victim of the conspiracy of its directors and others, the knowledge of its directors will not be imputed to it.

A company is not liable for misappropriations from the company committed by those who control the affairs of the company; because such misappropriations are not the acts of the company since the latter could not have agreed to it and in fact, is a victim.

The court held that a company will not be held liable for misappropriations from the company those in control of the company because the company is a victim in the circumstance and the act of misappropriation is not that of the company.

In the case, the court held that a principal is liable for the acts of his agent where the act done by the agent is one which an agent of the type would normally have authority to do.

Those whose acts bind the company in the absence of specific authorization are the alter ego of the company, in other words, those persons who because of their positions are the directing mind and will of the company. They are the very ego and corporate personality of the company.

Where it is sought to bind a company by the acts of its officer, evidence must be led to show the status of the officer, as it is not the act of every officer that binds the company as a principal. It is those whose acts bind the company in the absence of specific authorization that are considered the alter ego of the company.

The court held that where a company does business through a branch, it will be liable for the acts of such a branch which will be treated as an agent of the company. The court stated in the case that where an allegation of negligent act is made against a corporate body doing business through several branches, it is inconsequential to the question of liability whether the acts were done through one or the other of the branches; what is material is whether the negligent act alleged against the corporate body has been proved. There is no doubt that the act of the branch is the act of the company just as the act of an employee of the company done in the course of his employment makes the company vicariously liable regardless of the branch from which he operates.

The court held in this case that a company cannot escape liability on a contract on account of insanity of its director. A company becomes an adult of full capacity upon incorporation; a company cannot plead infancy as a defense. Nor can it plead mental incapacity arising from insanity.

At the point of incorporation, its promoters must ensure that that a company has mentally fit persons to perform its task. If any of its directors or employees takes ill, physically or mentally, a replacement is to found with immediacy. If a company is lethargic about that, it has itself to blame.

The court held that a company cannot escape liability on a contract by pleading that its managing director is an illiterate in English. A company will be held liable on a breach of contract notwithstanding the illiteracy of its director or directors.

An incorporated company or body cannot take advantage of the provisions of the Illiterate Persons Protection Law. Illiteracy is neither a privilege nor a legally recognized status. It is a misfortune which must not be allowed to injure innocent persons.

The court held that a company cannot escape liability on a contract on account of its managing director and controlling shareholder being an illiterate.

A company owes itself a self-serving duty to employ the services of a literate person to transact its business. Where it chooses to retain the services of a person who is not literate in English, it cannot be heard to complain. It is a misfortune which must not be allowed to injure innocent persons.

The court will hold a company liable on a contract even when its managing director and controlling shareholder is barely literate and cannot write in English language but can sign his name. Where the court finds the signature of the managing director on the contract consistent with his other signatures, the court will hold the company liable. A company that chooses to use illiterate persons to manage its business has itself to blame.

Constructive Notice.

The court established the rule in this case to protect third parties and ensure that they are not prejudiced by defect in the company's indoor management which they cannot discover from an examination of the documents in the registry. The court stated that while people dealing with a company are assumed to have read the public documents of the company and to have ascertained that a proposed transaction is not inconsistent therewith, they are not required to do more; they need not inquire into the regularity of the internal proceeding, the indoor management of the company and may assume that all is being done regularly.

Liability of the Corporate Affairs Commission.

The Corporate Affairs Commission does not enjoy immunity. It has an obligation to comply with the law like any other juristic person. It can sue and be sued just like any corporate body. Section 1(2) (b) CAMA, 2020.

The court held that if, as a result of mistake, negligence or fraud, the Corporate Affairs Commission does not comply with the Companies and Allied Matters Act in carrying out its duties, the court will assume jurisdiction set aside its actions.

Jurisdiction of the Court.

The court which has jurisdiction in matters arising from the operation of the Companies and Allied Matters Act is the Federal High Court. The operation of the Companies and Allied Matters Act in relation to companies incorporated under include the management of such companies and their assets. It also includes a minority shareholders' action being an incidence of the control of a company by the majority.

The Federal High Court has jurisdiction on matters arising from the operation of the Companies and Allied Matters Act. Matters arising from the Act does not include a claim for damages by a managing director for wrongful dismissal.

The Federal High Court has jurisdiction on matters arising from the operation of the Companies and Allied Matters Act. However, the court held that matters arising from the Act does not include a claim for damages for wrongful dismissal of a director.

In an action on the legality and efficacy of the certificate of incorporation of trustees under the Companies and Allied Matters Act, the court which has jurisdiction is the Federal High Court.

It is not every case involving a company or body formed under the Act that the Federal High Court must exercise jurisdiction on, and the State High Court's jurisdiction is ousted. Before the jurisdiction of a State High Court is ousted and that of the Federal High Court vests, the matter must pertain to the operation of the Act in relation to companies formed under the Act, or any enactment regulating the operation of companies incorporated under the Act.

The Phrase "Arising under the Act."

The court held that the expression "matters arising from the operation of the Act" means no more than the operation of the Companies Decree in relation to companies incorporated thereunder and includes the management of such companies and assets.

The court considered the expression "matters arising under the Act" in relation to a minority shareholders' action. The court stated that a minority shareholders' action being an incidence of the control of a company by the majority, is associated or connected with the operation of a company and therefore falls under matters arising from the Act.

Property of a Company.

A director or officer of a company is its agent. Property which is held or managed on behalf of a company necessarily belongs to the company and not such director or officer.

Status of an Unincorporated Association

In the case, the court stated thus; an unincorporated association is not a legal person and therefore cannot sue or be sued unless such a course is authorized by express or implied statutory provisions, nor can a contract be made so as to bind all persons who from time to time become members of such association.

Constitution of an Unincorporated Association . In this case, the court held that where an association lays claim to having a constitution, it is obliged to prove the minutes of the meeting where it was adopted.

Usually, an association would have a constitution referred to either as rules or regulations. The constitution of such association restricts its extent, both by its objects as set out in its constitution. The association is restricted by common law to activities which are both lawful and appropriate to the general scope of its purpose. Where an association claims that it has a constitution regulating its activities, it must prove same by the minutes wherein the constitution was adopted.

The court held that in the absence of a constitution which governs the practice of an unincorporated body the common law applies. For instance, appointment of officers is done by a simple majority, also the reaching of decisions on other matters.

The simple majority approach is founded on the assumption that all in a group see their interest in the same way, especially where the interest is material, not intangible.

Members of a voluntary association subscribe or assent to certain rules and regulations which bind them. They expressly or impliedly bind themselves to each other to conform to certain laws and principles. The court held that where no rule exists, an association would be governed by the common law.

The court held that where a constitution exists for an unincorporated association, members of the association are expected to abide by it.

The court held that where a person applies to join an unincorporated association and his application is accepted, a contract comes into existence between him and the association, and the association impliedly agrees that the member would not be sanctioned by the association or its officers otherwise than in accordance with the rules.

It was the ruling of the court in this case that the law does not frown on amendments in the rules of an association which are of a minor character and with which all members for the time being agree to unanimously.

In drafting a constitution or rules of association, it is wise to insert an article that empowers the executive or a simple majority or any other of majority to amend the constitution.

It was the ruling of the court in this case that members of an association could, on notice, by a simple majority in a general meeting, amend or alter the rules. In any event, however, if at such a meeting, a majority purports to amend or alter the rules, and the others take no objection to it, but instead by their conduct acquiesce in the change, then those rules become binding on all.

Fair Hearing

The court decided in this case that an association should give its member who is threatened with expulsion or any other sanction a fair opportunity to express himself in the instance of accusation of any wrongdoing.

Elementarily, a person is entitled to be heard before being sanctioned in any manner. The principle of natural justice applies to any functionary who performs judicial or quasi- judicial duties.

In this case, the court conceded that the principle of natural justice will apply to any functionary who performs judicial or quasi-judicial duties. The court however went ahead to hold in case that the defendants were not entitled to a hearing because they had disassociated themselves from the church. The right to fair hearing does not mean being actually heard; it does not mean more than an opportunity to be heard. Where a person shows from his conduct that he no longer recognizes the association's authority, he is deemed to have disassociated himself; he would be deemed to have jettisoned his right to a hearing.

In the case, the court did not allow the Abatete Development Organization to enforce its rule in a way not provided for in its regulations. The rule was that no member of the association may be buried unless his heirs obtain clearance from the association's executive. Anyone who breached the rule was liable to be fined. The association sought to enforce the rule after it had been breached by injunction to restrain the burial of its member as opposed to a fine, as stated in its regulation.

Where an association seeks to enforce a rule in a way not provided for in its regulation, the court will not aid it. An association must follow its rules as stated in its constitution or regulations

Supremacy of an Association

Any society or association, comprising of members who voluntarily join it, is entitled to come to any decision which they like. It must be said that the party or association or even a club, to which any person belongs is supreme so far as its affairs go. The court will not interfere where members of a voluntary association have come to implement a decision within the provisions of their constitution even if that implementation of the decision is unreasonable.

The court will hinge its interference in the internal affairs of an association on breach of natural justice, the constitution or public policy.

.Expulsion from an Association

The court stated in this case that a partner may be expelled on the grounds of being addicted to scandalous conduct detrimental to the partnership business, being guilty of any flagrant breach of the duties of a partner or being dishonest.

In an association, closely linked to discipline of members is the sanction of expulsion. Depending on the association, expulsion is a severe sanction and an expelled member may fight to be reinstate. In some cases, a declaration is all a member may ask for, to clear his good name. The court stated that a member should not docilely fold his arms until he is expelled, he can proactively obtain an interlocutory injunction to restrain a threatened expulsion.

Power of Court Over An Association.

The court upheld an objection in this case on the ground that mere assertion that the constitution of an organization is infracted is not enough to get a court to intervene in its internal squabble.

The courts leave for a majority of a voluntary body to decide how best to run its affairs if such decisions accords with their constitution. A court of law has no jurisdiction to set aside or change the decision of a voluntary association made after its usual debate and approval.

The court will not interfere in the internal affairs of an association as the court does not run associations for the members. See Onuoha v. Okafor (1983) 2 Nig. Const. LR 244.

The court held that the fact that the ground upon which a person is sanctioned from an association is couched subjectively will not render a sanction ineffectual. Where an applicant fails to show that the words used were offensive and that his civil rights are invaded, the court will uphold the sanction of the association against him. See also Bamisebi v. Nylander (1985) Quaterly Law Report of Nigeria 177

Where a member is refused the opportunity of election to an office of honour and profit, the court will grant relief. The court will readily apply natural justice rules o straightforward disqualifications from membership or holding of an office in an organization.

Generally, the law frowns upon the capricious exercise of power. If an association's constitution contains a power to disqualify a member, the court will not interfere; but the clause will be construed strictly and where there is ambiguity, it will be construed against such disqualification. See Leigh v. National Union of Railwaymen (1970) 1 Ch. 326.

Tribunals set up by an Association.

In the case, the court stated that where any religious or other lawful association has not only agreed on the terms of its union, but has also constituted a tribunal to determine whether the rules of the association have been violated by any of its members or not and what shall be the consequences of such violation; the decision of such tribunal will be binding when it acted within the scope of its authority, has observed such forms as the rules require, if any forms be prescribed, and if not, has proceeded in a manner consonant with the principle of justice within their cognizance and not enforceable under any independent coercive jurisdiction.

Members of a voluntary association subscribe or assent to certain rules and regulations which bind them. They expressly or impliedly bind themselves to each other to conform to certain laws and principles. The court held that where no rule exists, an association would be governed by the common law.

The court stated that the rule in Foss v. Harbottle applies only to intra vires acts. The rule does not apply where what has been done amounts to a fraud upon the minority. It does not prevent an individual member from suing if the irregular act in respect of which he is suing is one which could validly be done by a simple majority of the members of the association but only by simple majority.

Being a member of an association entitles one unquestionably to the privileges thereof and one is also bound by the disadvantages that arise from the membership, violenti non fit injuria. The court stated that a member cannot be heard to say that his constitutional right has been breached when he not only joined an association voluntarily but willingly accedes to the association's use of self-remedy to enforce its rules where there is an infringement.

Whether an Incorporated Association can Sue or be Sued?

An unincorporated association cannot sue in its name as it is not a legal person. Apart from natural human persons, the other species of persons are incorporated bodies like companies. Mere fact of registration does not import legal personality to an unincorporated body.

The court held that an unincorporated body can sue through its members by their individual names.

Under common law, an unincorporated association cannot sue or be sued in its name. The court dismissed the claim for declaration by the respondents because it was not a juristic person. The onus was on it to prove its juristic entity but it failed to do so.

An unregistered body cannot sue or be sued and not being a juristic or judicial persona known to or recognized by law has no capacity in law to authorize named representatives to represent it. It has no perpetual succession, no common seal and cannot do anything.

However, the reasoning above by the court was set aside as the Supreme Court held that an unincorporated association, though it is not a juristic person, it is enough if the group sought to be represented is easily identifiable and has a common purpose.

Where a suit is brought by plaintiffs, or against defendants in a representative capacity and such plaintiffs or defendants do not obtain the leave of court to sue or defend in such capacity, it will be taken that they are suing or defending personally and any judgment entered against them will be personal.

However, failure to obtain leave of court does not vitiate the proceedings. See Otakpo v. Sunmonu (1987) 2 NWLR (Pt. 58) 587.

The passing of a resolution authorizing members of an association to commence an action in representative capacity is a clear recognition of the necessity to be fully armed in order to be able to prosecute a claim without any procedural hitch. A member in proof of authorization to sue on behalf of an association in representative capacity may tender the minute book of the society or call some of its responsible members

A member of an association who objects to a writ taken out by another for himself and on behalf of members of the association may apply by motion to express his dissent. The dissenter's motion may say that the plaintiff has no right to represent him or that he does not want them to represent him. Upon hearing of the motion, the dissenter will be made defendant in the plaintiff's claim; his dissent does not terminate the plaintiff's suit.

In drafting a statement of claim in a case where a person is suing in a representative capacity for an unincorporated association, a legal practitioner must assiduously state the composition of the association, the plaintiff's membership, and his right in the association, as well as his authority to institute the action.

The court held that a president, treasurer and secretary of an unregistered association may be sued on behalf of all the members. Any person or persons who fairly represent an association on behalf of whom are sued may be sued.

The court held that where a plaintiff seeks relief against an unincorporated not-for-profit association arising from a breach of contract, he must show that the association has a common fund and that the defendants in the case, are representatives of the association.

The court considered the liability of a contracting party in this case. The court stated that when a person signs a contract in his name, he is prima facie a contracting party and liable unless there is something very strong on the face of the instrument to show that liability does not attach to him.

It was the ruling of the court in this case that where a party's action is in torts against an unincorporated association, he can sue the actual tortfeasor if he knows him and join the association's officers vicariously. Where the tortfeasor is unknown, an action can lie against the association's officers.

The court held that no action can be brought by or against any party other than a natural person or persons, unless such party has been given by statute, expressly or impliedly, or by the common law either a legal persona under the name by which it sues or is sued or a right to sue or be sued by that name.

Mere financial membership of an association does not empower a member to sue to right a perceived wrong. It was the position of the court that a party must indicate in the statement of claim, what his interests are and how those interests stand threatened as it is not to blandly state that one has an interest; there must be an averment that such interest is threatened.

In the case, the court held that if it happens that a business name is not registered, it is a contravention of the law and there are penalties involved. However, the fact that a business name is not registered does not provide immunity against it being sued in that name, whatever its status.

If a person enjoys the benefits of carrying on business in a name and style other than his forename and surname, he is not allowed to cry foul if he is sued in that name.

In this case, the court stated that the authority to represent others in a suit on behalf of an unincorporated association is a matter of proof and the best proof is by production of the minutes of the meeting of the association conferring such authority.

In this case, the court laid down the position of the law that when parties are suing or being sue in their representative capacity, both in the writ and all subsequent pleadings, it should be clearly stated that parties are suing or being sued in their representative capacity, on behalf of a defined class.

The representative capacity should be stated in the title of both the writ and the statement of claim and not merely in the endorsement of the writ or the body of the pleading. See Re Tottenham (1896) 1 Ch. 628.

Freedom to Dissociate.

The constitutional right of freedom of association would be meaningless if freedom to disassociate were excluded. Interestingly, Article 29 of the African Charter on Human and Peoples Rights expressly provides that a person shall not be compelled to join an association. The right not to associate emanates from the guarantee of association and gives it life and substance.

Certain persons with noble intent and organizational skill seek to get persons who work or live in proximity to form associations. Misplaced enthusiasm in what is considered a noble cause takes the better part of reason and zealots seek to force all to join. A person is not to be forced to join an association against his will as it would be contrary to the constitution and an infringement of his rights. See also Igwe v. Ezeanochie (2010) 7 NWLR (Pt. 1192) 61.

Incorporated Trustees.

The court held that the mere submission of a caveat objecting to the appointment of a person as a trustee of an association does not terminate the application to register. The Commission is empowered to evaluate the caveat, and if it contains substance, the Commission is to inform the applicant; if the caveat is considered worthless, the body shall be registered. If the Commission assents to the application, it shall register the trustees and issue a certificate in the prescribed form.

Unless the necessary and proper plaintiffs are before the court in the case of incorporated trustees, it is futile to proceed to adjudicate on the issues in controversy as the action cannot be regarded as being properly constituted

The court stated in this case that upon incorporation and registration of trustees, no action can be maintained by or against the corporate body in the name of one or more of the members of the association or in the personal name of one or more of the trustees. See Nworienta v. Ogu (1964) 9 ENLR 117.

However, it must be stated that upon registration, a group becomes a legal person in the registered name and like other incorporated bodies, it becomes distinct from the members, including the persons listed as trustees as much as an incorporated company is distinct from the subscribers to the memorandum of association, directors and even the controlling shareholders. A juristic person cannot sue in a representative capacity of another juristic person as doing so is otiose and a tautology.

The court held that where an incorporated association by its constitution stipulates how appointment of trustees may be done and by whom it may be done, failure of the association to adhere to it will render any appointment made invalid. The court will annul such appointment not made in accordance with the constitution of the incorporated association. See also Owodunni v. Registered Trustees of Celestial Church of Christ (2000) 10 NWLR (Pt. 675) 315.

The court stated in this case that no trustee has the authority or power to alter a trust and substitute something quite outside the original purpose for which the trust was established. To do so would smack of irresponsibility which the court will not countenance. It is of no moment that the trustee intends to benefit the majority of the persons interested in the property. See In Re Pauling's Settlement Trusts (1964) 1 Ch 303.

The court stated that so long as the beneficiaries of a trust remain members of an association and there is abundant evidence that they are, it is they and no other persons who are entitled to benefit from the trust. By virtue of their position, those remaining beneficiaries have proprietary interest in the trust property which they can follow into any form which it has been turned. Where beneficiaries cease to be members of an association, they have no locus standi in relation to the management of the trust property.

the court held that a mere change in the name of a religious body effected by a majority of the members or in accord with its regulations does not constitute a basis to order that a schism has occurred especially while the group sticks to its original doctrines.

Where the constitution of a religious group expressly provides that some members may separate and the property of the group shared accordingly, it would be a matter of contract and the court will have authority to act on it. The onus is on the seceders to prove the existence of such a contract.

Disgruntled members of a religious group may change their faith but cannot take along properties that belong to the religious group. An association can own property for its members. For such properties to vest, they must be made through persons who have been appointed trustees. The court held that where schism occurs, members cannot take along the properties of the association. See also Adeboyega v. Igbinosun (1969) NSCC 13.

In the case, the court held that where an action is brought by two opposing groups who claim to be entitled to the properties and assets of a religious group to the exclusion of the members, the onus naturally falls upon the plaintiff to prove that there has been schism, that the defendants no longer share in the same tenets, doctrines and creeds as originally agreed upon by the founders of the group.

Schism is the division of a group of united body of religious devotees into opposing sects.

Ownership of Property by an Unincorporated Association.

It was stated by the court that the law shows that an unincorporated body or associations of persons is a factual reality. An association, though unregistered, must appoint trustees or a trustee who will apply for registration. Thus, the law takes into cognizance the fact that before the application is made, that is, while the association is not registered in law, certain persons may be appointed trustees who must act in that capacity.

An unincorporated association can now own property for its members. But for such property to vest, it must be made through persons who have been appointed trustees. An unincorporated association does not legally exist and must of necessity act through its appointed representatives. On the other hand, a corporate entity, that is, an association that has been incorporated has legal personality. It can sue and be sue in its corporate name. It can and will enter into any agreement in its corporate name.

The court held that the inclusion of the terms of a pre-incorporation agreement in the memorandum of association of a proposed company is an indication of a strong desire by the contracting shareholders that the proposed company after its incorporation should execute the terms of the agreement so included but the company is under no obligation to execute the agreement

The court held that a company which is unincorporated is not competent to sue to enforce a contract in the event of a breach. It lacks the competence to take out a process against the offending party as it is non-existent in the eyes of the law.

A company which fails to ratify a pre-incorporation contract is disabled from suing on it; nor can the other party to the contract sue the company where it has not ratified. See also Section 96 CAMA, 2020.

Who Is A Promoter?

Any person who undertakes to take part in the formation of a company with reference to a given project and to set it going and to take the necessary steps to accomplish that purpose, with regard to a proposed or newly formed company , undertakes a part in raising capital for it , is deemed a promoter of the company.

In this case, the court held that a person acting in a professional capacity for persons engaged in procuring the formation of the company is not to be deemed a promoter.

A solicitor or valuer does not become a promoter merely by acting in a professional capacity to a promoter. The court stated in this case that a solicitor may, of course, become a promoter in some other capacity such as where he joined with another to negotiate a property for the proposed company at a profit.

The court stated in this case that when a person becomes a promoter is a question of fact depending on when he takes any part in forming the company and or setting it going. Neither mere intention nor even an agreement to promote without more is sufficient.

In this case, the court held that a person who purchased a property for his own use and later decided to form a company to acquire the property became a promoter only from the time when he took steps to form the company.

The time a person becomes a promoter is a question of fact depending on the circumstances of a particular case. It depends on when the promoter takes any part in forming the company and sets it going. Mere intention or agreement to promote without more is not sufficient. The court held in this case that there must be a promotion in fact, some step must be made in carrying out the object.

Status of a Promoter

In this case, the principle of how a promoter stands in relation to a company was laid down. The court stated that a promoter stands undoubtedly in a fiduciary position in relation to the company. They have in their hands the creation and molding of the company, they have the power of defining how, when and in what shape and under what provision the company will shall start into existence and begin to act as a trading corporation.

In law, promoters are not agents or trustees of the company they are promoting, this notwithstanding, the law places promoters in fiduciary relationship viz-a-viz the company they incorporate

In this case, the court held that a promoter is a human agent and a promoter's activities often give birth to the company as a legal entity.

A promoter will include persons who assist in the formation of a company and setting it going, for example by obtaining the directors, negotiating an agreement, purchasing or otherwise acquiring property for the company, issuing prospectus or agreeing to place shares.

The court stated in this case that a company may recover from a promoter the profit which he made from the promotion. Where the breach extends further than non-disclosure, the company may retain the property purchased and also demand a refund of profit in a case of breach of duty in original acquisition of property.

A company may recover from a promoter the profit which he made from the promotion. The court held that if a breach of duty extends further than non-disclosure, as when there was a breach of duty in the original acquisition, the company may retain the property purchased and also demand a refund of the profits.

The court stated the liability of a promoter for breach of his fiduciary duty in this case and the power of a subscriber to sue a promoter. The court held that a company may sue the promoter for damages for breach of his fiduciary duty. In addition to the remedy by the company, a subscriber may sue for damages for fraud where he subscribed on the strength of a false statement willfully made by the promoters, or for compensation for a false or misleading statement in the prospectus.

What the Memorandum and Articles of Association of a Company Are.

The court held that the memorandum of association is the fundamental document of a company, it governs mainly the relationship of the company and the outside world, it contains some important information about the name, registered office, object, liability and the pledge by the members to be bound as an association by what is contained in the memorandum.

The memorandum of association of a company controls the articles of association. However, the latter may be used to explain the former in respect of matters which are not required by the Act to be stated in the memorandum.

The memorandum of association of a company is its fundamental constitution or charter. It defines and regulates the company's status and powers and enables shareholders and outsiders who deal with the company to know what business it is permitted to undertake and the limit of such business, what capital the company has and what its relations with outsiders is generally.

The court held in this case that the memorandum when registered becomes binding contract between the company and its members and officers and between members and officers themselves. Its provisions are binding on the parties thereto and any contravention of the provisions is actionable at the instance of the interested part.

An article of association contains the rules and regulations by which the internal affairs of a company are governed. On the other hand, the memorandum of association of a company sets out the objects and constitution of the company.

The court considered the interpretation of the word "notwithstanding" and held that the "notwithstanding" means "inspite of."

The court held that the memorandum of an association contains the fundamental conditions upon which alone the company is allowed to be incorporated. They are conditions of the protection of creditors, the outside public and also for the shareholders. The articles of association are for the internal management and regulation of the company.

The ultra vires rule was laid down by the court in this case. The court held that if a company pursues objects beyond the scope of the memorandum of association, the actions of the company are ultra vires and void.

However, the rule has been modified in Nigeria by the Companies and Allied Matters Act in Section 35(1). Section 35(1) CAMA, provides that unless a company's articles specifically restrict the objects of the company, its objects are unrestricted.

Alteration of the Articles of Association of a Company.

The court held in this case that the alteration made to an article must not be such as to sacrifice the interests of the minority to those of the majority without any reasonable prospect of advantage to the company as a whole. Although a member is ordinarily free to vote as he pleases, still he is not at liberty to vote in such a way as to oppress a minority of his fellow shareholders.

The court held that a provision that no alteration shall be made without the consent of a specific person is contrary to the Act. A company may by special resolution alter or add to its article; and any alteration or addition so made in the articles, is subject to the provisions of the Act, is as valid as if originally contained in it and is subject, in like manner, to alteration by special resolution.

It was the ruling of the court that a provision that no alteration shall be made without the consent of a specific person is contrary to the Act. A company may by special resolution alter or add to its article; and any alteration or addition so made in the articles, is subject to the provisions of the Act, is as valid as if originally contained in it and is subject, in like manner, to alteration by special resolution.

The court stated in this case that a person with substantial interest in a company may ensure that certain provisions cannot be altered without his consent by being issued with the shares of a separate class with right to veto any alteration of the particular article. The court held that since the class right can only be altered by members of that class, he will be the only person to decide on the alteration of the rights attached to that class.

An alteration of the articles of an association of a company can only be made according to law, otherwise such alteration will be void.

The court held that an alteration of the articles of association should only be made bona fide and in the interest of the company.

The court held that the company could not make an alteration to the Articles of Association because it was not for the benefit of the company as a whole. The company in this case sought to alter the articles of association of the company to give the majority power to purchase the shares of the minority.

The court held that the alteration of the articles of a company is to be made bona fide for the benefit of a company as a whole. This is necessary to prevent a majority of the membership from adopting an articles by which the majority could seek to gain an advantage at the expense of the minority of the membership.

The court stated that when a man comes into a company, he is not entitled to assume that the articles will always remain in a particular form, and so long as the proposed alteration does not unfairly discriminate and the resolution to alter the articles is bona fide passed, it is valid.

The court considered the right of a company to alter its articles in breach of a contract with a third party. The court stated that, the rule is that a company cannot be precluded from altering the articles thereby giving itself power to act upon the provisions of the altered articles, but to so act may nevertheless be a breach of a contract if it is contrary to a stipulation in a contract validly made before the alteration.

Decision in Breach of the Articles of Association.

The court stated in this case that any decision taken by a company in breach of the articles of association is valid against the whole world save members complain about it.

The articles do not constitute a contract between the company and an outsider, even where an aggrieved third party proves a breach of the articles which is the basis of his claim, he cannot succeed as he has no locus standi.

Contract Created By the Articles of Association

The court stated that the contractual relations created by the articles of association are statutory and therefore not subject to the equitable jurisdiction of the court for rectification even where it is shown that the contract does not reflect the intention of the members.

The court observed in this case the articles of association as containing the rules and regulation of a company. The court stated that a study of the articles of association undoubtedly contains the rules and regulations by which the internal affairs of a company are governed. On the other hand, the memorandum of association of a company sets out the objects and the constitution of the company. The memorandum and articles when registered, therefore, becomes a contract between the company and its members and officers, and between the members, and officers. Their provisions are binding on the parties thereto. Any contravention of their provisions is actionable at the instance of the interested party.

The court held in this case that the articles of association and the memorandum of association defines the individual personal rights of members of the company and when registered, has the effect of a contract under seal between the company and its members and officers and between the members and officers themselves whereby they agree to observe and perform the provisions of the memorandum and articles, as altered from time to time in so far as they relate to the company, members, or officers as such.

Duty of an Agent.

In the case, the court held that every agent has the duty to keep the money and property of his principal separate from his own and from that of every other person. The right of the principal to have such an account rests upon the fiduciary relationship existing between him and his agent which terms includes any person who acts for another in the capacity of duty, steward, rent collector or any other agent or trustee. It is the first duty of an accounting party to be constantly ready with his account.

Liability in Agency.

The court in its ruling held that when a person makes a contract in his own name, without disclosing either the name or the existence of a principal, he is personally liable on the contract to the other contracting party, even though he may be in fact acting on a principal's behalf.

An agent who contracts in his own name does not cease to be contractually bound because it is proved that the other party knew when the contract was made that he was acting as agent.

In the case, the court held that it is not the law that if a principal is liable, his agent cannot be. The true principle of the law is that a person is liable for his engagements (as for his torts) even though he is acting for another and unless he can show that by the law of agency, he is to be held to have expressly or impliedly negative his personal liability.

However, the law permits a person to expressly or impliedly exclude himself from tortuous liability such that the agreement would be binding on the third party. This is by the insertion of an exclusion clause in such agreement.

In the case, it was held by the court that where a person makes a contract in his own name without disclosing either the name or the existence of a principal, he is personally liable on the contract to the other contracting party, though he may in fact be acting on the principal's behalf. Nor does he cease to be liable on the discovery of the principal by the other party unless and until there has been an unequivocal election by the other contracting party to look to the principal alone

The court held that although a particular act which gives rise to a cause of action may not be authorized, still if the act is done in the course of employment which is authorized, then the master is liable for the act of his servant.

The question whether anything done by an agent is authorized is clearly one of fact and in each case the answer will depend on the scope of the agent's employment; and within the limits of his authority.

The law is that the ratification by or on behalf of the principal of the action of the agent may be express or implied, and in the case of an agent exceeding his authority, ratification may be implied from the mere silence over, or acquiescence in, the action of the agent by the principal.

The court held that the fact that a person is an agent and is known to be so does not of itself necessarily prevent his incurring personal liability. The nature and terms of the contract and the surrounding circumstances determine whether or not he should be held liable.

The court held that even if an agent acted on behalf of a principal, a party can claim against both the agent and the principal. If the agent did not have the authority of the principal to act, he becomes personally liable for any breach of contract.

The court held that where there is absence of evidence to portray a party as an agent for a principal, such party will be held personally liable for the breach arising out of contract with a third party.

The court held that an agent or employee who insists that he has the company's authority to act may join the company in an action so as to be indemnified in a third party proceeding.

It is the general principle of law that when an act is done by one person at the request of another which act is not in itself manifestly tortuous to the knowledge of the person doing it, where such act turns out to be injurious to the rights of a third party, the person doing it is entitled to an indemnity from him who requested that it should be done.

The agency of a company must be established substantively and cannot be inferred from the holding of director's office and the control of shares alone. The court stated in this case that a company is not an agent of its controlling shareholder or managing director.

The court stated in this case that the law is that an agent of a disclosed principal is not ordinarily personally liable on a contract he enters on behalf of the said principal. Where a party is an agent and acted as such and the principal was at all material times disclosed, he will not be held personally liable in the event of a breach of contract.

If a party chooses to operate under different corporate names, then he makes himself and those other corporate names which operates with liable. This is in the interest of justice so as not to allow a third party suffer injury.

The court laid down the conditions which must be fulfilled to entitle a contractor to enforce against a company a contract entered into on behalf of a company by an agent who had no actual authority to do so. It must be shown that;

a. That a representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor;

b. That such representation was made by a person or persons who had actual authority to manage the business of the company either generally or in respect of those matters to which the contract relates;

c. That he was induced by such representation to enter into the contract, that is, he in fact relied on it.

A master cannot escape liability for the servant's wrongful acts committed in the course of the servant's employment merely because he expressly prohibited the act; the essential question is whether the act was committed in the course of the servant's employment. If it was, it does not matter that as between the servant and the master, the former was prohibited from doing the act in question. Undoubtedly, an express prohibition from the master may, however, limit the scope of the servant's employment.

On the same principle, a principal is liable for the acts of his agent done within the scope of his authority. In each case, it is always necessary to determine in the first instance what exactly the servant or agent was employed to do.

In this case, the court stated that there is a vast difference between a person who sues or is sued as an agent for and on behalf of his principal and a person who sues or is sued for himself and on behalf of others. In the case of the former, there is no common interest between the agent and the principal beyond the relationship of principal and agent whereas in the latter, the persons suing or being sued have a common interest in the subject matter of the action with those whom they represent.

Agency by Estoppel.

It was the decision of the court in the case that ostensible authority gives rise to agency by estoppel. Ostensible authority is based on the doctrine of "holding out". Agency by estoppel arises where one person has so acted as to lead another to believe that he has authorized a third party to act on his behalf, and that other in such belief, enters into transactions with the third person within the scope of such ostensible authority.

In the case the court stated that agency by estoppel arises where one person either holds out another as being his agent or allows another to hold himself out as his agent even though no such agency exists in fact, the other person will be precluded from denying the existence of the agent's authority to act on his behalf.

The object of estoppel is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which unless the assumption is adhered to would operate to the other's detriment. If a person represents or permits it to be represented that another person has authority to act on his behalf he will be bound in the same way as he would be if that other had in fact authority to act. The foregoing is based on the legal principles of estoppel and holding out. The law always allows one man to authorize another to contract for and bind him by an authorized agent. The legal effect is that he does an act through another is deemed in law to do it himself.

The court in the case held the contribution of funds by one party and the services of a car to the business as a constitution of partnership between patties. The essential element common to all partnerships is the pooling together of resources, capital or labor or skill for the purpose of the business. Thus, one person may propose to provide the expertise and another, the funds. A party's contribution of business contact is sufficient to constitute a partnership.

The fact that a business enterprise is registered as a firm of unincorporated body of two persons raises a presumption that it is a partnership.

A party's contribution of a business contact is sufficient to constitute a partnership. The essential element common to all partnerships is the pooling together of resources, capital or labor or skill for the purpose of the business. Thus, one person may propose to provide the expertise and another, the funds. A party's contribution of business contact is sufficient to constitute a partnership.

The court held in this case that to determine the existence of a partnership, the legal rights created by the relationship must be considered, and regard must be had to the nature of the relationship, sharing of profits, advances if any in relation to the business and liabilities of the parties.

It must be noted however, that it is possible for a person to be both a partner in a business and at the same time an employee. There is no inconsistency in that; it is a matter of provable evidence.

In this case, the court stated that the fact that two persons carry on business on the same premises is not conclusive that they are partners much as the fact that a man and woman reside in the same premises does not make them husband and wife

In this case, the court stated that the fact that two persons carry on business on the same premises is not conclusive that they are partners much as the fact that a man and woman reside in the same premises does not make them husband and wife

The court held that persons who agree to share profits of a business transaction which they engage in are prima facie partners, although they may stipulate that they may not be liable for any losses beyond the sums they agree to subscribe. There is also nothing to prevent one or more partners from agreeing to indemnify others against loss. However, where parties share goods only, without sharing profits, it does not amount to a partnership.

The court held that persons who agree to share profits of a business transaction which they engage in are prima facie partners, although they may stipulate that they may not be liable for any losses beyond the sums they agree to subscribe. There is also nothing to prevent one or more partners from agreeing to indemnify others against loss. However, where parties share goods only, without sharing profits, it does not amount to a partnership.

The essential characteristics of a partnership was laid down by the court as being that;

a. There must exist a business that is being carried on or is to be carried on;

b. The business is carried on in common and with a view to profit;

c. Every partner is entitled and bound to take part in the conduct of the business unless there is an agreement to the contrary; and

d. Every partner is liable for the debts of that relationship to the whole extent of his property, and to contribute as between the partners and debtor in proportion as the profits are shared.

A party who circumspectly reduces the discussion and points of agreements as well as tentative issues into writing and sends a copy to the opposite party for confirmation does not thereby make an offer that is subject to acceptance for it to be valid. Rather, such document is considered conclusive.

The court stated in this case that an agreement which contemplates a partnership at a future date is not a partnership. While negotiations are afoot, either party is at liberty to withdraw at any time. An agreement to agree in future is not an enforceable contract. It is unknown to law.

Where there exists a partnership deed which parties executed, evidence of the legal practitioner who prepared the partnership deed and evidence of a joint account opened with a bank in the name of the partnership firm, the court will not fail to hold the existence of a partnership.

Partnership Books

A man is entitled to keep his books as he pleases and is not bound to follow the practice of others in every detail. Standards and methods of keeping books vary with the educational standard and maybe culture of the proprietor of the business. The system adopted by multinationals would not necessarily be the criterion for the less articulate.

The court held that a partnership need not comply with much formality. However, where a partnership is registrable but not registered, the partnership is illegal and any contract which may be entered into therein in pursuance of the business by the defaulter is unenforceable.

Status of Partners in a Partnership

In the eyes of the law, every partner is the general and accredited agent of the partnership and may, consequently bind all the other partners by his acts in all matters which are within the scope and objects of the partnership.

The court held that if a partner receives money on behalf of the partnership, he is an accounting party. He is bound within a reasonable time after demand to render a detailed account of all the monies received by him in that capacity, showing how much he has paid over the partnership and how much the partner has left in hand.

The court held that if a partner receives money on behalf of the partnership, he is an accounting party. He is bound within a reasonable time after demand to render a detailed account of all the monies received by him in that capacity, showing how much he has paid over the partnership and how much the partner has left in hand.

The court held that where loss occurs in a partnership, in the absence of proven misappropriation against any partner, all partners must bear the loss arising from the partnership equally.

Partnership Property

The court held that a partner cannot detain a partnership property on the grounds of being owed. A property or machinery acquired in the course of a partnership remains the property of the partnership and cannot be held as lien for payment by any of the partners in the partnership.

Unless the contrary is established, property bought with money belonging to the firm is deemed to have been bought on account of the firm. If such property has been taken by the partner in his own name, he will be deemed to hold it in trust for the partnership.

Where a partner acquires property in the course of gaining a secret profit as against the other partners, equity treats such partner as holding the property in trust for the partnership. It is a question of the secret profit being transformed into the property purchased and equity operating on such property by treating the partner as holding it under a resulting trust for the partnership.

The court held that a partner is regarded as holding partnership money in his fiduciary capacity on behalf of the other partners.

It was the decision of the court in this case that unless the contrary is established, property bought with money belonging to the firm is deemed to have been bought on account of the firm.

If such property has been taken by a partner in his own name, he will be deemed to hold it in trust for the partnership.

Liability of a Partnership

The court stated in the case that a partnership is not liable for the personal debts of a partner unless those debts were incurred expressly or impliedly on behalf of the partnership. For this reason, a bank cannot combine the personal account of a partner unless there is express or implied permission to do so.

The court stated in this case that a person who represents himself to be a partner, or knowingly allows himself to be represented as such, is liable as a partner to anyone who has given credit to the firm on the faith of such representation.

If a person or firm holds out someone as a partner, there will be an estoppel preventing such person or firm from later relying on the fact that there was really no partnership. Such relation must be distinguished from apparent authority. The question of holding out may arise where a partner is retired from a firm.

The death of a partner does not terminate the liability of his estate of the partnership. The court held that suppose a partner dies before an action is brought, and an action is brought against the firm in the name of the firm. The dead man is not a party to the action, so far as his estate is concerned, for a dead man cannot be sued, though the legal representatives of a dead man cannot can be sued in a proper case. In that case, the action would be an action solely against the surviving partners.

At common law, if a creditor sued joint debtors and one died, the survivors only could be sued. In the case of a partnership liability, the creditor might now join in one action, the surviving partners, the legal personal representatives of the deceased partner, but the latter would have to expressly be added as defendants. If the legal representatives of a deceased partner are not added expressly as defendants, and the action is brought against the firm in the firm's name, then judgment can only be obtained as against the surviving partners and be enforced against them and against the partnership assets.

The court held that it is of essence in a claim for an account that the plaintiff does not know how much the defendant has collected on the plaintiff's behalf and or expended on behalf of the plaintiff, and therefore the plaintiff cannot specify the precise sum due to him or expended out of the sum, on behalf of the partnership.

The court held that in an action for an account, a partner must plead material facts showing that he is entitled to an account which he claims is from the defendant. First, the pleading must show in outline the terms upon which the court can conclude that the defendant is an accounting party to the plaintiff. Next, the claim should show that the defendant has failed in his duty in that he has refused to render an account.

Sharing of Profits.

The court will share the profits between the parties according to the proven value of the capital contribution of each party where the partnership books are burnt.

Right of Partners.

In this case, the court held that every partner has the right to have an account from his co- partner. An action for an account may be maintained by partners although partnership accounts are not complicated; and although an action for damages may be sustainable.

The decision of the court was that a partner is entitled to be indemnified by the partnership in respect of payments made and liabilities incurred in the ordinary and proper business of the partnership.

In this case, it was the ruling of the court that there is no requirement to sue all the partners in a partnership but that where the plaintiff sues one or more partners but not all and obtains judgment then he cannot subsequently proceed against the others.

Duty of Partners in a Partnership

If profit is made by business within the scope of a partnership business, then the partner who is engaging in that secretly cannot say that it is not a partnership business. Again, if a partner makes any profit by the use of any property of the partnership, including information which the partnership is entitled to, it must be brought into the partnership account. If a partner from his position as partner gets a business which is profitable or an interest in partnership property, he cannot hold it for himself, because he acquires it by his position as partner, and acquiring it by means of that fiduciary position, he must bring it into the partnership account. This is an obligation arising from the fiduciary relation which partners bear one to another.

The court, in this case held that the general rule is that the court will not entertain an action for the partnership account where no dissolution of the partnership is sought. However, there are some exceptions to the general rule that where a party disputes the existence of a partnership and the other party proves it, then an account of the past dealings and transaction may be decreed by the court although the successful party does not seek for the dissolution of the partnership.

Where, in an action for partnership account, dissolution of partnership is not sought, the court will not entertain such action. However, where a party disputes the existence of the partnership and it is proved by the other party, the court will decree the existence of a partnership, order an account and dissolve the partnership.

In the case, the court held that a partner is not allowed, in transacting the partnership affairs to carry on for his own sole benefit any separate trade or business which, were it not for his connection with the partnership, he would not have been in a position to carry on. Bound to do his best for the firm, he is not at liberty to labor for himself to their detriment; and if his connection with the firm enables him to acquire gain, he cannot appropriate that gain to himself on the pretense that it arose from a separate transaction with which the firm had nothing to do.

In this case, the court laid down the principle that a partner has no right whatsoever from using the property of the partnership in the running of another business without the consent of other partners. It is an illegal act and will amount to fraud on his co-partners.

A partner who consents to a resolution of dispute with his fellows is wise to arm himself with adequate legal advice. Once he executes an instrument at the end of the dispute resolution, he would be hard put to resile from it. The court, as in the instant case, will not accept the plea of not having adequate legal advice or inability to put forth relevant documents. Nor would the plea of non est factum which is easy to raise but difficult to prove avail him once he has signed the document. See Saunders v. Anglia Building Society (1971) AC 1004, Ezeugo v. Ohanyere (1978) 2 Law Rep of Nig. 20.

Dissolution of Partnership

An action for dissolution of a partnership will succeed on the proof that the partnership cannot go on either because it can only be carried on at a loss, or because one or more partners are so conducting themselves as to render a continuation of the partnership business impossible or at least very difficult.

The court is at liberty to declare that a partnership ceased to exist on the date when a writ of dissolution of a partnership is served on a partner.

Where there is a likelihood of a breach of the peace in a partnership, the order the court is to make is the dissolution of the partnership and not the appointment of a receiver.

Husband and Wife Partnership

Where parties before marriage agree by a memorandum of understanding to share properties, even in the event of the marriage contracted being a nullity, the court will order the properties involved to be sold and the proceeds shared equally. This is where it is proven that parties both contributed to the acquisition of the properties.

Where a husband and wife incorporate a company, are the sole shareholders and directors and acquire properties using company funds, in the event of a divorce, by the doctrine of resulting trust, the properties so acquired belong to the company, not to the shareholders. Consequently, neither the man nor his wife can assert title to it.

An incorporated company is a separate legal entity and parties are not at liberty to share its assets and walk away as they would partnership assets.

In the case, a man acquired a right of occupancy in joint name with his wife but sought to exclude his wife from the property. The court resisted his attempt and held the property a joint property

If a spouse draws on a joint account to make purchase in the joint name of spouses, the property so purchased, since it is purchased in joint names, is, prima facie, joint property and there is no equity to displace the joint legal ownership.

In the absence of express or implied agreement the law treats a joint account between husband and wife as an account on which each party has power to draw to take money out of the ambit of the joint account and employ it as deemed fit either for his or her own purposes and if the money is drawn out and invested, there is no room for inference that the investment is held in trust for either spouse. However, where money is drawn from a joint account to make purchase in the joint name of parties, such property is joint property.

When there is a joint account between husband and wife, a common pool into which they put all their resources, it is not inconsistent that the account should be picked apart and divided up proportionately to the respective contributions of husband and wife, the money which goes into the pool being joint property in event of dissolution of the marriage.

The principle of the law in this case is the power of the partner to borrow on the credit of the firm. The court stated that one of the most important of the implied powers of a partner is that of borrowing money on the credit of the firm. At the same time, the implied power of borrowing money, like every other implied power of a partner, exists only where the business is of such a kind that it cannot be carried on in the usual way without such power.

In this case, the court defined a share as the interest of a shareholder in a company measured by a sum of money, for the purpose of liability in the first place, and interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with the law. A share is not a sum of money but is an interest measured by a sum of money and made up of various rights contained in the contract, including the right to a sum of money of more or less amount.

The court stated in this case it is not necessary that the words "preference shares" or "different classes of shares" should be used in the articles of association of a company; all that is necessary is that the articles should contain some express words indicating that all shareholders may not necessarily be on the same footing.

The court stated in this case it is not necessary that the words "preference shares" or "different classes of shares" should be used in the articles of association of a company; all that is necessary is that the articles should contain some express words indicating that all shareholders may not necessarily be on the same footing.

The court held that a preference shareholder has no right to participate in the dividend of a company. All a preference shareholder is entitled to, is the percentage dividend for which it is created.

However, a company may create preference shares giving a right to participation in the dividend of the company.

The court held that in the case of non-cumulative dividends, it is usual to state the funds out of which it going to be paid.

The court held that in the case of non-cumulative dividends, it is usual to state the funds out of which it going to be paid.

The court held in this case that the notice convening a meeting at which a resolution to increase the share capital of a company is to be passed should specify the amount of the proposed share increase.

The power to increase shares is given by the Companies and Allied Matters Act. A company having share capital, whether or not the shares have been converted into stock, may in general meeting and not otherwise, increase its share capital by new shares of such amount as it thinks expedient

The court held that before shares can be reduced, there must be provision in the articles of association authorizing reduction. It is not sufficient to provide for it in the memorandum alone.

The consent of creditors is normally required to a reduction of shares. However, where the creditor refuses to give it, the court may dispense with the consent if the company is willing to provide for the payment of the debt or claim.

Confirmation of Reduction of Share Capital

The court held that it will only exercise its discretion to confirm only if a reduction in shares is equitable and fair. If the court is satisfied that the creditors have duly consented to the reduction in shares, or that adequate provision has been made to discharge or secure their debts or claims, or that the debt has determined and the capital does not by the reduction fall below the authorized minimum capital, it may, by order, confirm the reduction in the share capital.

The court will exercise its discretion to confirm a reduction only if the reduction is fair and equitable but it is not concerned with the motive for the reduction. The court held that as the financial position of the company disclosed that the public would not be prejudiced by the proposed reduction, the reduction fell to be confirmed by the court. The court confirmed a reduction of the company's share capital which was to avoid the effects of a threatened nationalization.

The court will exercise its discretion to confirm a reduction only if the reduction is fair and equitable but it is not concerned with the motive for the reduction. The court confirmed the reduction of the share capital of the company in this case where it was to distribute accumulated profits in such a way as to avoid or diminish liability to tax and to provide for the payment of estate duty on the death of a large shareholder.

The court held that if reduction in shares is to be effected because of the loss of capital or because the capital is not represented by available assets, evidence of such loss and that the capital is not represented by available assets must be given. However, a reduction may be confirmed where capital has been lost but is still represented by available assets.

Where the reduction in shares in a company does not involve a diminution of the liability in respect of unpaid capital, the creditors are not concerned.

In the case, the court held that if preference shareholders have preference only as to dividend, a reduction of capital will be borne rateably by both the preference and ordinary shareholders.

The court held that preference shareholders are merely entitled to a fixed cumulative preference dividend on the amount paid on their shares such rateable reduction is not an alteration of the rights of the preference shareholders.

The court held that where preference shareholders are entitled to preference as to capital on winding-up, the ordinary shares could bear the loss first.

In this case, the court held that where capital is returned as surplus, it should be returned first to the class of shareholders who have priority as to capital in a winding-up.

In this case, the court held that where capital is returned as surplus, it should be returned first to the class of shareholders who have priority as to capital in a winding-up.

A reduction of capital which modifies the rights and is so sanctioned will be approved by the court unless it is unfair or the sanction is improperly obtained.

The court held that a reduction of capital which modifies the rights and is so sanctioned will be approved by the court unless it is unfair or the sanction is improperly obtained and that it is for the person who opposes a reduction to show that it is unfair.

In the case, it was held by the court that where, in reducing the share capital, a company does not comply with the provisions of the articles for varying the rights of members, the reduction of share capital will not be confirmed by the court.

The court will not confirm a reduction of the share capital of a company where the provisions of the articles for varying the rights of members are not complied with by the company.

Express provisions may be made in the memorandum or articles giving the holders of the shares the right to the arrears of cumulative undeclared preference dividend. The court held that where no express provisions are made, it is a question of construction whether they are payable on winding-up.

Unless otherwise provided, shares rank pari passu both in respect of the right to dividend and the return of capital.

The basic rule is that if no rights are specified in the articles, all shares rank pari passu, but if the rights attached to a class of shares are specified, the rights so set out are exhaustive.

The court held in this case that the articles of association of a company may provide for participation in the capital of a company. Participation in the capital means sharing in the surplus assets after all liabilities have been paid and shares have been paid in full.

The court stated in this case that when the rights of a class of shares are varied, it is not necessary to obtain the consent of another class which may be only indirectly affected by the variation.

The court in this case defined stock as simply a set of shares put together in a bundle. The term stock, in relation to a company, is used in various senses. It may mean the capital of the company, the aggregate of a number of shares severally owned by members, or even the incorporeal property which is represented by the holding a certificate of stock. In practice, the term is used to describe a set of shares notionally converted into a block.

Holders of stock can transfer the same or any part of it, in the same manner, and subject to the same conditions, as might, previous to conversion, have been transferred, or as near thereto as circumstances admit. The directors may, from time to time fix the minimum amount of stock transferable. However, such minimum must not exceed the nominal amount of the shares from which the stock arose.

While shares are issued directly, stock cannot be so issued. It is only issued shares which can be converted into stock and only if they are fully paid up. The court held in the case that any direct issue of stock is ultra vires.

The court held in this case that as a general rule, except provided by the Act, a company cannot issue its shares at a discount as it will amount to reducing its authorized share capital.

The court held that the general rule against issuing shares at a discount cannot be evade in some indirect way, but where shares are paid for, other than in cash, and the value of the property is lower than the nominal value of the shares, the court will not interfere unless the company has acted dishonestly.

The court held that where shares are paid for, other than in cash, and the value of the property is lower than the nominal value of the shares, the court will not interfere unless the company has acted dishonestly. In such a case, there is de facto issue at a discount.

The court defined what it means have an issue of shares underwritten. The court stated that the underwriting of an issue means that some financial institution such as a bank, insurance company or issuing house agrees to take so many shares, more or less in number, as are specified in the underwriting letter if the public do not subscribe for them.

The court defined underwriting an issue of shares as taking up by way of subscription in a new company or new issue a certain number of shares if and so far as not applied for by the public.

The underwritten agreement may take the form of a letter of acceptance by the underwriters or a formal agreement signed by both parties. Very often, when the underwriter is a company, it appoints one of its directors to apply in its name for the shares to be taken up.

An underwriter may, in order to protect itself, enter into an agreement with a sub-underwriter who, for a commission, relieves it of part of the risk it undertakes by the underwriting agreement. The court held in this case that a sub-underwriting contract is irrevocable.

The court held that brokerage of a reasonable amount paid by a company in the ordinary course of its business was legal and that the reasonableness of the commission does not depend on mere percentages but on what it would cost the company to sell the shares by itself.

An allotment of shares is made following an application for such allotment. In practice, an application is usually made in writing by the completion of a form addressed to the company. In the case, the court held that a completed application form for allotment of shares is only an offer which the company may accept.

In this case, the court stated thus, an allotment of the shares of a company made before the company is incorporated is invalid.

The court held that an application for allotment may be conditional but while a condition precedent may operate to entitle the applicant to repudiate, a condition subsequent or a collateral condition will not.

Allotment of shares is done when a new company is incorporated and the money paid for the allotment of shares goes to the company only to form part of its share capital. Once the share capital is paid for by allottees that is the end of allotment. Any person desirous of participating in such a company will not ask for allotment but for sale and transfer to him by a shareholder, the exception is when share capital is increased. As for transfer, this is a matter between the shareholder who wants to part with his shares and the purchaser or transferee. The money on transfer goes to the shareholder, not to the company. The company will only ratify by adjusting its books to reflect the new shareholder.

The court held that a person may apply for the allotment of shares through an agent. If the shares are allotted, that person may become a member of the company.

Where an application for the allotment of shares is made in a false or fictitious name, or in the name of a person who has no contractual capacity, the real name of the applicant or real applicant, as the case may be, may be entered on the register.

Where an application for the allotment of shares is made in a false or fictitious name, or in the name of a person who has no contractual capacity, the real name of the applicant or real applicant, as the case may be, may be entered on the register and such a real applicant will be liable provided there is in fact a contract.

Unless the application for allotment of shares is rejected by a company, the allotment of shares made and notified to an applicant creates a contract between the company and the applicant which takes effect on the date on which the allotment was made by the company. The court held in this case that an acceptance cannot be withdrawn after it is made by the company

The court stated in this case that acceptance by a company to allot shares to an applicant must be unconditional and in accordance with the offer, and must be made within a reasonable time.

An allotment of shares made and notified to an applicant is acceptance by the company of the offer by the applicant to purchase its shares.

The court held that the acceptance by a company to allot shares to an applicant must be unconditional and in accordance with the offer and must be made within a reasonable time.

An allotment of shares made and notified to an applicant is acceptance by the company of the offer by the applicant to purchase its shares.

The court held that where an application for allotment has been made, the acceptance must be unconditional and in accordance with the offer, and must be made within a reasonable time. In this case, the court held that the postal acceptance rule does not apply when there are express terms in the offer which exclude it, and this includes excluding it by implication where the offer specifies that acceptance must reach the offeror.

The court stated that where there is an application for allotment by a party and the company accepts to allot shares as applied for by the party, the communication of acceptance by the company to the applicant may be by letter of allotment or even by a letter demanding payment of calls on the shares.

The court held that where the allotment of shares to a party by a company is in issue, the minute book may be sufficient and adequate evidence to allotment.

The court stated in this case that in the allotting of a shares, directors are, as in all other matters, to act in good faith and the interest of the company. Where a director joins in allotting shares to himself, he is estopped from impeaching the validity of the allotment.

The court held that a company has the right to approve an allotment of shares made in bad faith by the directors of a company who had the power to allot the shares. Where an allotment of shares is made in bad faith by a director, it is voidable at the instance of the company and of no one else because it is a wrong done to the company; the company may, instead of avoiding the allotment, approve it.

A company limited by shares must, within one month, deliver to the Commission for registration, returns on its allotment of shares. The court however held in this case that the time for delivering the returns to the Commission may be extended by the court.

The object of a share certificate is to facilitate dealings with the shares by providing prima facie evidence of title. The court held in this case that a company cannot deny the truth of the statement as to the title in a share certificate where a third person acts on the certificate and thereby changes his position.

The court held in this case that a company cannot deny the truth of the statement as to the title in a share certificate where a third person acts on the certificate and thereby changes his position.

In this case, the court stated that where a person procures the granting of a share certificate on a forged transfer or forged power of attorney, he cannot take advantage of the estoppel that a company cannot deny the truth of the statement as to the title in a share certificate where a third person has acted on it, even if he acted in good faith.

The court held that a person who procures the granting of a share certificate on a forged transfer or forged power of attorney cannot take advantage of the estoppel that a company cannot deny the truth of the statement as to the title in a share certificate where a third person has acted on it, even if he acted in good faith.

In the case, the court stated that a company cannot deny the statement as to payment in a share certificate.

The court stated in this case that when shares are issued, a specified sum may be paid on allotment and the balance paid subsequently as and when calls are made and that an irregular call on shares is prima facie invalid.

The court held that when shares are issued, a specified sum may be paid on allotment and the balance paid subsequently as and when calls are made. An irregular call on shares is prima facie invalid.

When shares are issued, a specified sum may be paid on allotment and the balance paid subsequently as and when calls are made. The court held that an irregular call on shares is prima facie invalid.

An irregular call on shares may be validated where the articles contain provisions which validate the acts of the board or committee of directors notwithstanding that it is afterwards discovered that there was some defect in the appointment or that any of them was disqualified.

An irregular call on shares may be validated where the articles contain provisions which validate the acts of the board or committee of directors notwithstanding that it is afterwards discovered that there was some defect in the appointment or that any of them was disqualified.

The court held that when an irregular call on shares may be validated where the articles contain provisions which validate the acts of the board or committee of directors notwithstanding that it is afterwards discovered that there was some defect in the appointment or that any of them was disqualified.

In the case, a company purportedly made a call on the shareholders without giving the twenty-one days' notice required by its articles. The company went into liquidation and the liquidators sent letters to appellants demanding payment of the call. The court held that the call made by the company was invalid because proper notice had not been given.

It is not every trifling irregularity that will vitiate a call. The court held that where a call is made at a meeting at which the necessary quorum was not present, but confirmed by a meeting where the quorum was present as was in this case, such a call is valid

The court held that the power to make calls is a fiduciary one which must be exercised in the interest of the company and the general body of shareholders.

The power to make calls is a fiduciary one. The directors may require different amounts of calls to be made, but the power must not be abused. It was held in this case that directors should not make calls on others excluding themselves unless it is with the knowledge and sanction of other shareholders.

The court held that any arrangement to make differential calls ought to be made at the time of the issue of the shares otherwise it may be improper.

A call is deemed to be made at the time when the resolution authorizing the call is passed and it must be made according to the provisions of the articles. Thus, there must be a resolution specifying both the amount of call and the date of payment.

The court held that a call may be made prospectively by a resolution passed that a call be made on a specified later date and payable on a yet subsequent date.

The court held that the board of a company may validly at one meeting make two calls, each for the maximum amount, payable on different days where the amount of call is limited by articles.

Where a call is made and a shareholder fails to pay, the directors must take all reasonable steps to enforce payment and may forfeit the shares, but it will be a breach of trust for the directors to favor any of their number in such a matter.

The court held that a shareholder is not bound to pay an invalid call and may bring an injunction to restrain the director from forfeiting his share, and the court may make the order on the terms that the amount of the call be paid into the court.

The court held that a shareholder is not bound to pay an invalid call and may bring an injunction to restrain the director from forfeiting his share, and the court may make the order on the terms that the amount of the call be paid into the court.

Directors of a company may, if they deem fit, allow shareholders to make advance payment of calls on their shares. The court held that where payment in advance of call is made, the company cannot be compelled to pay back to the shareholder.

The court held that payment in advance of call made by a shareholder cannot be repaid to the shareholder neither can the company repay it without consent.

The court stated in this case that in the event of a winding up, a shareholder who made payment in advance will rank after other creditors but in priority to other shareholders.

The court held that where the articles of a company contain the right of lien without conferring the power of sale, the company can file a suit to enforce its lien. A shareholder may compel the company to assign its lien to a person who is willing to pay off the amount of the lien.

Usually, the articles of association of a company gives it power to nominate someone to execute the transfer (pursuant to a sale.

A lien on shares is enforceable by sale. The proceeds of the sale is received by the company and applied in payment of the amount on which the lien exists as is due and any residue is paid to the person entitled to the shares at the date of sale. The court held in this case that a lien may be enforced against any registered holder even if he is only a trustee.

The court held that a lien may be enforced against any registered holder even a trustee. However, the lien will not prevail if the company had notice of the trust before incurring the debt.

The court held that the death of a shareholder does not destroy a lien on shares. it may be enforced against his executors.

The court held that where a shareholder sells only part of his shares, the buyer may insist that the company must first pay itself from the shares not sold.

A power of forfeiture is in the nature of trust and must be exercised in the interest of the company and so where shares are forfeited to relieve shareholders of their liability as to their director's disqualification as was the case in this case, the court held the forfeiture invalid.

Forfeiture of shares is a deprivation of right, efforts made by a shareholder to avoid it will be given consideration by the court. In this case, the court held that a forfeiture was invalid where a cheque was sent for payment of call but was stated to be on protest.

The court held that where the articles provide that upon non-payment of calls or upon default in doing any act, shares becomes forfeited to the company, the default does not operate as a forfeiture ipso facto, but only at the option of the directors.

When forfeiture of shares is completed is a question which is dependent on the articles of a company. The court held that where it is provided by the articles that shares become forfeited upon non-payment of calls or upon default of doing any act, the default operates as forfeiture at the option of the directors.

When forfeiture of shares is completed is a question which is dependent on the articles of a company. Where it is provided by the articles that shares become forfeited upon non-payment of calls or upon default of doing any act, the default operates as forfeiture at the option of the directors.

The court held that when forfeiture of shares is completed is a question which is dependent on the articles of a company. Where it is provided by the articles that shares become forfeited upon non-payment of calls or upon default of doing any act, the default operates as forfeiture at the option of the directors.

When shares are forfeited, they become the property of the company and may be sold, re-issued or otherwise disposed of by the directors as they deem fit and, before the sale or disposition, the forfeiture maybe cancelled but this cannot be done without the permission of the person whose shares were forfeited

The court held that when shares which are forfeited are sold, the purchaser of such shares becomes liable for future calls on the shares.

In the case, the court held that shares are in the nature if personal property and are transferrable in the manner provided in the articles of association of the company. See Section 175 CAMA.

The transfer of shares is therefore restricted in the manner allowed by the articles of association of a company.

The court held that a surrender of shares may be accepted if it is intended to avoid going through the formalities of forfeiture. The articles of association of a company may authorize the directors to accept a surrender of shares in the circumstance where forfeiture will be justified.

Where shares are partly paid for and not liable to forfeiture, they cannot be surrendered because this will release the shareholder from further liability in respect of the shares and amount to purchase by the company of its own shares and a reduction of capital without the sanction of the court.

The court held that a person who has capacity to be a member in a company also has, as a general rule, the capacity to transfer his shares and, in a number of cases, the transfer, even by infants, have been valid

The court held that unless the contrary is proved by evidence, a contract for the sale of shares not readily available in the market such as government stock may be enforced by an order of specific performance.

Restrictions on the transfer of shares are a derogation from the common law right of free transfer, the exercise of the power will be construed strictly and any deviation from the powers laid down will be fatal.

The articles of a private company often contain a pre-emption clause requiring that no share is transferred to a non-member unless no member can be found to purchase them at a fair price to be determined in accordance with the articles, or that the member should inform the directors of his intention to sell shares, the number of shares, their price, and the name of the proposed transferee and that they should be offered first to a member. The court held in this case that where no member is willing to buy, the shares may be sold as proposed.

The articles of a private company often contain a pre-emption clause requiring that no share is transferred to a non-member unless no member can be found to purchase them at a fair price to be determined in accordance with the articles, or that the member should inform the directors of his intention to sell shares, the number of shares, their price, and the name of the proposed transferee and that they should be offered first to a member. The court held in this case that where no member is willing to buy, the shares may be sold as proposed.

The court held that in the valuation of shares, it should be assumed that the sale is between a willing seller and a willing and prudent buyer in a market where no buyer is excluded, but nevertheless subject to the articles of association of the company.

The court held that where the directors have a discretion whether or not to register a transfer, they must, nevertheless, act bona fide and not oppressively, capriciously or corruptly of for any other mala fide reason.

The court held that before any person can properly claim to be aggrieved by the refusal of a director to register a transfer of shares, such person must show that the directors have actively exercised their power to refuse to register a transfer by refusal to register the transfer of shares and that the refusal was the decision or resolution of the Board of Directors of the company.

Where directors have a discretion whether or not to register a transfer of shares, they must act in good faith. If in the exercise of the discretion whether or not to register a transfer of shares, the directors refuse to register a transfer, the court will not interfere unless they did not act bona fide and they need not give any reason for their refusal.

The court will consider it sufficient if the directors before exercising their power of refusal to register a transfer of shares considered the matter fairly and acted in good faith in the interest of the company and with due regard to the right of the shareholder to transfer his shares

Where the articles of association of a company gives the directors power to decline the registration of transfer of shares on certain grounds but without assigning reasons, the directors may, subject to the articles, be interrogated as to the grounds on which they refused registration but not as to the reason for refusal.

Where the articles of association of a company gives the directors power to decline the registration of transfer of shares on certain grounds but without assigning reasons, the directors may, subject to the articles, be interrogated as to the grounds on which they refused registration but not as to the reason for refusal.

Directors have the power to refuse to register the transfer of shares. Directors may in the exercise of this discretionary power to refuse to register a transfer of shares refuse to register a person who is already a member of a company.

The right to refuse registration of a transfer of shares must be formally and positively exercised before registration can be refused. The court held in this case that where a director deliberately absents himself from the board meeting so that a quorum was not formed and the consent required by the articles could not be given, the transferee was entitled to be registered.

The power of directors to refuse to register a transfer of shares must be exercised without delay. The court held in this case that a delay of four months was unreasonable.

The court held that where the company unreasonably fails to register a transfer, the transferee may apply to the court to rectify the register of members by substituting his name for that of the transferor.

The court held that where the directors have had sufficient time to make a decision, the absence of any formal exercise of the power to decline entitles the shareholder to be registered.

The court held that where directors have a discretion to register a transfer of shares, they must, nevertheless, act bona fide being that directors cannot be required to give reasons to justify their decision not to register a transfer.

The court held that where the articles contain a provision that directors may, in their absolute discretion, decline to register any transfer of any share, drafted in the widest possible terms, there is no limitation to the exercise by directors of the power other than the standard requirement that, as a fiduciary power, it must be exercised bona fide in what they consider to be in the interest of the company and not for any collateral purpose.

Notwithstanding anything in the articles of association of a company, it is not lawful for a company to register a transfer of shares in the company unless a proper instrument of transfer has been delivered to the company. Thus, in this case, the court held that the articles cannot provide that a widow shall be registered as the owner of shares where no transfer has been completed.

The common form of transfer of shares which is by an instrument of transfer is to be executed by both the transferor and transferee. The court held that execution however, does not mean that the instrument must be by deed sealed and delivered. Where execution in writing only is sufficient, the fact that it is under seal does not render it ineffectual.

A company will issue a new certificate and cancel the original certificate whose shares are split. The court held that a certificate is not a negotiable instrument and where a company negligently returns it to the transferor who committed a fraud therewith, the company may be liable to the transferee for any loss suffered thereby, but not anyone else.

As a matter of practice, the company which receives a transfer for registration will normally write to the transferor informing him of the proposed transfer and stating that it will be registered unless he objects. It was held by the court, however, in this case that the failure to reply to such a letter will not stop the transferor from denying the validity of the transfer.

The court held that where a forged transfer is registered by a company, the true owner can compel the company to restore his own name on the register, and such owner is entitled to be paid the dividends accruing to the shares.

The court held that where a company registers a forged certificate and discovers the forgery, it may, on its own, remove the name of the forger from the register and is not estopped from doing so by the registration

The court held that where a company has issued a share certificate to the transferee who forged the transfer and a bona fide purchaser from him has acted on the certificate, the company will be liable in damages.

The court held that a company will not be liable where a share certificate has been issued to a transferee who forged the transfer and sealed fraudulently by the secretary without the authority of the company.

The court stated that where a company, without notice, registers a forged transfer and sustains any loss, it is entitled to indemnity from the person who sent the forged transfer for registration and from an agent who sent it.

The general contractual relationship exists between the vendor and purchaser of shares. Where the contract for purchase of shares has been entered into and before the registration, the transferee holds the equitable title to the shares while the transferor still holds the legal title to them but as trustees for the transferee, who becomes a legal owner when his name is entered in the register, the transferor is, so far as concerns the company, deemed to remain the holder of the shares.

The court held in this case that the mere execution of a transfer of shares without more does not pass the title in shares and after a transfer has been executed but not registered, a subsequent transfer made to another party is effectual, and if registered, may pass the shares to the latter party although if the first party was a purchaser for value, he can restrain the registration of the transfer by the second party.

Where a transfer is not registered, the vendor is entitled to receive any dividends or other benefits declared on the shares subject to any relevant provision of the contract, for example whether the shares were bought "ex" or "cum" dividend or rights.

Where a transfer is not registered, the vendor is entitled to receive benefits declared on the shares. However, where there is no special agreement, the purchaser is entitled to dividends or other benefits declared after the date of the contract.

Where a transfer of shares is not registered, the vendor is liable to pay calls but must be indemnified by the purchaser unless there is an agreement to the contrary.

Where a transfer of shares is not registered, the vendor is liable to pay calls but must be indemnified by the purchaser unless there is an agreement to the contrary.

Where a person transferred shares he held in a company but died before perfecting the transfer, the transfer becomes invalid. In the case, shares were transferred, but before the approval of the Securities and Exchange Commission could be obtained as was required, the transferor died. The court held the transfer invalid.

In the case, the court held that a shareholder who has sold all his shares in a company is no longer a member of the company and so has no right to exercise as a member of the company.

In this case, the laid to rest the question of priority where two persons claim the same shares but none of their titles is registered. The court stated that where neither of them is registered and both rely on their equitable title, the person whose title is first in time has priority.

Where two persons claim the same shares, the question of priority arises. In the unlikely event that both are registered, the person who registered first has priority which is however subject to any right of either party resulting from fraud, mistake or vitiating circumstance. If one of them is registered and the title of the other is equitable, the person whose name is on the register has priority.

The court held that on the death of a shareholder, his shares are vest in his personal representatives by the operation of the law.

This is known as transmission of shares and the production of probate or letters of administration is sufficient evidence of grant. Transmission of shares also applies in bankruptcy.

The court held that any person who becomes entitled to a share in the consequence of the death or bankruptcy of a member may, on production of evidence as the directors may require, elect to be registered himself as the holder of the share or may have someone nominated by him registered as the transferee of the share.

A person entitled to a share by reason of the death or bankruptcy of the holder is liable for call on the shares, but these are payable out of the estate of the deceased shareholder whether the calls were made in his life time or after his death as long as the shares are in his name.

A person entitled to a share by reason of death or bankruptcy of the holder is entitled to the same dividends and advantages. Unless the articles of the company otherwise provide, he cannot, before being registered as a member in respect of the share, exercise any right conferred by membership in relation to meetings of the company.

A mortgage gives the lender complete security and he is entitled to dividends and to vote in respect of the shares unless otherwise agreed.

Mortgage of shares involves the transfer of the legal title in shares to a mortgagee as security for an advance. The share certificate, transfer form and mortgage deed are given the mortgagee who will be registered with the shares. The mortgage deed provides for retransfer of shares on redemption.

An order of court is necessary in the case of default to effect a sale or foreclosure where the mortgagee has equitable mortgage on the shares of the mortgagor.

Equitable mortgage involves no more than the deposit of the share certificate with the mortgagee by the mortgagor, whom is often a bank. On the other hand, the more usual method is the deposit of a share certificate with the mortgagee together with a blank transfer.

The court held that there is an implied power to sell the shares if the mortgagor defaults in paying the loan as agreed or within a reasonable time after notice if no time was specified.

Where a mortgagor defaults in paying the loan advanced, the mortgagee may sell the mortgaged shares to recover the advance. The court held that the mortgagee may complete the transfer with the name of a transferee or, if he has a power of attorney, he may execute a transfer on behalf of the mortgagor in favour of a transferee.

The court held in this case that a mortgagor must not delay the registration of the transfer where the mortgagee sells the shares to a third party on his default.

The court held that a holder of a blank transfer as security has the right, unless otherwise disentitled, to fill in his name and register the transfer.

The court stated the disadvantage of equitable mortgage in this case. The court stated that the disadvantage of an equitable mortgage is that the mortgagor remains the registered on the register and is entitled to exercise the powers of a member although he must exercise his voting rights at the direction of the mortgagee.

The court held that the definition of a private company under the Companies Act does not preclude a private company from being treated as a public company for the purpose of the Judgment Enforcement Rules.

The court held that the definition of a private company under the Companies Act does not preclude a private company from being treated as a public company for the purpose of the Judgment Enforcement Rules.

In this case, the court held that if a garnishee order is made absolute, in the case of a judgment debtor who has shares in a company, where the shares are attached, the judgment creditor in favor of whom the order is made will have the same remedies for enforcing the charge as if it were a valid charge effectively made by the judgment debtor, but the remedy of the creditor in favor of whom the order is made is sale, not foreclosure.

The court stated in this case that the criterion for determining what amounts to financial assistance under the provision of Section 159(2), now Section 183(1) (b) CAMA was to decide on the basis of the whole transaction where the net benefit lay, so that, if it lies with the company, there is no breach.

Section 183(1) (b) CAMA provides that where a person has acquired shares in a company and any liability has been incurred (by that or any other person), for the purpose of this acquisition, it is shall not be lawful for the purpose of its subsidiaries to give financial assistance directly or indirectly for the purpose of reducing or discharging the liability so incurred.

The criterion for determining what amounts to financial assistance under the provision of Section 159(2), now Section 183(1) (b), CAMA was to decide on the basis of the whole transaction where the net benefit lay, so that, if it lies with the company, there is no breach.

Section 183(1) (b) CAMA provides that where a person has acquired shares in a company and any liability has been incurred (by that or any other person), for the purpose of this acquisition, it is shall not be lawful for the purpose of its subsidiaries to give financial assistance directly or indirectly for the purpose of reducing or discharging the liability so incurred.

At common law, where the transaction of a company in respect of its shares is illegal, any security given for the financial assistance given by the company is void and cannot be enforced by a lender.

The court held that where the transaction of a company in respect of its shares is illegal, any guarantee supporting the invalid agreement is void.

Where the transaction of a company in respect of its shares is illegal, any guarantee supporting the invalid agreement is void unless the purchase can be separated from the security.

The position of a shareholder in a company is that he has property in his shares. The court held that a shareholder's interest, title or property is in his shares, not in the tangible or intangible property of the company.

The court held that no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. A shareholder is entitled to share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up.

A shareholder has no property in, nor right to, any particular asset. He has only the right to have all the assets administered by the directors in accordance with the constitution of the company.

The court in the case defined debentures as a document which either creates a debt or acknowledges it and any document which fulfills either of the conditions is a debenture.

When a company borrows money, it may give a written acknowledgement to the creditor to evidence that the company is owing the money. The document will usually show the terms of the loan and the mode and date of payment. Such document is referred to as a debenture.

A denture can be executed to last for many decades as a company has perpetual succession, not dependent on the death of its shareholders or directors.

A company can raise money on debentures. A debenture is essentially a mortgage; a mortgage being a security which an individual executes. A debenture does not seize to exist at the death of the shareholders or directors of a company.

The court held that a trading company has an implied power to borrow money for the purposes of its objects unless prohibited by its memorandum or articles of association or by statue.

The court held that at common law, a company having power to borrow money for carrying on its business or objects may secure the repayment of the money borrowed by mortgage or by charge of all or any of its property, real or personal, present or future.

The court held that a company having power to borrow money for carrying on its business may secure the repayment of the money borrowed by a charge on its uncalled capital.

Where the directors of a company borrow money in excess of the power given by the articles of association, the debentures are void.

A company may borrow money by a charge on its uncalled capital where the memorandum or articles expressly or impliedly allow the uncalled capital to be charged.

Where the directors of a company borrow money in excess of the power given by the articles of association, the debentures are void and the directors may be held personally liable in damages for a warranty of authority to issue the debentures. Such an act, since it is not ultra vires the company, may be ratified by it.

Where the directors of a company borrow money in excess of the power given by the articles of association, the debentures are void and the directors may be held personally liable in damages for a warranty of authority to issue the debentures.

The court in this case stated that, since debentures are not part of the share capital of a company, they can be issued at a discount. Debentures are issued according to the provisions of the memorandum and articles of association. If debentures are to be issued to the public, a prospectus must be issued.

The power of a company to issue debentures ceases on winding-up, but the company can allot the rest of a series issued before winding up.

A contract with a company to take up and pay for any debentures of the company may be enforced by an order of specific performance.

A debenture taken on a mortgaged property is subject to the mortgage. Although it is possible to create an unsecured or naked debenture, the normal mode of creating a debenture is by charging the property of the company through the debenture or trust deed or both. Such debentures may be secured on fixed assets, or the floating assets of a company or both. Debentures which are secured on a fixed charges are often described as mortgage debentures and where a debenture is secured on a mortgaged property, it is subject to the mortgage.

In this case, the court described a floating charge as ambulatory and shifting in nature, hovering over and, so to speak, floating with the property which it is intended to affect until some event occurs or some act is done which causes it to settle and fasten on the subject of the charge within its reach and grasp.

When a floating security on the assets of the company becomes fixed, it constitutes a charge upon all the assets then belonging to the company and has priority over any subsequent equitable charge and other unsecured creditors.

Where a company has created a floating charge, it cannot create another floating charge over the same property ranking in priority or even pari passu with the original charge unless the original charge authorized it.

In addition to fixed assets which have priority over floating charges, the court has held the rights of an execution creditor where before the crystallization of the floating charge, the goods are sold by the sheriff.

In addition to fixed assets which have priority over floating charges, the court has held the rights of an execution creditor where before the crystallization of the floating charge, the sheriff is paid off sale.

In addition to fixed assets which have priority over floating charges, the court has held the rights of an execution creditor where before the crystallization of the floating charge, the creditor obtains a garnishee order absolute.

In addition to fixed assets which have priority over floating charges, the court has held the rights of a vendor of goods under a hire purchase agreement as having priority.

The court held that where a company creates a charge on its property, the company must within days of such creation deliver to the Commission for registration certain prescribed particulars of the charges, one of such being, a charge on the book debts of the company which are the debts being owed to the company and properly accounted for in its books.

The court held that the failure to register a charge will render it void against the liquidator and any creditor of a company but the obligation to pay the debt is not thereby discharged.

The Supreme Court considered the effect of the Land Registration Act on a debenture creating a floating charge on all the property of a company including its land. The question for determination was whether the debenture created an interest in land and could be admitted in evidence if not registered under the Land Registration Act. The court held that a debenture does not create an interest in land within the meaning of Section 15 of the Act so as to create a registrable instrument.

Every company must, after the allotment of any of its debenture or after the registration of the transfer of any debentures, deliver to the registered holder, the debentures or a certificate of the denture stock under the common seal of the company.

The court held that since a registered debenture is a choice in action and not negotiable, it is subject to equities so that the transferee takes subject to any claims which the company may have against any prior holders.

A registered debenture is a choice in action and not negotiable, it is subject to equities so that the transferee takes subject to any claims which the company may have against any prior holders. The court held that where it is avoided by express provision in the indorsed conditions, a transferee is not entitled to the benefit of such a provision unless he is a registered holder of the debenture.

A registered debenture is a choose in action and not negotiable, it is subject to equities so that the transferee takes subject to any claims which the company may have against any prior holders. It is usual, however, to provide for payment of the principal and interest to the registered holder free of equities. The court held in this case that where the debentures contain such a clause, a transferee from a delinquent director was entitled to be paid in full.

The power of sale by a debenture holder is exercised where there is express power of sale contained in the trust deed. The court held that the sale of the company's business by a debenture holder operates to determine the contracts of service of employees.

Foreclosure may be claimed and granted in a debenture holder's action. The court held that the order of foreclosure in a debenture holder's action is the same as for any mortgage, and the order of foreclosure may extend to the uncalled capital of the company.

The court will not make an order of foreclosure in a debenture holders' action unless all the debenture holders or every class are parties to the action but the court may order sale instead of foreclosure if it considers it just to do so.

The court held in this case that, where a receiver is appointed by a debenture holder or mortgagee in pursuance of the power in a debenture, the appointment cannot be challenged by the minority shareholder.

The court held that when a receiver is appointed by the court, since he is an officer of the court, any interference with him as such or with his possession of the property of which he is appointed a receiver is a contempt of court.

Where a receiver is appointed by the court, no action can be brought against him or in respect of the property in his hand without the leave of court and he is entitled to indemnity in priority to the debenture holders.

The court may rectify, on application, an omission or misstatement of particulars of a charge or memorandum of satisfaction if it was accidental or due to inadvertence, or some other sufficient cause or is of a nature not prejudicial to the company or creditors, or it is just and equitable to do so.

The court held that a person who subscribes to the Memorandum of Association of a company at incorporation automatically becomes a member of the company.

Subscribers are persons who sign the memorandum and articles of association of a company. They must together subscribe to shares amounting in value to the minimum share capital stated in the memorandum to be registered. On the registration of the company, the subscribers are deemed to have agreed to become members and their names must be put on the register of members. See Section 105(1), Section 124 CAMA.

In the case, the court stated categorically that it is not enough for a party to agree to become a member of a company. Until his name is entered on the register of members or a share certificate issued in his favor or other acceptable indicia of ownership are established, such person cannot pretend to have any interest in the company.

The court held that an allottee of shares has a mere equitable interest in the allotted securities but does not graduate to a shareholder until his name has been entered in the register of shares.

The court held that a share certificate is not the only means of establishing shareholders and that even oral evidence, if cogent, will suffice.

The court held that until the name of a transferee of shares is entered in the register of members in respect of the transferred shares, the transferor is, so far as concerns the company, be deemed to remain the holder of the shares.

While a member of a company registered with shares must be a shareholder of the company, the converse is not necessarily true as a shareholder will not become a member until his name is on the register.

Where a there is an implied condition that shares are to be paid for within a reasonable time after allotment, a shareholder will be held to have lost any right to the shares.

The court held that the membership of a company creates rights and obligations in the member in relation to the company, depending on the quantum and nature of the member's proprietary interest in the company.

The court held in this case that the contract of a person under the age of eighteen to take shares in a company is voidable at his own instance any time before he attains eighteen years of age or within a reasonable time and if he so repudiates, he cannot recover the money paid for the share unless there has been a total failure of the consideration for which the money was paid.

An infant cannot join in the formation of a company or be a subscriber to the memorandum of association unless there are at least two other subscribers not disqualified from joining in forming a company. The court held in this case, that an infant loses the right to repudiate a contract to take shares in a company if the company is wound up unless the liquidator agrees

On the registration of a company, a subscriber is deemed only to have agreed to become a member of a company and his name must then put in the register of members as a member. The court held that a subscriber may be liable as a member even though his name is not on the register.

On the registration of a company, the subscribers are deemed only to have agreed to become members of a company and their names must then put in the register of members as members. A subscriber may be liable as a member even though his name is not on the register. The court held that no allotment is required in the case of a subscriber.

The court held that a subscriber must take and pay for all the shares subscribed by him when calls are duly made and he must take them from the company.

The court held that if a subscriber takes equivalent shares from another member, he is nevertheless still liable to pay for the shares for which he subscribes.

The court held that the allotment and membership of a company is based on a contract which like any other contract involves an offer and an acceptance. Thus, there must an agreement to become a member and an entry in the register.

Where, following an application by a person, shares are allotted to him, and his name is entered in the register of members of the company, he becomes a member of the company.

The court held that a person does not become a member of a company until his name has been entered in the register of the company.

The court held that a person does not become a member of a company until his name has been entered in the register of the company.

In this case, the court distinguished between a shareholder and member of a company limited by shares and also observed that entry in the register of the company is another method of proof of being a shareholder, but is not the only method nor can the absence of that method of proof invalidate other methods.

The court held that a company is not concerned with the equitable beneficiaries of shares and is entitled to deal only with the registered owner even if he is a trustee of the shares for another.

The court held that it is the trustee whose name is on the register of the company that is considered the shareholder, not the beneficiary.

The court held that where a trustee's name is on the register as a shareholder, the trustee and not the beneficiary, is the person liable to the company for all payments and obligations attaching to the shares.

The court held that where a trustee's name is on the register as a shareholder, the trustee and not the beneficiary, is the person liable to the company for all payments and obligations attaching to the shares and his liability is not limited to the amount of the trust estate.

Where a trustee's name is on the register as a shareholder, the trustee and not the beneficiary, is the person liable to the company for all payments and obligations attaching to the shares and his liability is not limited to the amount of the trust estate. Where there are several trustees, each is liable for the total amount, and not pro rata.

The court held that where a person buys shares in the name of an infant whose name is entered in the register, the company can only deal with the infant and not the person for whom he is a nominee.

The court held that while between the company and the trustee, the latter is the shareholder, as between the trustee and the beneficiary, the beneficiary is the shareholder, and accordingly is liable to indemnify the trustee against all liabilities attaching to the shares.

The trustee must exercise his voting power as the beneficiary desires and in the absence of such a wish, the trustee must do so in the best interest of the beneficiary.

The court held that any member or, with the permission of the company, any other person, may require a copy of any part of the register on payment of a fee and the company must send it to him within ten days after the request, but a person inspecting the register of members has no right to take a copy himself.

The court held that a company cannot refuse a shareholder's inspection of the register on the ground that he is the solicitor of parties engaged in litigation against the company, although it must be stated on affidavit and not denied that the inspection is required in the interest of his client and is not in the interest of the company or any member of the company as such.

The court held that a member applying for inspection of the register of members of a company need not state the purpose for which he needs it.

A member applying to inspect the register of members is not obliged to state the reason for it. The court held that the fact that the member is actuated by motives hostile to the company is no defense to his legal right to inspect the register.

The court held that there is no defense to the right of a member of company to inspect the register of the members of the company except in suit in which he purports to sue on behalf of the shareholders.

The court held that where the information required by a member applying for an inspection can only be described by reference to something which is neither bound to be, nor is, on the register, the person requiring it cannot, by purporting to exercise his right, compel the company to divulge the contents of other documents which by the articles he has no right to see.

The court held that the register of a company may be rectified where it is shown that the name of any person without sufficient cause was entered into the register of members of a company.

The register of a company may be rectified where it is shown that the name of any person was omitted from the register of members of a company. The court held in the case that for a person's name to be put on the register of members, such person must be a member as required by law.

RECTIFICATION OF REGISTER OF MEMBERS OF A COMPANY.

The court held in this case that where the entry of a shareholder's name into the register of members has been induced by fraud, the remedy is restitution and restitutio in integrum.

The court held that for an applicant who seeks the rectification of the register of members on the grounds of fraud to succeed, he must show that the misrepresentation is material and constitutes the inducement to take shares.

The court held that an application to the court for rectification of the register of members can be made by originating motion and must be made promptly.

The court held that the rectification of the register of a company can be made on the grounds that the inclusion of the name of a shareholder in the register of members is illegal.

Where a company for improper reasons neglects to register a transfer of shares, the court can rectify the register of members on such grounds.

Where a company improperly forfeits its shares, the court can order a rectification on such grounds.

The court can order a rectification of the register of members where it is shown that shares were irregularly or improperly allotted.

The court has the discretion whether or not to rectify the register of members.

The court held that where a person makes an application to the court that the register of members be rectified, the court has a discretion whether or not to rectify the register.

The court held that where a person makes an application to the court that the register of members be rectified, the court has a discretion whether or not to rectify the register.

The grant of the application by a person for the rectification of the register of the members of the company is subject to the discretion of the court. The court may choose to rectify the register or not based on the circumstances of the case.

The court held in this case that it will not have power to rectify the register of members of a company where the directors have a discretion to decline registration but have not yet exercised the power.

Where a transfer of shares is made, it is to be presented to the directors for registration and barring any objection, the confirmation of the registration is expected to be done at the first meeting at which, in the ordinary course of business, it can be confirmed that the transfer should be registered.

The court held that by being registered as a shareholder of a company, the registered holder becomes entitled to certain rights, benefits and privileges. Except as otherwise provided for by the law and the provisions of the memorandum and articles of association of the company, the shareholder has the right to sell, mortgage or otherwise dispose of his shares, receive dividends and keep the dividends so received for his own use.

In the case, the court held that the right to have a proper notice of a meeting and to have a meeting held with a prescribed quorum to take valid decisions is a right of the individual and not of a corporate nature.

The court held that a member of a company does not require the consent or approval of any member to sue where there is a breach of his individual right. A member has the right to sue in his personal capacity where there is a breach of his individual right.

The court held that that members of a company are entitled to enjoy and exercise rights to their personal advantages, rights attached to their shares.

The court held that shareholders in a general meeting are entitled to consider their own interests and to vote in any way they honestly believe proper in the interest of the company subject to equitable considerations.

The court held that shareholders of a company are entitled to vote in any way they wish subject to equitable considerations which would make it unjust to exercise the right in a particular way.

The court held that the dividing line between personal and corporate rights is very hard to draw, and that the court will incline to treat a provision in the Memorandum or Articles as conferring a personal right on a member only if he has an interest in its observance distinct from the general interest which every member has in the company adhering to the terms of its constitution.

The court held that a member may by application for injunction or declaration restrain the company from entering into any transaction which is illegal or ultra vires.

The court held that where a company purports to enter into a transaction which is illegal or ultra vires, a member may by application for injunction or declaration restrain the company from entering into such transaction.

The court held that a member may by application for injunction or declaration restrain the company from purporting to do by ordinary resolution an act which by its constitution is required to be done by special resolution.

The court held that a member may by application for injunction or declaration restrain the company from ratifying by a wrong procedure, an act which is itself wrong.

The court held that a shareholder may by an application for injunction or declaration restrain the company from committing fraud on the company or the minority shareholders.

The court held that a shareholder may by an application for injunction or declaration restrain the company from committing fraud on the company or the minority shareholders.

In the case, the directors diverted to themselves a contract which should have gone to the company and later purported to ratify their act at a general meeting.

The court held that a shareholder may by an application for injunction or declaration restrain the company from committing fraud on the company or the minority shareholders.

In the case, the directors and controlling shareholders made an ill-motivated gift of the property of the company to third parties.

The court held that a shareholder may by an application for injunction or declaration restrain the company from committing fraud on the company or the minority shareholders.

The court held that where directors have negligently benefited themselves at the expense of the company, a shareholder may seek redress by an application for injunction or declaration against the company.

The court held that a shareholder may by an application for injunction or declaration restrain the company from committing fraud on the company or the minority shareholders.

The court held that where there is an abuse or misuse of power by the majority, a shareholder may seek redress by an application for injunction or declaration against the company.

The court held that the principle in Foss v. Harbottle is founded on the rationale that since the rectification of the wrong or irregularity is intra vires the company or association which can rectify the act complained of, by the majority who have the power to do so, it is an idle exercise for the court to interfere. The ultimate authority being the decision of the majority, it can always get its wishes done. Hence such actions concerning wrongs to the company, the company and not any other person is the proper plaintiff.

The court held that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights, interests to which alone, it is entitled. If it is defrauded by a wrongdoer, the company itself is the one to sue for the damage. Such is the rule in Foss v. Harbottle. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again the company is the only person who can sue. But where the company is defrauded by insiders who control its affairs -- by directors who hold majority of the shares -- the question becomes who then can sue for damages? The director themselves are the wrongdoers, if a board meeting is held, they will not authorize the proceedings to be taken by the company against themselves. If a general meeting is called, they will vote down any suggestion that the company should sue themselves. Yet the company is the one person who is damnified. It is the one person who should sue. In one way or another, some means must be found for the company to sue. Otherwise the law would fail in its purpose. Injustice would be done without redress.

The court held that no action may be brought by a member of a company on behalf of the company unless the court is satisfied that it appears in the best interest of the company that the action be brought, prosecuted, defended or discontinued.

The court held that a shareholder cannot bring a derivative action if his conduct is such as to disqualify him as in this case, where the shareholder was party to the wrong about which he complained.

In this case, the court considered the meaning of "oppressive conduct" and stated that oppression occurs when shareholders, having a dominant position in a company, either exercise that power to procure that something is done or not done in the conduct of the company's affairs or procure by an express or implicit threat of the exercise of that power that something is not done in the conduct of the company's affairs, and when such conduct is unfair or burdensome, harsh and wrongful to the other members of the company or some of them, and lacks that degree of probity which they are entitle to expect in the conduct of the company's affairs, oppression must import that the oppressed are being constrained to submit to something which is unfair to them as a result of some overriding act or attitude on the part of the oppressor

The court explained in this case that the nature of oppression or fraudulent conduct of the majority must be harsh, burdensome and wrongful before the minority can apply to the court for relief on the grounds of oppressive or unfairly prejudicial conduct.

The court held in this case that negligence in conducting the affairs of a company, or lack of business ability or inefficiency does not amount to oppressive or unfairly prejudicial conduct on the minority.

The court held that the test of whether a conduct is unfair is objective and there is no need to show conscious knowledge on the part of the controller that it was unfair, or any other evidence of bad faith.

It was held by the court that a petition on the grounds of unfairly prejudicial conduct may be founded on the basis that an act has been proposed which, if carried out, would be unfairly prejudicial to the petitioner, even though at the time of the hearing there was no current proposal to do the act in question.

It was held that it is not enough merely to allege that a conduct is unfairly prejudicial or illegal. The circumstances of the oppression or illegality must be shown.

The court held that a petition as envisaged under Section 311, now Section 353 CAMA which is an application for relief on the ground that the affairs of a company are being or have been conducted in an illegal or oppressive manner, need not be advertised unless there is last resort to winding up.

The court held that it was perfectly within its jurisdiction to interfere by injunction to prevent the continuance of the state of things where one director was pulling one way and two directors the other way.

The court held that before an injunction is granted in an action brought on the grounds of unfairly prejudicial conduct, the applicant must show that the act complained of affects him personally as a member of the company and that he was not himself guilty of the irregularities complained of.

It was held that where a member of a company makes an application for interlocutory injunction in action to remedy unfairly prejudicial conduct, he must show that irreparable damage will be caused by failure to make the order.

It was held that a "Tomlin Order" will not be made where a petitioner seeks compulsory winding up of a company in an action on the grounds of unfairly prejudicial conduct.

A "Tomlin Order" is otherwise known as compromise order. Under section 201 of the Companies Act, 1968, an application could be compromised and an order made staying a petition pending the implementation of the compromise agreed by the parties.

The court considered the background for the appointment of inspector sin this case. The court stated that it sometimes happens that public companies are conducted in a way which is beyond the control of the ordinary shareholder. The majority of the shares are in the hands of two or three individuals. These have control of the company's affairs. The other shareholders know little and are told little. They receive the glossy annual reports. Most of them throw them into the wastepaper basket. There is an annual general meeting but few of the shareholders attend. The whole management and control is in the hands of directors. They are a self-perpetuating oligarchy; and are virtually unaccountable. Seeing that the directors are the guardians of the company, the question is asked: quis custodiet ipsos custodies? Who will guard the guards themselves? It is because companies are beyond the reach of ordinary individuals that the legislation has been passed so as to enable the Department of Trade to appoint investigators to investigate the affairs of a company.

The court held that the liability of a member in a company limited by shares is limited and he cannot be compelled to take more shares than he had already taken or agreed to take and described the right to limitation of liability of a member of a company as individual right of membership.

The court held that the right of a member of a company not to take or subscribe for more shares then held at the date on which he became a member deals with the right of a member qua member of a company, and does not apply to the right of a member to take an additional liability from another member or a third party, and such agreement need not be in writing.

The court held that the liability of members of a company must be defined by the memorandum of association of a company and any provisions in the articles of association of a company by which liability is limited to the prejudice of creditors in a way inconsistent with the memorandum of association is void.

The court marked the concept of a company by anthropomorphism it stated that a company may in many ways be likened to a human body. It has a brain and nerve center which controls what it does. It also has hands which hold tools and acts in accordance with directions from the center. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are the directors and managers who represent the directing mind and will of the company, and control what it does. The state of the mind of these managers is the state of the company and is treated by the law as such.

The position of the law by this case is that while a company is not an agent of its shareholders or directors or employees, the chairman or director of a limited liability company is an agent of the company.

The court held that directors of a company are not employed by the company and are therefore not as such employees of the company.

It was held in the case that directors are not employees of a company, neither are they servants or members of staff of the company.

Directors of a company are officers of the company for the purpose of making the company vicariously liable for their negligence while engaged in the business of the company.

It was held in the case that directors are not employees of a company, neither are they servants or members of staff of the company.

In this case, the court stated that a director of the company is, in the eyes of the law, an agent of the company for which he acts for and the general principle of the law of principal and agent will apply. Thus, where a director enters into a contract in the name of or purporting to bind the company, it is the company, the principal, which is liable on it, not the director.

The court held that the true position of directors is that they are merely commercial men, managing a trading concern for the benefit of themselves and all other shareholders in it.

The court held that directors as trustees, have control of the company's property to be applied for the purposes specified and in the interest of the company.

The court held that directors are trustees for the company and not for individual shareholders of the company.

The court held that directors of a company are trustees for the company and not for third parties who have contracted with the company.

The court held that a director stands in a fiduciary relationship towards the company and must observe utmost good faith towards the company in any transaction with it or on its behalf.

The court held that a nominee director's duty as a director of a company is to the company and not to the person whose nominee he is.

The court held that the duty of a nominee director is to the company and not the person who nominated him. He is not absolved of this duty by the existence of an agreement between him and the person who nominated him.

The court held that the duty of a nominee director is to the company and not the person who nominated him. He is not absolved of this duty by the existence of an agreement between him and the person who nominated him.

The court held that unless there is an agreement to the effect, directors are not entitled to remuneration for services as they are not servants of the company.

The remuneration of directors, as a rule, is regulated by the Companies and Allied Matters Act and the Articles of Association of a company unless so provided.

The court held that a director is not entitled to preferential payment of fees in the case of a winding-up of a company because he is not a servant of the company.

The court held in this case that a provision in the articles that directors receive certain remuneration cannot be directly enforced against a company, but if the directors accepted the office on the basis of the articles, then the provision becomes binding on the company. A director cannot rely on the articles as constituting a contract between himself and the company although it is possible for a director to pursue a claim to recover payment on the basis of an implied extrinsic contract.

In this case, the court held that in the absence of special provisions, the remuneration or payment made to a director of a company is in the nature of a gratuity.

The court held that where a company proposes to make any payment to a director as a way of compensation for his loss of office, or as consideration in relation to his retirement from office, the payment will be unlawful unless the particulars of such payment and the amount to be paid is disclosed to all members of the company and approved by the company.

The court held that where a company proposes to make any payment to a director as a way of compensation for his loss of office, the payment will be unlawful unless the particulars of such payment and the amount to be paid is disclosed to all members of the company and approved by the company.

The court held that the relationship between a managing director and a company is that of master and servant. It further held that a managing director does not cease to be director simply because he is managing the company. The better view, perhaps being that directors of a company are trustees, agents and fiduciaries of the company.

The court held, with particular reference to the managing director, that the state of mind and the acts of the managing director are imputed to the company.

A company being an artificial person, an abstraction, must act through human organs or agents. Where it is alleged that a company did an act, it means that the company did the act through its human agents or servants. A company has primary organs which are the members in general meetings and the directorate and it generally acts through this organs.

The court held that a managing director ceases the post of an executive director which is contractual, as soon as he is appointed a managing director

The court held that a managing director, though a director, has a further and different relation to the company.

The court held that a managing director, unlike other directors is a servant of the company for the purpose of the preferential payment of his salary in the winding-up of the company.

The court held that the knowledge of a managing director in relation to a transaction he is conducting on the company's behalf will be imputed to the company, in the absence of any provision on the contrary, he is to communicate it to the proper authority.

The court held that the private acts of a managing director not done for the company or in pursuance of the authority given by the company does not bind the company.

The court considered the powers of a managing director with regard to third parties. The court held that persons dealing with a managing director must look to the articles to see whether he could have the power he purports to exercise. If he could, that is enough for persons dealing with him bona fide even if no power to do that act has, in fact, been given to him.

The court held that where a company removes a managing director in breach of his service contract of service, he can recover damages from the company.

The power of the board to terminate the appointment of a managing director is not without prejudice to the right of the managing director remove to compensation r damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director.

The court held that where a company removes a managing director in breach of his service contract of service, he can recover damages from the company.

The court held that where the number of directors falls below the minimum number provided for in the articles, the remaining directors cannot act unless the articles validate their acts by providing that their acts shall be valid notwithstanding any vacancy in their number.

It was held that the acts of directors, where their number falls below the minimum number provided for in the articles, will not be valid unless the articles provide that their acts shall be valid notwithstanding a vacancy in their number.

The court held that where the number of directors falls below the minimum number provided for in the articles, the remaining directors cannot act unless the articles validate their acts by providing that their acts shall be valid notwithstanding any vacancy in their number.

The court held that provisions in the article dealing with the number of directors may be imperative or merely directory.

The court held that the provision in an article validating the acts of directors where their number falls below minimum will not be effective unless the minimum number had earlier been appointed, for otherwise, there is no vacancy.

The court held that the appointment of directors is the business of the general meeting or the board of the company, and not that of any the individual member.

The court held that if a director claims to be appointed for life or some indefinite period, the terms of the appointment must be clear and definite. A person may be appointed a director for life, in which case, no re-election is necessary but he is nevertheless removable.

All directors must retire from office at the first general meeting of the company, and at the general meeting of each subsequent year, one third of the directors must retire from office. The directors who retire in every year are those who have ben longest in office since their election. If the number is not a multiple of three, then the number nearest one third must retire. The court held however, that if the number of directors is two, neither need retire.

The court held that where the articles give the power of appointment of a director to an outsider, the appointer may enforce the appointment by injunction, but where the appointee is unsuitable on personal grounds, the appointer will not succeed.

The court held in this case that an outsider cannot enforce his appointment of a director if what he has is only the right to nominate a candidate as director and not right of appointment.

Sometimes, the company by its articles gives power to an outsider to appoint a director. If the appointer makes an appointment, the company is bound to accept the appointment. Where the company refuses, the appointer may enforce the appointment by injunction. However, where the appointer has merely the right of nominate a candidate and not that of appointment, he cannot enforce an appointment.

The court held that where a director ceases to hold his qualification shares and thereafter acts without being formally appointed, such act will be valid where the articles provide that the act of a director shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.

The court held that where a director ceases to hold his qualification shares and thereafter acts without being formally appointed, such act will be valid where the articles provide that the act of a director shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.

The court held that the provisions of an articles validating the acts of a director where there is defect in his appointment or qualification will only avail the director if he had no actual knowledge of the defect at the time of the act.

The court held that where the articles provide that the acts of a director are valid notwithstanding any defect in his appointment or qualification, such provision will not avail the director where, at the time of the act he had actual knowledge of such defect.

The court held that where the articles provide that the acts of a director are valid notwithstanding any defect in his appointment or qualification, such provision will not avail the director where, at the time of the act he had actual knowledge of such defect.

The court held that as director who is not duly appointed but nevertheless acts on behalf of the company is well protected by the company where the company ratifies his acts by holding him out as acting for the company.

The court held that the golden rule is that a director must not, without the consent of the company make any profit out of his position in the company beyond the agreed remuneration.

The court held that where a director places himself in a position which his duty to the company conflicts with his personal interest, the court will intervene to set aside the transaction without enquiring whether there was a breach of the director's duty to the company.

The court in this case stated that the care which a director is required to take is reasonable care which is to be measured by the care an ordinary man might be expected to take in the circumstances on his own behalf.

The court examined the duty of care expected of a director, in this case. The court held that the care which is expected of a director is reasonable care and it is measured by the care which an ordinary man might be expected to take in the circumstances on his own behalf.

The court held that a director discharges both his equitable and legal duty if he acts within his powers, with such care as is reasonably expected from them, having regard to his knowledge and experience and acts honestly for the benefit of the company.

A director does not need to exhibit in the performance of his duty, a greater degree of skill than may reasonably be expected of a person of his knowledge and experience.

The court held that though a director by virtue of his position, does not owe fiduciary duty to the shareholders of the company, nevertheless owes a duty of care to the shareholders and the extent of the duty depends on the character of the company, the position of the director in the company and his degree of inside knowledge of the company.

The court held that directors who use their powers to obtain benefits for themselves at the expense of the shareholders, without informing them of the fact, cannot retain the benefit, and must account for them to the company.

The court held that directors must not use their powers to obtain benefits for themselves at the expense of the shareholders, without informing them of the fact, cannot retain the benefit, and must account for them to the company.

The court held that directors must not use their powers to obtain benefits for themselves at the expense of the shareholders, without informing them of the fact, cannot retain the benefit, and must account for them to the company.

The court held that is part of the duty of directors to the creditors to keep the property of the company inviolable and available for the payment of its debts.

The court held that a director owes fiduciary duties inter se, and in particular that a managing director owes fiduciary duties to other directors.

The court held that directors must consider what is fair where a decision of directors is bound to benefit some members while affecting others adversely.

A company owes a duty to its creditors, present and future. The company is not bound to pay off every debt as soon as it is incurred and the company is not obliged to avoid all ventures which involve an element of risk, but the company owes a duty to its creditors to keep its property inviolate and available for repayment of its debt. The conscience of a company, as well as its management, is confided to its directors.

A duty is owed by the directors to the company and to the creditors of the company to ensure that the affairs of the company are properly administered and that its property is not dissipated or exploited for the benefit of the directors themselves to the prejudice of the creditors.

In this case, the court laid down three yardsticks for a director's duty of care and skill as follows:

a. A director need not exhibit in the performance of his duty a greater degree of skill than should be expected of a person of his knowledge and experience.

b. A director is not bound to give continuous attention to the affairs of the company. It is enough if he attends periodic meetings. The position however is different if one is an executive director on salary with the company.

c. The directors are not guilty of breach of the duty of care and skill if having regard to the exigency of business, they delegate their duties to the managing director or a committee of the board provided there is basis for trusting such officials of the board. A director should however be careful in the delegation of duties as it may amount to abdication of duty.

The court held that no individual director or group of directors can bind the company unless the power of the board has been delegated to him as provided by the articles or Act as the power vested in the directors of a company must be exercised by them as a board.

A person who being a director of a company , is accountable as a fiduciary, cannot escape liability by incorporating or acting through another company which is his alter ego as a façade for receiving profits which would have been rightly due to the company of which he is a director.

The court held that a director who is disqualified by events under Section 258 of the Companies and Allied Matters Act, now Section 283 of the Companies and Allied Matters ACT automatically ceases to hold office and the directors cannot waive it.

The office of a director is vacated under Section 283 CAMA where:

a. A person ceases to be a director by Section 277 of the Act (Fails to obtain his share qualification within two months of his appointment).

b. A person becomes bankrupt or makes any arrangement or compromise with his creditors.

c. A person becomes prohibited from being a director by reason of any order made under section 280-281 of the Act. (Conviction for fraud).

d. A person becomes of unsound mind.

e. A person resigns his office in writing to the company.

The court held that where the Board of Directors of a company permit an agent to act in the management or conduct of the business of the company, they represent to all persons dealing with the agent that he has authority to enter into contracts of the kind on behalf of the company and in making such representation, the directors are performing an act of management of the business of the company.

The court held that where the Board of Directors of a company permit an agent to act in the management or conduct of the business of the company, they represent to all persons dealing with the agent that he has authority to enter into contracts of the kind on behalf of the company and in making such representation, the directors are performing an act of management of the business of the company.

The court held that unless the articles so provide, the Board of Directors, when acting within the confines of the powers conferred by the Act, are not bound to obey the directions of the members in general meeting, provided that the directors are acting with due diligence and in good faith.

The court held that unless the articles provide otherwise, where the Board of Directors are acting in good faith and within the confines of their powers as conferred on them by the Act, they are not bound to obey the instruction or directions of members at general meeting.

The court held that an action in the name of the company which is not authorized by the company itself in a meeting of the shareholders convened for the purpose, or by the directors of the company must be dismissed.

The court held that a director who has the confidence of the board can, in appropriate or situational circumstances as events would indicate commence an action in the name of the company with the intent of it being ratified

The court held that in the normal course of business, there is always a necessity for the directors delegate their powers to staff and officers.

Directors may delegate some of their powers to a committee of directors or managing director to whom they may entrust any of the powers.

The court held that it is only when directors act as a board that they are organs or agents of the company and are entitle to exercise the powers vested in them by the Act or the articles.

The court held that for the exercise of the power by a director to be in the interest of the company, such exercise of power must be intra vires.

The court held that a written notice of fourteen days of a meeting must be given to every director unless such director is disqualified and where this is not done, the proceedings at the meeting are void.

The court held that where the written notice of fourteen days is not given to every director, unless such director is disqualified, the proceedings at the meeting are void.

The court held that the proceedings of a meeting conducted without giving a director entitled to notice, the written notice of fourteen days, is void unless such director is disqualified.

The court held that a written notice of fourteen days of a meeting must be given to every director unless disqualified and where this is not done, the proceedings at the meeting are void.

The court held the decision of the board of directors at a meeting of the board void, where the quorum for the meeting was two directors but the two directors were disqualified from voting.

The quorum of a meeting of the board of directors is the number of directors qualified who must be present at the meeting to enable them to act as board.

The court held that any purported exercise of the power of the board of directors by only one of them is void, where owing to a deadlock, it is impossible for a meeting to be held, unless the articles otherwise provide.

The court held that any purported exercise of the power of the board of directors by only one of them is void, where owing to a deadlock, it is impossible for a meeting to be held, unless the articles otherwise provide.

The court held that where a resolution is required to be signed by all the directors entitled to receive notice of the meeting of directors, where it is not so signed, the resolution is invalid.

The court held that where directors fail to keep record of deliberations at the meeting of the board, they cannot be heard to complain where inference drawn from the records even if it differs from what they allege to be right.

The court held that an unrecorded resolution passed at a meeting, if duly passed, may be proven by other evidence other than by the minutes of a meeting.

The court held that where there is no provision for a quorum, a committee of directors must meet and act by a majority and have no power to add to their number or supply a vacancy.

The court held that although there is no inherent distinction between the different directors as to their duties and liabilities, the chairman of the board and the managing director may, by the articles of association and must, by their special access to and connection with the detailed machinery of control, be expected to be better informed than the other directors on the affairs of the company.

The court held that directors are trustees of their power and must exercise them bona fide and for the benefit of the company and not in their own interest.

The court held that directors like other agents of a company, incur no personal liability and are accountable for any secret profits made.

The court held that where directors exceed their authority when acting for the company, they may become liable for breach of warranty.

The court held that where a director inadvertently acts without having acquired his share qualification, the court may relieve from liability for the acts.

A company may fix the share qualification for its directors. Where it is fixed, it is required that all directors comply, however where a director acts without acquiring and retaining the share qualification, the court may relieve him of liability for those acts.

The court held that directors of a company will be liable if they contract in their own names or otherwise assume liability as agents.

The court stated in this case that a plaintiff has the option in law to sue either the company or servant of the company who committed the tort of negligence resulting in the injury to him. It is elementary that a company is vicariously liable for the tort of the employee. The court also stated that a plaintiff can also sue both the company and the servant who committed the tort.

The court held in the case to the effect that when a master employs a servant to do something for him, he is responsible for the servant's misconduct as if it were his own. If the servant commits a tort in the course of his employment, then the master is a tortfeasor as well as the servant.

Where an employee commits a tort in the course of his employment, the employer is a tortfeasor as well as the employee.

The court held in this case that a director of a company is not automatically to be identified with his company for the purpose of the law of tort, however small the company may be and however powerful his control over its affairs. Commercial enterprise and adventure is not to be discouraged by his subjecting a director to such onerous potential liabilities. In every case where it is sought to make him liable for his company's torts, it is necessary to examine with care what part he played personally in regard to the act or acts complained of.

The court held in the case stating that if directors themselves directed or procured the commission of the act they would be liable in whatever sense they did so, whether expressly or impliedly. An employer may be deemed to authorize acts done by his servant in the general scope of his employment; but that doctrine does not apply to a servant whose business is to engage other employees and even to dismiss them, and in the general scope of whose business the act complained of does not fall. To make such a servant liable, he must be privy to the tortuous act.

Before a director or officer can be held personally liable for a tort committed by his company, he must not only commit or direct the tortuous act or conduct but he must do so deliberately or recklessly and so as to make it his own, as distinct from the act of the company.

In the case where a plaintiff is suing in respect of injuries received by him in the course of his employment and while working at a place at which he is required by his employer to work, the only satisfactory approach is to look at all the circumstances in the light of the fact that is the basic duty of the employer to take reasonable care so to conduct his operations as not to subject those employed by him to unnecessary risk.

The relevant circumstances will include: (a) The skill and experience of the injured employee; (b) The nature of the task on which the employee was employed; (c) The place where the injured employee was employed and the degree of control which the employer exercised at that place; (d) The relationship, if any, between the injured employee and the individual tort feasor; (f) The interest, if any, of the employer in the actual task which the individual tort feasor was performing when the accident occurred.

The court held that directors of a company will be liable if they contract in their own names or otherwise assume liability as agents.

The court held that a director is personally liable to third party on contract where he contracts with his own name without disclosing that he is acting for a principal.

When a director acts as an agent, on behalf of the company, like any other agent, he is not personally liable. However, a director is personally liable where he contracts in such a way as to assume personal liability.

The court held that a director who has not authorized a fraud which has been committed by his co-directors cannot be held responsible for it.

The court held that where directors make a negligent misstatement on which a member relies and was damnified, the member can recover damages from the directors.

The court stated in this case that where an officer of a company is liable in respect of negligence but acted honestly, and having regard to all the circumstances of the case, he ought to be excused.

A director may be fairly excused for negligence, default or breach of duty or breach of trust and the court may relieve him from liability on such terms the court deems fit.

The court held that a director will not be held responsible for a fraud committed by co-directors which he did not authorize.

The court held that a director may be granted relief from liability even if his acts were ultra vires, provided that the director reasonably believed that the acts were intra vires.

The court held that a director who deals with legal matters without seeking legal advice at all and prefers to deal with the matter himself without proper consideration is liable and cannot be relieved from liability.

The court held that the general rule is that a director cannot make or be interested in a contract with the company unless affirmed by the company.

The court held that failure of a director to give notice to the company that he is interested in a proposed contract will make the contract voidable at the instance of the company.

The court held in this case that where a director receives money from the company in payment of services rendered to the company without disclosing his interest as required by law, the money so received remains the property of the company and the director holds it as a constructive trustee for the company.

The court held that a director may grant a loan to the company and charge interest, if the board of directors of the company so agree.

The court held that if the articles do not specify the duration of a director's appointment, the director holds office at will and may be removed by an ordinary resolution of the company without any further liability.

The court held that a company cannot plead the master's common law right to remove an employee since there is statutory provision for the removal of a director.

The court held that the removal of a director does not deprive him of any compensation or damages payable to him in respect of the termination of his appointment as director.

The court held that a director may still be properly removed even where improper notice and procedure was adopted earlier, since the company has a statutory right to remove anybody from its board. However, that person can apply to the court for a winding-up order on the ground that it is just and equitable to for the court to make such order.

The court held that a director may sue for wrongful dismissal or compensation for loss of office where he is removed by ordinary resolution, if he has an express service contract which does not empower the company to dismiss him that way.

In this case, the Court held that directors are persons whose appointment under the Companies and Allied Matters Act is one of statutory flavor and they may only be removed by strict adherence to the procedures laid down for their removal by the Companies and Allied Matters Act. Section 288 CAMA.

The court held that where the terms of agreement entered into between the company and a managing director are inconsistent with exercise of the power of the company to remove a director conferred by the articles, such removal under the articles in breach of the agreement will amount to wrongful removal.

The court held that the removal of a director by a company will not amount to a wrongful dismissal where there is no contract between the company and the managing director dealing with termination in terms that are inconsistent with the articles of association.

The court held that where a director has not been validly removed from office in compliance with the articles of association, he is entitled to an injunction preventing the removal.

The court held that where the articles provide for a procedure by which the appointment of a director may be terminated, such procedure must be complied with for the removal to be effective.

The court held that where the articles provide that a director can only be removed by a governing director, a person acting as a general manager cannot exercise the power of removal.

The court held that the service contract of a managing director can be terminated summarily for misconduct which occurred outside the performance of the contract and such misconduct must be so serious as to destroy the confidence necessary for the contract to be effective

The court held that a secretary is a mere servant whose function was prima facie clerical and ministerial only.

In Georgewill Whitechurch Ltd v. Cavanagh (1902) AC 117, the court stated that the duties of a secretary were of a limited and somewhat humble character.

In Barnett, Hoares & Co. v. South London Tramways Co. (1887) 18 QBD 815, the court had formerly held that a secretary of a company was a mere servant, his position being one that he did what he was told and nobody could assume that he has any authority to represent anything at all nor could anyone assume that statements made by him are necessarily to be accepted as trustworthy without further enquiry.

However, the position and status of a company secretary has changed and even the Companies and Allied Matters Act has also given recognition to the new status of a company secretary. See Section 330 CAMA.

In this case, the court held that a company secretary is an officer of the company with extensive duties and responsibilities whose status in a company is much more important than it was in 1887. This is because of the role he plays in the company, he is no longer a mere clerk. The secretary of a company may make representations on behalf of the company as well as enter into contracts on behalf of the company which come within the day to day to day running of the company. He is certainly entitled to sign contracts connected with the administrative side of a company's affairs such as employing staff, and ordering cars as those matters come within the ostensible power of a company secretary.

However, the position and status of a company secretary has changed and even the Companies and Allied Matters Act has also given recognition to the new status of a company secretary. See Section 330 CAMA.

In the case, the Court of Appeal held that a company secretary is a high ranking officer in the company set up and is indeed part of the management of a company.

In the case, the court described a company secretary as the administrative officer of the company.

The court held that a company secretary is an important officer of the company with important duties and responsibilities to the company.

The court held that a secretary is not personally liable for breach of trust or misfeasance by directors where he has merely acted in his ministerial or administrative capacity.

The court held that where a company secretary holds the dual position of both company secretary and legal adviser, the mere fact of this duality does not remove the position of the company secretary from being protected by Section 296 of the Act, now Section 333 CAMA.

Section 333 CAMA provides for the procedure to be followed by the Board of Directors in removing the secretary of a company.

The secretary of an incorporated legal entity is its natural mouthpiece and may be understood as having a very general authority on ordinary matters relating to the company's affairs and administration. To inform in an appropriate case, a third party that a member of a cooperative society has been expelled, or that his share had been forfeited, would be well within the apparent general scope of the authority of the secretary of such a society.

The court held that the secretary of a company cannot call a general meeting unless so authorized by the directors.

A secretary of a company cannot, without the authority of the board exercise any powers vested in the directors.

The court held that the secretary of a company cannot register a share transfer before the approval of the board is given.

The court held that a company secretary cannot affix the seal of a company to an instrument without approval of the board of directors.

The court held that a company secretary cannot alter the share register of a company without the authority of the directors.

The court held that the secretary of a company cannot borrow money on behalf of a company without the approval of the directors of the company.

The court held that a company secretary cannot issue a writ in the name of the company without the approval of the board of directors.

The court held that a company secretary cannot file a defense in the name of the company without an approval from the company.

The court held that an auditor appointed under the Act is an officer of the company.

The court held that a person who is not the company's regular auditor but was appointed ad hoc for a limited purpose is not an officer of the company.

The court held that auditors can be regarded as agents of the members of a company appointed to carry out certain duties as laid down by the Act and the Articles of Association of the company for the purpose of the audit. However, they are not agents for all purposes.

The court held that any provisions in the Articles of Association of a company barring auditors right of access to books, accounts or vouchers and from obtaining any necessary information or explanation from any member of the company in the performance of their duty is ineffective.

The court held that the business of the auditor in a company is to state the true financial position of the company at the time of the audit.

The court held in this case that the standard of care and skill auditors must exhibit in carrying out their tasks is that of the ordinary reasonable auditor. The auditor is a watchdog but not a bloodhound. He is not bound to do more than exercise reasonable care and skill in making inquiries and investigations.

The court held that an auditor must approach his task with an inquiring mind, not suspicious of dishonesty but suspecting that any one may have made a mistake somewhere and that a check must be made to ensure there has been none.

The court held that an auditor is entitled to rely on the assurances of officers of the company however, he must undertake independent investigations so as to enable him assess for himself whether the explanations he receives from members of the company are satisfactory.

The court held that an auditor will be liable to a company if through failure to comply with the provisions of the Articles, the company is misled into paying dividends from its capital

The court held that an auditor is liable to the company where he failed to verify one of the assets in the balance sheet which resulted in the company being misled.

The court held that an auditor is liable to the company where he failed to satisfy himself on the adequacy of the provisions of bad debts.

The court held that an auditor is liable where he knows the stock records of a company has been altered but fails to make proper enquiries

The court held that the auditors of a company will not be liable where they report the inadequacies in the accounting system of a company to the directors who are the sole shareholders of the company and hold all the interests of the company.

The court held that where the auditors forward their report to the secretary who should put it before the meeting but the secretary fails to do so, the auditors cannot be held liable for the unavailability of the report at the meeting.

The court held that an auditor will not be allowed to rely on the clause "without responsibility" where he acted fraudulently.

The court held that the fact that no meeting has been held during the year is no defense to the charge of not complying with the provisions relating to the filing of annual returns if the person charged has been a party to the default in holding the meeting.

The court held that where because no meeting has been held and default in making returns cannot be remedied, the daily fine imposed under the law will not exacted.

The court held that when the financial statement of a company is signed by two directors, it is presumed to have been duly audited until the contrary is proved.

The court held that accounts which are duly signed, laid and approved are binding on the company and on its directors and shareholders.

The court held that accounts which are duly signed, laid and approved are binding on the company and on its directors and shareholders.

The court held that accounts which are duly signed, laid and approved are binding on the company and on its directors and shareholders.

In this case, the court gave the definition of meeting as being the coming together of persons for the purpose of discussing and acting upon some matter or matters in which they have a common interest.

Meetings conducted by incorporated companies are referred to as corporate meeting. Company meetings is an indispensable tool of corporate governance, it is meant to be a key instrument for the protection of investors and it is also the medium by decisions are made in a company.

The court held that, prima facie, the word meeting presupposes the presence of more than one person.

The court held that every public company must hold a statutory meeting of the members of the company within a period of six months from the date of its incorporation.

The purpose for which a statutory meeting is held is to give members the opportunity of having the first progress report from the directors and promoters of the company.

Failure to hold a statutory meeting operates as a ground for winding up of the company but the court may however order that the statutory meeting be held instead.

In this case, the court ordered that a statutory meeting be held and ordered the defaulter to pay cost.

The court held that the annual general meeting of a company must be held in each year, from January to December and not more than fifteen months must elapse between the dates of one general meeting to the next.

Where two persons form a company and one dies, it is proper for the sole survivor to hold a meeting with himself without the need for a notice of meeting or quorum.

It was held by the court that the sole preferential shareholder of a company could alone constitute a "meeting". The word "meeting", though it presupposes the presence of more than one person, the context of the use of the word may make it less restrictive.

The court held that a meeting held by one member of a company present or by proxy as directed by the court constitutes a meeting and such member may apply to the court to take a decision.

The court held that the court will make an order for a meeting of a company where it is impracticable to hold a meeting. In the case, the members and directors of the company were split into warring factions and the machinery of management had broken down.

The court held that an order for a court convened meeting will only be made by the court where it is impracticable for any reason, to call or conduct a meeting of the company.

It was held that the court will order the meeting of a company where it is shown that it is impracticable to do so.

It was held that by the court that if all members of a private company agree, a decision may be taken even though a formal meeting has not been held.

In the case, the meeting held that the resolution passed by the company was not binding on the company as the notice for the meeting wherein the resolution was passed did not disclose the business to be transacted in substantial details to the shareholders.

A notice of meeting to be held by a company must contain the place, date and time of the meeting. It must also specify the nature of business to be transacted at the meeting in sufficient details to enable members decide whether or not to attend. See Section 242 CAMA.

In the case, the court held that the secretary of a company cannot without the approval of the directors give notice of a meeting. While the administrative duties of giving notice of meetings is properly the function of the secretary, the secretary of a company is precluded from doing so without the approval of the directors of the company.

It was held that the secretary of a company does not have the power to send out notices for meetings without the approval of the directors of the company.

The court held that a secretary has the duty of giving notice of meetings, however, issuance of such notices must be done with the approval of the directors of the company.

It was held in the case that a notice of meeting issued by the de facto director of a company is valid.

The court held that unless otherwise provided by the Articles of Association, proper notice of every general meeting must be given to members of a company.

The court held that proper notice of every general meeting must be given to members of a company unless the articles provide otherwise.

It was held that members of a company are entitled to proper notice of a general meeting unless the articles of association of the company provides otherwise.

The court held that a notice of meeting of a company must contain the requisite information, and sufficient time must be allowed and the notice must be properly served.

The court held that notice of a meeting will be deemed to be given to joint holders of a share where it is given to the joint holder first named in the register of members in respect of the share.

The court held that failure to give notice of any meeting to a person entitled resulting from a misrepresentation or misinterpretation of the provisions of the law is not an accidental omission and that unless the omission to give notice is accidental, the provisions of the articles will not avail the company.

It was held that unless omission to give notice is accidental, the provisions of the articles will not avail a company.

The court held that the provisions of the articles of a company will only avail a company when the omission to give notice of meeting to a person entitled to such notice was accidental.

The court held that failure to give notice of any meeting to a person entitled to receive it will invalidate the meeting unless such failure is an accidental omission on the part of the person giving the notice.

The court held that failure to give notice of a meeting as required renders any resolution passed at the meeting void.

The court held that the details of the conduct are decided at the meeting under the direction of the chairman of the meeting.

The court held in this case that quorum for a meeting is generally fixed by the articles of association of a company.

The quorum is the minimum number of persons that must be present at a meeting before business can be transacted.

The court held that a person may be present at the meeting of a company as two persons for the purpose of a quorum.

In this case, the court held that when the chairman of a meeting is facing disorder, he should:

a. Make earnest and sustained effort to restore order. If the efforts are in vain, the chairman should:

b. Attempt to put into effect any provisions for adjournments which appear in the rules, but that:

c. If this seems impossible, he should use his inherent power to adjourn the meeting for a short while, taking due steps to ensure so far as possible that all know of the adjournment.

d. If instead of mere disorder, there is actual violence, i.e. blows are being exchanged, that the knives are out or there is real possibility of grievous bodily harm, the position is exactly as above, but the chairman should his attempt to restore order before adjourning.

The court held that the chairman of a company is the chairman of the Board of Directors unless so provided.

The court held in this case that the minutes book sought to be tendered which consisted of typed loose sheets of the minutes which were subsequently pasted in a book does not constitute a minute book.

The court held that minute books may be transcribed or made from rough minutes taken at the time of the meeting.

The court held that minutes signed by the chairman of the meeting before whom the proceedings were held or by the chairman of the next succeeding meeting will be deemed evidence of the proceedings and serve as prima facie evidence that the meeting was duly held until the contrary is proven.

The court held that minutes signed by the chairman of the meeting before whom the proceedings were held will be deemed evidence of the proceedings and serve as prima facie evidence that the meeting was duly held until the contrary is proven.

The court held that minutes signed by the chairman of the meeting before whom the proceedings were held will be deemed evidence of the proceedings and serve as prima facie evidence that the meeting was duly held until the contrary is proven.

The court held that the fact that the minutes book of a company contains some inaccuracies or that some procedure was breached in recording the minutes of the meeting, or the like, it will not cease to be a minute book.

It was the position of the court in this case that the minutes of a company need not be kept in a bound book but may be recorded in loose-leaf books or in any other manner if adequate precaution is taken to guide against it being falsified.

Once the minutes is signed by the chairman of the meeting at which the proceedings were had, it is evidence of the proceedings and until the contrary is proved, the meeting is to be deemed duly held and convened.

Once a dividend is declared, it becomes a specialty debt due to and recoverable by shareholders within twelve years and is actionable only when declared.

The court held that at common law, unless otherwise provided "profits" mean actual profits and not profits made available for dividend.

In this case, the court held that a company's subscribed share capital must always be maintained. Where any part of it is lost in the course of business, it must be recouped in any subsequent profits before dividends are paid.

Dividends are not to be paid out of the company's capital. The only exception is where the court or the law permits such payment out of capital.

The court held that dividends can be paid out of revenue profits without first making good a loss or depreciation in fixed capital.

The court held that dividends can be paid out of revenue profits without fist making good a loss or depreciation in fixed capital.

The court held that dividends may be paid out of the profits of the current year without first making good the losses of previous years.

The court held that dividends may be declare out of the undistributed profits of the previous year as they remain profits of the company until they are capitalized.

The court held that dividends can be paid out of the realized profits on the sale of fixed assets provided that there is an overall accretion to paid-up capital.

The court held that dividends can be paid out of the realized profits on the sale of fixed assets provided that there is an overall accretion to paid-up capital.

The court held that dividend is not payable in specie but in cash unless the Articles provide otherwise.

The court held that unless otherwise provided by the Articles, dividends are payable to shareholders in proportion to the nominal amount of their shares irrespective of the amounts paid up.

The court held that where the articles provide that dividends are to be paid to members in proportion to their shares, it means that dividends are to be paid in proportion to the amount of the capital held by them respectively, irrespective of the amount paid up.

The court held that between the buyer and seller of shares, if dividend is declared after the contract of sale, the buyer will be entitled to the dividend unless otherwise agreed.

The court held that between the buyer and seller of shares, if dividend is declared after the contract of sale, the buyer will be entitled to the dividend unless otherwise agreed.

The court held that between the buyer and seller of shares, if dividend is declared after the contract of sale, the buyer will be entitled to the dividend unless otherwise agreed.

Where a shareholder knows that a dividend has been wrongfully declared, he is liable to refund it to the company on demand. The court held that in such a case, the shareholder who holds the wrongfully paid dividend holds in trust for the company.

The court held that directors have the right to recover dividend paid out of the capital of the company from shareholders who received it with the knowledge that the company had no right to pay it and the indemnity will only be to the extent of what they received.

The court held that where there is no provision protecting a company from liability where dividend is paid through a cheque or by warrant sent to the address given by a member of the company, the company may be liable where the dividend arrant is lost in the post.

The court held that the directors of a company are justified in revoking the declaration of dividends in the case of interim dividends.

The court held that an ordinary resolution is one which has been passed by a simple majority of votes cast by such members of the company being entitled to do, who vote in person or by proxy at a general meeting.

The court held that it is not necessary that a motion put to the meeting should be seconded, and semble a question might be put by the Chairman without it being proposed and seconded.

The court held that where a resolution has been proposed and seconded but not put to the meeting and the chairman merely declared that it was duly passed as a special resolution, it is nonetheless invalid.

The court held that an amendment of a resolution must be voted on first and if the chairman fails to put a proper amendment to the meeting, the resolution, if passed, will not be binding.

It was held that only members have a right to vote and that directors of a company cannot vote at general meetings unless they are members of the company.

The court held that directors may send out proxy papers at the expense of the company provided that they act bona fide in the interest of the company.

The court held that a person who has appointed a proxy may attend the meeting and vote but any vote cast by the proxy on the particular resolution will be rejected.

The court held that the appointment of a proxy is not revoked where the member who appointed the proxy attends the meeting and votes as the proxy may vote on some other resolution which the member who appointed him does not vote.

The court held that where the chairman of a meeting improperly adjourns a meeting, the members may elect another chairman and carry on with the business of the meeting.

The court held that defamatory speech made at the meeting of a company may be privileged for common interest if it is a matter affecting the interest of the shareholders of the company but not where reporters are deliberately invited to cover the libel.

The court held that a report sent to a member in the normal course of the administration of the company is prima facie privileged.

The court held that an incorporated company's assets are its property and not the property of the shareholders for the time being.

A company's assets do not belong to its shareholders nor are they managed by the company on behalf of its shareholders. It is only after a winding up order has been made can a shareholder receive a proportional share of the assets of a company after outgoings have been paid for.

The term compromise and the term arrangement are not synonymous. An agreement which enables the majority of the creditors to accept less than is due them is a compromise on the part of the creditors as a whole.

The court held that where shareholders do not give up anything in an agreement, no compromise is involved, only an arrangement results.

The court held that arrangement includes the exchange of debenture or securities for shares in a company.

The court held that a scheme or arrangement is prepared by either the company, a member of the company, a creditor or by a liquidator where the company is being wound-up.

The court held that where the court sanctions a scheme agreed upon, it becomes binding on all the creditors or the class of creditors or on the members, on the company and on the liquidator and contributories of a company in the case where a company is being wound-up.

It was held that before the court sanctions a scheme of arrangement, it must ensure that all the requirements of the law have been observed.

The court held that all the requirements of the law must have been observed before the sanction of a scheme of arrangement may be made by it.

The court held that the sanction of a scheme of arrangement will only be made where it is equitable in the circumstance to sanction it and the arrangement is such as a man of business will reasonably approve.

The court held that a scheme of arrangement will only be sanctioned where such arrangement is one a man of business will reasonably approve, due regard being had to the conclusions of the majority.

The court held that a scheme of merger contemplates a transfer of properties and liabilities of one or more companies but does not contemplate the transfer of contracts for personal service as they have to be specifically provided for if desired.

The court held that a scheme of merger contemplates a transfer of properties and liabilities of one or more companies but does not contemplate the transfer of contracts for personal service as they have to be specifically provided for if desired.

The court held that the provision of the law that a company or enterprise in which aliens participate shall not issue, transfer or sell its securities unless with the prior approval of SEC is not limited to public companies only, but that a private company which aliens participate will also require the prior approval of SEC before transfer of its securities.

The court held that the Securities and Exchange Commission has no right or power to direct or insist that a legal practitioner be accredited or registered with the Commission before participating as a solicitor in a public issue.

The court held that at common law, no clear prohibition is imposed on the use of inside information except only in the case of industrial and trade secrets and details concerning customers.

The court held that at common law, no clear prohibition is imposed on the use of inside information except only in the case of industrial and trade secrets and details concerning customers.

The court held that at common law, no clear prohibition is imposed on the use of inside information except only in the case of industrial and trade secrets and details concerning customers.

The court held that no other person who may read a prospectus or even acquire shares through the original buyers can sue the company for misrepresentation on the prospectus other than people who subscribed to shares, unless the prospectus was intended to be used and was indeed used to deceive persons to buy shares and contained statements known to be false.

In the case, the duty of those who issue prospectus was emphasized by the court. The court stated that those who issue a prospectus, hold out to the public the advantage which will accrue to persons who take shares in a proposed undertaking, and invite them to take shares on the faith of the representation contained in it and as such they are bound to state everything with strict and unscrupulous accuracy, and not only to abstain from stating as facts that which are not true, but to omit no one fact within their knowledge, the existence of which might , in any degree, affect the nature, or extent, or quality of the privileges and advantages which the prospectus holds out as inducements to take shares.

The court held that those prospectus have the duty not to state facts which are not true, in the prospectus and must not omit facts which will affect the advantages which is held out as inducements to take on shares in the prospectus.

The court held that a false statement in a prospectus may consist of a half-truth which is represented as the whole truth.

The court held that any statement included in a prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included.

The court held that whilst an allottee can bring an action for deceit against a company or director for misstatements contained in a prospectus, a person who later purchased in the market cannot do so because the prospectus was not addressed to him.

The court held that an allottee who cannot complain of an omission in a prospectus if he had notice of such omission.

The court held that in an action founded on the tort of deceit against a company for misstatements in its prospectus, the plaintiff must prove that the misrepresentation is a statement of fact which is material.

The court held that a person suing a company under the tort of deceit, for misrepresentations made in its prospectus, must prove that the misrepresentation is a statement of fact which is material.

The court held that a plaintiff must prove that the misrepresentation made by the company in its prospectus was material in an action under the tort of deceit.

The court that in an action founded on the tort of deceit, the plaintiff must show that the misrepresentation made by the company was fraudulent and that it was so fraudulently made by a person acting on behalf of the company.

The court held that a plaintiff in an action against a company, founded on the tort of deceit, must prove that he suffered damage or loss as a result of the misstatement made by the company in its prospectus.

The court held that the measure of damages suffered by reason of a false statement is the difference between the value which the share would have had if the company had possessed the advantages stated in the prospectus but not exceeding the price paid and at the true value of the shares at the time of allotment in the circumstances in which fact existed.

The court held that the measure of damages suffered by reason of a false statement is the difference between the value which the share would have had if the company had possessed the advantages stated in the prospectus but not exceeding the price paid and at the true value of the shares at the time of allotment in the circumstances in which fact existed.

The court held that damages may be claimed for non-compliance with the requirements of the prospectus.

The court held that damages may be claimed for noncompliance with the requirements of the prospectus.

The court held that even where separate statements are true by themselves, taking together the whole prospectus, a case of misrepresentation of facts may yet be established.

The court held that even where separate statements are true by themselves in the prospectus, taking together the whole prospectus, a case of misrepresentation of facts may yet be established.

The court held that with regard to the report of an expert, any misstatement will constitute grounds for rescission if the company had vouched for the accuracy of a report and relied on the report to invite subscriptions.

The court held that the omission of any of the matters required to be stated in a prospectus will not give rise to the right to rescind the contract although it may give rise to an action for damages against the directors of the company.

The court held that the omission of any of the matters required to be stated in a prospectus will not give rise to the right to rescind the contract, however, it may give rise to the right to an action for damages against the directors of the company.

The court held that the right to rescind will be lost if the plaintiff does not act promptly after discovering the true facts where there is an omission in a prospectus.

The court held that a person will lose the right to rescind if after discovering the true facts, where the company made an omission in the prospectus, he does not act promptly.

The court held that the plaintiff will lose his right to rescind, where, after discovering the true facts, in the case where a company made an omission in its prospectus, he does not apply for rescission before proceeding to wind-up the company.

The court held that a person will lose his right to rescission where after discovering a misrepresentation in the prospectus of a company, he does nay act which amounts to a waiver of his right to rescind.

The court held that a person will lose his right to rescission where, after discovering a misrepresentation in the prospectus of a company, he does nay act which amounts to a waiver of his right to rescind.

The court held that a receiver is an impartial person appointed by the court to manage, collect and receive pending the proceedings, rents, issues and profits of land or personal estate which it does not seem reasonable to the court that either party should collect or receive or for the same to be distributed among the persons entitled.

The court held a receiver as an uninterested person appointed by a court, or by a corporation or other person, for the purpose or collection of property that is the subject of diverse claims either because it belongs to a bankrupt or is otherwise being litigated.

The court held that a receiver ceases to be an agent of a company when it is wound up but does not become an agent of the debenture holders.

The court held that the mere fact that a receiver is defined by law to include a manager does not vest a receiver with the power of a manager.

The appointment of a receiver with the powers to keep the business of the company as a going concern is tantamount to the appointment of a receiver and manager. See Section 552 CAMA.

The appointment of a receiver and manager to manage a beleaguered company is an equitable remedy.

The court held that the purpose of appointing receivers is to work towards paying outstanding debt or redeem a security or freeing property from some jeopardy for the benefit of creditors or debenture holders on whose behalf the appointment is made.

The court held that appointment of a receiver may be made where a company is about to be wound up is insolvent and creditors are threatening action for recovery of debt against the company.

The court held that the appointment of a receiver may be made where a company is insolvent and closed,

The court held that the appointment of a receiver may be made where judgment has been obtained against a company and execution is likely to be an issue,

The court held that a receiver may be appointed where a company is proposing to distribute among its shareholders a reserve fund which constitutes practically its only asset, putting the interest of the denture holders at risk.

The court held that a receiver may be appointed where the auditors of a company declare at a general meeting and without being challenged by the directors that after providing for liabilities, the assets of the company would only cover principal loans secured and that the company's credit and funds are exhausted.

The court held that a receiver may be appointed where the auditors of a company declare at a general meeting and without being challenged by the directors that after providing for liabilities, the assets of the company would only cover principal loans secured and that the company's credit and funds are exhausted.

In this case, the court held that where a receiver is appointed by a debenture holder or mortgagee, in pursuance of the power in the debenture, the appointment cannot be challenged by minority shareholders.

It was held that an appointment of a receiver by the court will be made on the application of the person interested where the security or property of a company is in jeopardy.

In the case, the court held that the powers of a company and that of the directors which are affected when a receiver is appointed are those which are within the scope of the charge, but in respect of those which are not, the company and the directors retain their power.

The court held that the appointment of a receiver does not operate as a stay of execution.

It was held that the court may appoint a receiver to replace one appointed by debenture holders where the first appointment was, in the view of the court, not for the benefit of all the debenture holders.

The court held that where a receiver is appointed, the floating charges crystallize to fixed charges and the company can no longer deal with the assets without the consent of the receiver.

The court held that where a receiver is appointed, floating charges crystallize to fixed charges and the company can no longer deal with the assets without the consent of the receiver.

The court held that at the appointment of a receiver, the servants of the company may be automatically dismissed although the receiver may employ them.

In the case, the court held that at the appointment of a receiver, contracts of the company which are of an ordinary nature especially trading contracts remain alive and the receiver and manager is at liberty to carry out such contracts in the name of the company for the purpose of its business and does not incur any personal liability.

The court held that there is no good reason why the appointment of a receiver by debenture holders and who is an agent of the company, should determine the contract of employees.

The court held that there is no good reason why the appointment of a receiver by debenture holders and who is an agent of the company, should determine the contract of employees.

In the case, the court held that the appointment of a receiver does not end the power of the directors and does not prevent them from suing or being sued in respect of the matters which are outside the control of the receiver and manager.

In this case, it was held that the effect of the appointment of a receiver by the court is that it removes the conduct and guidance of the affairs of a company from the hands of the directors and places it in the hands of the receiver and manager who thereupon absolutely supersedes the company itself, so that the directors become incapable of making any contract on behalf of the company or exercising any control over any part of any property or assets of the company.

The court held that the powers of a company and that of the directors which are affected when a receiver is appointed are those which are within the scope of the charge, but in respect of those which are not, the company and the directors retain their power.

In this case, the court held that a receiver and manager appointed under a debenture which makes him an agent of the company is not liable for a debt incurred by the company with an unsecured creditor before the appointment was made.

The court held that an attachment and sale against the company after the appointment of a receiver, will be ineffective against its assets which have cease to exist in the custody of the company.

In this case, the court held that where a receiver is appointed by the court, no action can be brought against him or in respect of the property in his hands without the leave of the court, and since he is an officer of the court, any interference with him as such is a contempt of court.

In this case, the court held that the company can sue and be sued on assets and liabilities which never formed part of the fixed and floating assets taken over a receiver/manager on the basis that no party, whether natural or artificial will be allowed to sit on a property which does not belong to it.

The court held that a receiver may in carrying out the function of managing the business of the company, borrow money on the security of the company's property and the court may authorize him to do so. Where he borrows money, such a charge will have priority over all the debentures.

The court held that where a receiver borrows money in the course of managing the business of a company, the lender of such money will have priority over all other debenture holders.

In this case, the court held that where a receiver borrows money in the course of managing the business of a company, the lender has priority over all other debenture holder, but not over the manager's right of indemnity.

In this case, the court held that in the performance of his duties, the receiver owes a duty of care and of good faith.

The court held that fixed charges are not subject to preferential debts when a receiver is appointed on behalf of debenture holders.

In this case, the court held that a company is deemed to be unable to pay its debt if the court is otherwise satisfied that the company is unable to pay its debts, taking into account, its contingent and prospective liabilities as well as its debts which are immensely payable. It seems that there are two tests of insolvency which are that a company will be unable to pay its debts if it cannot pay them as they fall due out of cash or readily realizable assets in its hands and it will be immaterial that it could pay them over a lengthy period by a steady realization of all its assets.

The company will also be unable to pay its debts if it has no reasonable prospect of paying all of them, both accrued and prospective, by a steady realization of all its assets, and in this case, it will be immaterial that it can pay its accrued debts out of the liquid resources. In order to determine whether the company is insolvent in the second sense, it must be supposed that the company will cease carrying on its business immediately, except for fulfilling contracts which has already entered into, and it must then be asked whether the company would be able to satisfy its accrued liabilities and its liabilities under those contracts by steadily realizing all its assets; no regard must be paid to the profits which the company might earn or to any further liabilities which it might incur under fresh contracts if it continued to carry on its business.

In the case, the court held that a company will be deemed unable to pay its debts if the company returns unsatisfied, in whole or in part, the judgment, decree or order of a court made in favor of a creditor of the company.

The court held that a company will be deemed unable to pay its debts where the company's acceptances have been dishonored.

In the case, the court held that, in the circumstances where the acceptances of a company have been dishonored, the court will deem a company as being unable to pay its debt.

In this case, the court held that the court having jurisdiction to wind-up a company is the court within whose area of jurisdiction, the registered office of a company is situated.

The court held that the court which has jurisdiction to wind up a company, is the court within whose jurisdiction the company has its registered office.

In the case, the court held that where a contributory petitions for the winding-up of a company on the grounds that the accounts and information of the company were not supplied, he need not prove that there will be assets to distribute.

The court held that a contributory need not prove that there will be assets to distribute where he petitions for the winding up of a company on the grounds that the accounts and information of the company have not been supplied.

In the case, the court established the essential ingredients which will necessitate the making of a winding-up order by the court. The court stated that they are that, there must be a debt, the debt must be due and the company is unable to pay the debt.

The court stated in this case that, for an order for winding-up of a company to be made, there must be a debt owed by the company, the debt owed must have become due and that the company is unable to pay the debt.

The court held that a creditor must show that the company is unable to pay the debt owed or admitted or that the company is maliciously unwilling to pay it.

It is not enough that the company is owing a debt or has admitted to owing the debt, for a creditor to resort to the remedy of winding up.

The court held that a creditor must show that the company is unable to pay the debt owed or admitted or that the company is maliciously unwilling to pay it. It is not enough that the company is owing a debt or has admitted to owing the debt, for a creditor to resort to the remedy of winding up.

In the case, the court held that before a petitioner can resort to the remedy of winding-up of a company, it must be shown that the company is unable or maliciously refusing to pay its debts.

The court held that, the inability of a company to pay its debt as a sole ground for bringing a petition to wind-up a company is sufficient to enable the court to make an order winding-up a company.

In the case, the court held that once a petitioner shows that the company is in debt and that the debt is due and the company is unable to pay the debt, the company will be wound-up.

The court held that as long as the debt is admitted by the company in a winding-up proceedings, a winding-up order will be made by the court, especially where the company is commercially insolvent.

In the case, the court held that an incorporated partnership may be wound-up on the ground that it is just and equitable to do so.

In the case, the court held that an incorporated partnership may also be wound-up on the just and equitable ground.

The court held that a company may be wound-up if the company is formed for a fraudulent or illegal purpose.

In this case, the court held that where a company is formed for fraudulent or illegal purpose, it may be wound-up.

The court held that a company which never had any business or assets or a proper foundation, may be wound-up as it is merely a bubble.

The court held that a petition to wind-up a company may be brought by a petitioner on the grounds of the refusal of a company to pay its debt after demand.

Where the petition is brought under statutory demand, the petitioner must quote such notice of demand in the petition for winding-up.

The court held that a petition to wind-up a company may be brought by a petitioner on the grounds of the refusal of a company to pay its debt after demand.

The court held that a petition to wind-up a company may be brought by a petitioner on the grounds of the refusal of a company to pay its debt after demand.

The court held that a petition to wind-up a company may be brought by a petitioner on the grounds of the refusal of a company to pay its debt after demand.

The court held that a petition to wind-up a company may be brought by a petitioner on the grounds of the refusal of a company to pay its debt after demand.

Where the petition is brought under statutory demand, the petitioner must quote such notice of demand in the petition for winding-up.

A mere formal defect or irregularity in a petition does not invalidate the proceedings and they may be amended.

A mere formal defect or irregularity does not invalidate the proceedings and they may be amended.

In the case, the court held that a person who wishes to appear at the hearing of the petition must give to the petitioner notice of his intention to appear and a person who fails to comply will not, without special leave of the court be allowed to appear in the hearing of the petition.

In the case, the court held that an affidavit of verification is sufficient prima facie evidence of the statements which are contained in a petition for the winding-up of a company and if not challenged, is taken to be established.

The court held that an affidavit of verification is sufficient evidence of the statements contained in a petition where not challenged, unless fraud is charged in which case, the facts constituting it must be set out.

The court held that where a petition is not verified by an affidavit referring to it as required by the law, the petition will be struck out.

The court held that where a company is the petitioner in a winding-up proceedings, the affidavit of verification must be made by a director, secretary or other principal officer of a company.

The court held that where a company is the petitioner in a winding-up proceedings, the affidavit of verification must be made by a director, secretary or other principal officer of a company.

The court held that an affidavit of verification must refer to the petition. Where an affidavit does not refer to the petition, the petition will be struck out.

In the case, the court held that an affidavit in reply to an affidavit in opposition to a petition must be filed within five days of the date which notice of such affidavit is received, however, the court may grant extension of time.

The court held that the deponent to an affidavit opposing a petition, like any other deponent, may be cross examined on it, however, the cross-examination must not be left too late in the proceedings.

The court held that the deponent to an affidavit opposing a petition, like any other deponent, may be cross examined on it, however, the cross-examination must not be left too late in the proceedings.

The court held that the deponent to an affidavit opposing a petition, like any other deponent, may be cross examined on it, however, the cross-examination must not be left too late in the proceedings.

In this case, the court held that the court may refuse an application to advertise a petition if satisfied that the petition is not bona fide, but amounts to an abuse of court process.

The court held that where a petition is not made bona fide, it amounts to an abuse of court process and the court will refuse an application to advertise it.

The court held that a petition dispatched by post will not satisfy the requirement of the law.

The court held that if the statutory three weeks have not expired, the service will be invalid.

The court held that the notice of demand of debt made to a company from a lender must take the form of a formal letter containing salient points such as the debt and a possible information to the debtor of the consequence of his failure to pay the debt within the statutory period.

In the case, the court held that it is not necessary to use the word "demand" in a demand for debt owed by the company, the words, "preemptory request" or "call for payment" would suffice.

The court held that where a company demands for a debt, the demand notice must be duly authenticated by the company.

In the case, the court held that a demand notice for the payment of a debt cannot be signed by a solicitor because it is required to be under the hand of a petitioner.

The court held that a demand notice for the payment of debt owed to a petitioner must be under the hand of the petitioner and not signed by the solicitor.

In the case, the court held that for a debt to ground winding-up proceedings, the sum must be objectively and plainly established as being owed and the sum must be due by express agreement as money owing from one person by another.

The court held that when a debt is established as being owed and a formal demand is made and the payment is not made within the statutory time, the court has no discretion in the matter other than to wind-up the company.

The court held that the service of a demand notice on a company to pay its debts must comply strictly with the provisions of the law.

In the case, the court held that unless there is compliance with the law on the service of a demand notice to pay its debt, to a company, the question of neglect to pay the debt does not arrive.

The court held, that for a debt to ground winding-up proceedings, the sum must be objectively and plainly established as being owed and the sum must be due by express agreement as money owing from one person by another.

To justify an order for winding-up of accompany, there must be negligence by the company in paying the debt on demand or omission to pay without any reasonable excuse. In the case, the court held that mere omission to pay its debts by a company does not amount to negligence.

In the case, the court held that where there is an explanation for non-payment of the debt owed by a company within the time prescribed in a demand notice by a petitioner, it does not amount to neglect.

The court held that, where a plaintiff fails to prove the existence of a debt in a winding-up proceedings, he does not qualify as a creditor and the court will not wind-up the company on a debt not proved.

The court held that, in any case where a debt is disputed on substantial ground, a petitioner for the winding-up of a company is not yet a creditor of the company.

The court held that, it is the High Court of a State and not the Federal High Court that has jurisdiction to determine the existence of debt and the quantum thereof, between a petitioner and a company.

In the case, it was held that the court must determine on the evidence before it whether the dispute on the amount of debt owed by a company is bona fide, as the court will not dismiss a petition for the winding-up of a company simply because a respondent denies owing the petitioner.

The court held that the dispute of a debt between a petitioner and a company may take different forms such as the amount owed, the mode, time or place of payment.

In the case, the considered the problems that arises as to the satisfaction of the debt of creditors. The court held that all persons who may be entitled to prove for and receive dividends out of the assets of the company may make such claims, however, a statute barred debt cannot be admitted as proof.

In the case, the court considered the problems that arises as to the satisfaction of the debt of creditors where a company is insolvent. The court held that all persons who may be entitled to prove for and receive dividends out of the assets of the company may make such claims, however, a statute barred debt cannot be admitted as proof.

The court held that where a company is insolvent, a dispute as to the exact amount of the debt owed the petitioner is not an answer by the company.

The court held that where a company is insolvent, a dispute as to the exact amount of the debt owed the petitioner is not an answer by the company.

In the case, the court held that where a petitioner uses the petition for the winding-up of the company as a way of getting paid, it amounts to a legitimate use of the petition but it is not the primary use of a petition for winding-up.

The court held that the use of a petition for winding, by the petitioner, as a means of getting paid by the company is not the primary use of a petition for winding-up though it is legitimate use of it.

The court held in this case that where a company is unable to pay its debt, a term of settlement will be incompatible with the assertion that it is unable to pay its debt.

The court held that a petition for the winding-up of a company on the ground of inability to pay its debt is not the same and must be distinguished from an ordinary claim to recover a debt and a breach of contract.

The court held that where on the evidence adduced before it, it is clear that the debt of the petitioner is being bona fide disputed, it constitutes enough grounds upon which a winding-up order may be refused.

In the case, the court held that a winding-up order will be refused, where on the evidence adduced before it, it is clear that the debt of a petitioner is disputed bona fide.

In the case, the court held that, in special circumstances, a petition for the winding-up of a company will be allowed, even when the debt owed the petitioner is disputed, where a petitioner has to pursue the winding-up order or lose his remedy entirely.

The court held that an obligation by a company to pay its debts is not a contingent liability.

In the case, the court held that a winding-up order will not be made against a company merely because it has suffered a loss in business if the assets of the company, which are available to meet its liabilities, exceed its liabilities

In this case, the court held that where a contributory petitions for the winding-up of a company and the court is of the opinion that he is entitled to it, the court must make the order for winding-up unless it appears that there is in existence some other remedy available to the contributory and he is acting unreasonably in seeking the winding-up of the company instead of pursuing that other remedy.

The court held that if the petition for winding for winding-up is opposed by a majority of contributories, the court will not grant it unless the main objects of a company have failed.

In the case, the court held that, a petition for the winding-up of a company opposed by the majority of contributories will not be granted, unless, the conduct of the majority is such as to constitutes an oppression on the petitioning majority.

In the case, the court held that even where the company is making a loss, it will not be wound-up if the majority of the shareholders oppose the winding-up of the company.

In the case, the court held that even where the company is deeply indebted, it will not be wound-up if the majority of the shareholders oppose the winding-up of the company.

The court held that whether or not it is just and equitable to wind-up a company depends on the facts which exist at the time the petition for winding-up is heard.

Whether or not it is just and equitable to wind-up a company depends on facts which exist at the time of hearing of the petition and the power to wind up a company under the just and equitable doctrine is not restricted to cases ejusdem generis with those enumerated in section 571 (a)-(f), CAMA. The court held that a company can be wound-up where there is justifiable lack of confidence in the conduct and management of the company's affairs under the "just and equitable" doctrine.

The court held that if the court will not make an order winding up a company, unless there is a special circumstance justifying the order, where the petition for the winding-up of a company is for cogent reason, opposed, by the majority in value of such unsecured creditors.

In the case, the court held that the holder of a debenture or even a debenture bearer can petition for the winding-up of a company where the debt is secured.

In the case, the court held that the holder of a debenture stock secured by a trust deed cannot petition for the winding-up of a company, for he is but a beneficiary, the creditors being the trustees who may petition.

The court held that where a creditor of a company assigns to a debt another person, that other person may bring a petition for winding-up against the company.

In the case, the court held that where a creditor assigns a debt to another person, that other person may bring a petition to wind-up a company unless the assignor has already by himself brought the petition.

In the case, the court held that a contingent or prospective creditor may bring a petition to wind-up a company but not a prospective creditor whose debt has been paid to the sheriff.

In the case, the court held that, where a person who has a debt due against a company shows that the company is insolvent, he is entitled to a winding-up order.

The court held that a creditor is not precluded from bringing a petition to wind-up a company merely because the company is being wound-up voluntarily.

In the case, the court held that a creditor of a company is not precluded from bringing a petition to wind-up a company because a company has appealed against a judgment on which the petition is founded.

In the case, the court held that a creditor is not precluded from bringing a petition to wind-up a company because a company has taken proceedings against the petitioning judgment creditor in another suit in respect of some other disputed claim.

In the case, the court held that where there is a cross-claim in a petition for winding-up, the court will exercise its discretion.

The court held that the personal representative of a deceased shareholder is a contributory.

The court held that the personal representative of a deceased shareholder is a contributory.

The court stated in this case that a fully paid shareholder is a contributory since every member of a company is primarily liable to contribute to the limit of the amount he can be called upon to pay.

In the case, the court held that the holder of fully paid shares will not be placed on the list of contributories except at his own desire since he is not a person liable under Section 403, now Section 566 CAMA to make any contribution to the assets of the company in the event of the company being wound-up.

In the case, the court held that the holder of fully paid shares will not be placed on the list of contributories except at his own desire since he is not a person liable under Section 403, now Section 566 CAMA to make any contribution to the assets to the assets of the company in the event of the company being wound-up.

The liability of past members to contribute to the assets of the company in the event of its being wound-up is created by the Act, it is the same whether shares have been parted with by transfer or forfeiture but not where a person became a member by virtue of a contract which was void ab initio or which was voidable and voided before winding-up.

After the making of a winding-up order, the court is to settle a list of contributories but where it appears to the court that it will not be necessary to make calls or adjust the rights of contributories, then no list will be settled. It was however held in this case, that the court ought not to dispense with the list of contributories if the company has a large number of shares held by a number of people.

In the case, it was held that an application to determine whether or not a person is a contributory should not be made unless the liquidator has failed to appoint a time and place for the purpose or has made a decision which is not acceptable to the alleged contributory.

Where calls made on past members, where existing members are unable to satisfy contributions produce more than the sum required to pay debts contracted before the past members ceased to be the members of the company, the balance must be returned to the past members, notwithstanding that subsequent creditors may not be paid in full.

The court held that, arrest may be ordered of a contributory who is about to quit the shores of Nigeria or otherwise abscond, or remove or conceal any of his property for the purpose of evading payment of calls.

In the case, the court held that a contributory can only present a petition to wind-up a company only if, his shares were originally allotted to him or have been held by him, and registered in his name, for at least six months during the eighteen months before the commencement of the winding-up, or devolved on him through the death of a former holder.

In the case, the court held that a contributory can only present a petition to wind-up a company only if, for at least six months during the eighteen months before the commencement of the winding up, shares devolved on him through the death of a former holder.

In the case, the court held that where a contributory has been fully paid, he cannot bring a petition unless he can show that the company is solvent and that there is substantial surplus of assets available for distribution among shareholders, on the face of his petition.

The court held that, the mere fact that a contributory would derive some advantage from the winding-up of a company, unconnected with his membership will not constitute sufficient interest or establish locus standi to petition for the winding-up of a company.

In the case, the court held that, a person who is in arrears on his calls may bring a petition if he pays the amount of the call into the court.

The court held that for a contributory to be able to approach the court for the winding-up of a company of a company, he must show that his interest is a financial one and relates to his position as a present or past member of the company.

In the case, the court held that where there is a bona fide dispute whether shares had been allotted to a contributory petitioning for the winding-up of a company, the petition must be dismissed.

The court held that in order for a contributory to succeed on a petition for the winding up of a company, he must allege and prove that there will be assets for distribution among the shareholders.

The court held that where a contributory petitions on the ground that accounts and other information about the company were not supplied, he cannot be required to prove that there will be assets to distribute.

The court held that the fact that a contributory is a minority shareholder does not disqualify him from bringing a petition for winding-up against the company.