In this case the court restrained legal practitioners in the employment of the Corporate Affairs Commission from deposing to or signing the statutory declaration of compliance as required under the Companies and Allied Matters Act in the formation of a company.

Under Section 40 of the Company and Allied Matters Act, a statement of compliance which is signed by a legal practitioner and attested before the Commissioner for Oaths or Notary Public is required to be delivered to the Corporate Affairs Commission to the effect that the requirements of the Companies and Allied Matters Act regarding registration has been complied with. It remains the exclusive preserve of legal practitioners other than those in the employment of Corporate Affairs Commission to make the statement of compliance in accordance with the requirements of the Company and Allied Matters Act as provided in Section 40 CAMA.

The court held that the Object Clause is no more than a list of the objects or activities the company may lawfully carry out. They are certainly not objects that the company must execute. The inclusion of the terms of the pre-incorporation contracts in the Memorandum of Association of a company is an indication of a strong desire that the proposed company after incorporation should execute the terms of the agreement so included. The inclusion of a pre-incorporation contract in the object clause of a Memorandum of Association a company does not make it binding on the company.

The decision of the court in case is to the effect that a company, just like a natural person, can enter into contracts, vary or discharge under seal, in writing or by oral agreement as long as the essential ingredients of contract making are present. There is no need for insistence that it must be reduced into writing if such form of contracting would be proper in similar contracts between individuals. The effect of this is that a company contracts orally or in writing or by deed in the cases in which an individual can do so. Unless otherwise provided in any particular case, company contracts are entered the same way as an individual.

This authority is to the effect that a Bill of Exchange or Promissory Note is deemed to have been made, accepted or indorsed on behalf of a company if it is done in the name of the company or if expressed to be made, accepted or indorsed on behalf of or on account of the company by a person under its authority. It is not necessary that a formal resolution of the directors should be passed that bills should be accepted; and where a director without authority accepts bills on behalf of a company whose articles give power to delegate the duty of accepting bills to any one of its directors, the company is liable to a holder in due course, even though the delegation has not in fact taken place.

The court held that a promoter is neither an agent of nor a trustee of the company but he occupies a fiduciary position to the company. He must account to the company for any money he receives as a promoter.

Anyone who undertakes to take part in forming a company with reference to a given project and to set it going and takes the necessary steps to accomplish that purpose or undertakes raising capital for it, is deemed to be a promoter provided that a person acting in a professional capacity in the formation of the company is not deemed to be a promoter (e.g. lawyers and accountants). Section 85 of CAMA.

The legal relationship that exists between a promoter and a company is neither an agency relationship nor Trustee relationship. This is because as it relates to Agency, there is no principal in existence. Ordinarily, in an agency relationship, the act of an agent binds the principal, thus a promoter is not the agent of the company. In agency, [the contract is between the principal and third parties.]

As it relates to trust relationship, a promoter is not the trustee of the company because in trusteeship, the legal title is vested in the trustee. The legal title of any property acquired by a promoter is not vested in the promoter to hold in trust for the company. Hence, the legal relationship between the promoter and the company is FIDUCIARY RELATIONSHIP. This is because fiduciary relationship entails the concept of utmost good faith.

The court in this case held that contracts entered on behalf of a proposed company with the intent of such company taking over such contract upon incorporation is not binding on the company and the company cannot ratify such contract. This is the position in Kelner v. Baxter under the common law.

Under CAMA, by Section 729 (10) of the CAMA, pre-incorporation contracts though not automatically binding on the company, can be ratified by the company after its incorporation and thereupon the company becomes bound by it and also entitled to the benefits of such contract.

The court held that a promoter cannot personally seek to enforce a pre-incorporation contract where such contract was entered into on behalf of the company and not in his personal capacity. Pre-incorporation contracts are all contracts entered on behalf of a proposed company for such company to take over upon incorporation. The contract must be on behalf of the company and not for the promoter himself.

In this case it was held that the rule that a company is not bound by a pre-incorporation contract purportedly made by it or on its behalf, even if ratified by it after incorporation, is a rule of common law and not a statutory provision and cannot override the provision of statute allowing companies to ratify pre-incorporation contracts. See Section 729(10) CAMA.

Under Section 80 of the Companies and Allied Matters Act, a foreign company that applies and is exempted from the demands of Section 78 (to be exempted from fulfilling the registration requirements of a foreign company that wants to carry on business as accompany in Nigeria) of the Act, has the status of an unregistered company and accordingly, the provisions under the Act applicable to an unregistered company applies to the exempted foreign company as they apply in relation to an unregistered company under the Act in Nigeria.

In this case the court defined Company Directors as persons so appointed or elected according to corporate law of the land, authorized to manage and direct the affairs of a corporation or company. By Section 269 CAMA, directors are persons duly appointed by the company to direct and manage the business of the company.

The decision of the Court in this case is to the effect that a Company Director is an employee of a company. Directors are not servants of the company but its alter ego. However, the Managing Director is a servant of the company.

The Managing Director who is, firstly, a Director/Member of the Board of Directors, is appointed and can be removed by the Board. He ceases to hold office if, for any reason, he ceases to hold office as a Director.

This case is an authority, as held by the Court of Appeal, that a written resolution which is signed by all the directors who are entitled to receive Notice of Meeting of the Directors, is as valid and effectual as if it has been passed at a meeting of Directors duly convened and held.

The Supreme Court held in this case that a company does not require the unanimity of all its shareholders or directors to enable it direct that a meeting be held. It is sufficient that the court is satisfied that without its intervention, it is impracticable for a meeting to hold, and in such situation will so order. Where it is impracticable for any reasons to call or conduct a meeting of the company, the court may on its own motion, or on application of directors or persons entitled to a vote at such meeting, order a meeting to be called. See also Section 247 CAMA.

The court decided in this case that a Company Secretary is a high ranking officer in the company set-up, and is indeed part of the management of a company. A company secretary services the Board and may be responsible for the day to day running of the company.

In this case the Court held that Minutes of Meetings must be entered in books kept for that purpose. It held that type written recordings in papers containing minutes which are pasted permanently to pages of a book and not in loose sheets, termed or designated as minute book, suffices as Minutes' Book.

This old English authority is to the effect that, as a general rule, where irregularity has been committed in the course of the management of the affairs of f the company or a wrong has been done to the company, it is only the company that can ratify the irregular conduct or sue to remedy any such wrong. Section 34 of CAMA.

This Nigerian case echoes the Foss v. Habottle principle above stated, but goes two extra two (2) principles, and that is that:

a) The company will ultimately be the plaintiff to sue in respect of wrong done to the company; and

b) The court will not intervene in the management where the irregularity complained of is within the scope of powers of the majority shareholders to remedy by means of an ordinary resolution.

The court held that a member of a company may restrain the company from entering into any transaction which is illegal or ultra vires. See Section 343 (a) CAMA. See also Hogg v Cramphorn [1967] Ch. 254. Ultra vires acts are any acts which fall outside the powers that are specifically listed in the Companies and Allied Matters Act and are also outside those mentioned in the Article of Association and Memorandum of Association. Such acts are void and cannot be made legal through ratification by majority members.

The court held that a member who alleges that the affairs of the company is being conducted in a manner oppressive or unfairly prejudicial to a member or members may apply to court for relief by petition. See Section 354(1) CAMA.

In this court held that a member of a company may restrain the company from purporting to do by ordinary resolution any act which by its articles or this Act required to be done by special resolution. Section 343 (b) CAMA. Such a member may seek for an injunction or declaration from the court.

The court held that a member of a company may restrain the company from any act or omission affecting the applicant's individual rights as a member. See Section 343(c) CAMA. Such a member may pray the court for a declaration or for an injunction.

The court held that a member of a company may by injunction or a declaration restrain the company from committing fraud on either the company or the minority shareholders where the directors fail to take appropriate action to redress the wrong done. S.343 (d) CAMA. Where the majority of a company's members use their power to defraud or oppress the minority, their conduct is liable to be impeached even by a single shareholder. The fraud or oppression need not amount to tort at common law, but it must involve an unconscionable use of the majority's power resulting, or likely to result, either in financial loss or in unfair discriminatory treatment of the minority.

Personal action is one instituted by an individual in his personal name against the company and or its controlling members. A personal action does arise where a member seeks to redress a personal wrong to him in his personal capacity.

The securities of a company consist mainly of shares and debentures. The court held that a share represents a unit of the bundle of rights and liabilities, which a shareholder has in a company as provided in the terms of issue and the articles. Some of the rights attaching to shareholding include; the right to attend and vote at a meeting. Section 138(a) and (b). A share is a chose inaction and is property transferable as provided in the articles (section 139).

The court held that the shares allotted by a company must not exceed its authorized share capital and unissued share capital. Before any shares may be allotted, the company must have unissued minimum capital sufficient to cover the allotment.

The court held that transfer of shares are deemed effected by delivery of a proper instrument of transfer to the company and the subsequent registration of the transferee in the register of members. See also Section 175(1) & (2) CAMA. The transferor is deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect of the shares. Section 175(3) CAMA, Starcola (Nig.) Ltd. v Adeniji [1972] I All, N.L.R. (Part 1) 49.

The vesting of shares in the personal representatives of a shareholder on the death of the Shareholder is known as transmission of shares. On the death of a member, the survivor where the deceased was a joint holder or the personal representatives of the deceased where he was a sole holder, shall be the only persons recognized by the company as having any title to his interest in the shares. See section 179(1) CAMA. The means to claim title to the interest in shares is the production of probate of the will or letters of the administration of the estate. Section 173 CAMA. The court held in Tika Tore Press Ltd v. Abina, that a person who becomes entitled to a share by reason of death or bankruptcy of a holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder, except that he will not, be so entitled, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the company.

It was held that a company, unless prohibited from borrowing by express stipulation in its memorandum or articles of association, has an implied power to borrow money for the purpose of its business or objects. The existence of such a power is a commercial necessity; and an implied power of borrowing may be exercised for the purpose of giving security for a debt by way of a charge or mortgage of its undertaking or property and issuance of debentures (section 191). See also Intercontractors (Nig.) Ltd.) v. N. P. F. M B. [1988] 2 NWLR (Pt. 76) 280 at p.292.

A debenture is a company security which is different from shares. In this case the court held that debentures are instruments issued to lenders to acknowledge indebtedness by a company. The instrument is often, but not necessarily, by deed.

The other requirements, in the general procedure for registration of Debentures, include:

1. Convening of Board meeting to pass resolution authorizing loan

2. Preparing of loan documents, executing and stamping of documents

3. Obtaining the Governor's consent (where such is required).

4. Filing the documents at Land registry

5. Filing of documents for registration at the Corporate Affairs Commission

• I Mortgage/Charge by way of legal mortgage or debenture

• II Particulars of Charge in FORM CAC 9

6. Entering of particulars of charge in register of charges and also registering of the debenture holders (where applicable)

7. Obtaining Certificate of Registration of charge from the Corporate Affairs Commission and endorsement on every debenture certificate.

8. Filing of Statement of Satisfaction in whole or part of a charge in FORM CAC 10

9. Notification of the CAC of appointment of a receiver or manager upon enforcement of the security.

The court held that the failure to register a charge as required will render it VOID against the liquidator and any creditor of the company, although the obligation to pay the debt is, however, NOT THEREBY DISCHARGED. It remains a good debt and can be proved in the winding up proceedings. See Section 222(1) CAMA.

The court held that winding up proceeding is the signing of the death warrant/certificate of a company or a pronouncement of the death of the company. It is a very serious matter which requires strict compliance. Winding up is the process by which a company is liquidated and dissolved and its assets distributed in accordance with the Rules of Priority for the benefit of its members, creditors and employees.

A creditor, by assignment or otherwise, to whom a company is indebted to the tune of a sum exceeding N200,000 and which repayment is due, can serve on the company, by leaving it at its registered office or head office, a DEMAND LETTER under his hand requiring the company to pay the sum due. Where the company is unable to pay the debt after a PERIOD OF THREE WEEKS, an action for winding up may be brought against it. For the court to wind up a company under section 571(d) CAMA, four essential ingredients must co-exist.

They are as follows:

i. There must be a debt in existence;

ii. The debt must be due;

iii. There must have been a formal demand for the debt; and

iv. There must be inability on the part of the company to pay the debt.

The demand is a statutory correspondence made under the hand of the creditor and it must last for a period of three weeks before a winding up action can be brought.

See section 572(a) CAMA. The court held in Onochie v. Alan Dick that where the amount owed is contentious, a petition for winding up will be refused. See also Tate Industries Plc. v. Devcom M.B. Ltd (2004) 17 NWLR (pt. 901) CA 182. In such cases where the AMOUNT OWED IS CONTENTIOUS, the matter will be referred to the State High Court for the determination of the sum owed by the company to the creditor.

It was held that having regard to the purpose of the registration of business names, unless the Registrar believes the application TO BE GENUINE, he has the DUTY TO REFUSE to register the business name.

It was held that registration of business name is not proof of partnership but raises a rebuttable presumption of the existence of partnership. Nwankwo v. Nwankwo (1995) 5 SCJ 44.

Where parties carry on a partnership THAT IS ILLEGAL, they cannot seek the assistance of the court to enforce claims that arise by virtues of the illegal activities.