STANBIC IBTC BANK PLC V. L.G.C. LTD. (2025) 13 NWLR (PT. 2002) 361
ON RULES GOVERNING REGISTRATION OF SECURITIES
The Investment and Securities Act empowers the Security and Exchange Commission with the statutory obligation as the apex regulatory body for the Nigerian capital market.
By virtue of section 54(1), (2) and (3) of the Act, which place the burden of registration of public company and securities of all investment schemes on the registered issuer or stock broker or capital market operator, all securities of a public company and all securities or investments of a collective investment scheme shall be registered with the Commission under the terms and conditions contained in the Act and as may be supplemented by regulations prescribed by the Commission from time to time.
The issuer shall file with the Commission a registration statement which shall be signed by each issuer, its chief executive officer or officers, its principal financial officer and every person named as a member of the Board of Directors or persons performing similar functions and, in case the issuer is a foreign person, by its duly authorised representative in Nigeria.
A registration statement shall be deemed effective only as to the securities or investments specified therein as proposed to be issued.
Section 54(6) and (7) proscribe punitive measures for any issuer who contravenes the requirements of prior registration statement of an investment scheme or securities of a public company with the Commission which invariably suggests that an agent/issuer/stockbroker/capital market operator can be held liable in its individual capacity considering the nature of the contravention so contemplated.
(P. 407, paras. B-H)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON MODE OF APPLICATION FOR LEAVE TO INSTITUTE DERIVATIVE ACTION
By virtue of the combined provisions of section 303(1) of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004 and Rule 2(1) of the Companies Proceedings Rules 1992, an application for leave to institute a derivative action must be commenced by an originating summons on notice and not by an ex-parte application. This is to afford the opponent the opportunity of presenting his case in the inter-party proceeding.
A party who employs any other method to apply to the court for leave seriously offends the law. In that regard, a motion ex-parte does not meet the requirement of the leave procedure for commencing a derivative action. Therefore, the decision of the Supreme Court in Agip (Nig.) Ltd v. Agip Petroli Int’l (2010) 5 NWLR (Pt. 1187) 348 correctly interpreted the law.
(Pp. 291, paras. A-D; 292, paras. A-B; 301, para. G)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON MODE OF MAKING APPLICATIONS TO COURT UNDER COMPANIES AND ALLIED MATTERS ACT
By virtue of rule 2 of the Companies Proceedings Rules made pursuant to section 635 of the Companies and Allied Matters Act, Laws of the Federation, 2004, except in the case of the application mentioned in rules 5 and 6 of the Rules and applications made in proceedings relating to winding up of companies, every application under the Act shall be made by originating summons. The provision of Rule 2(1) employs the word “shall” to indicate a mandatory injunction. Every application under the Act shall be made by originating summons, except those specifically exempted.
The provision clearly applies to every application under the Companies and Allied Matters Act 2004, except those under rules 5 and 6 of the Companies Proceedings Rules 1992 and those made in proceedings relating to winding up of companies. In the instant case, the appellants were wrong in their argument that rule 2(1) of the Companies Proceedings Rules 1992 applied only to substantive applications. There is nothing in the Rules that supports that assertion. The use of the all-encompassing adjective “every” dispelled the appellants’ argument.
[Agip (Nig.) Ltd. v. Agip Petroli Int’l (2010) 5 NWLR (Pt. 1187) 348; Ugwuanyi v. NICON Insurance Plc (2013) 11 NWLR (Pt. 1366) 546; Adeosun v. Gov., Ekiti State (2012) 4 NWLR (Pt. 1291) 581; Corporate Ideal Ins. Ltd v. Ajaokuta Steel Co. Ltd. (2014) 7 NWLR (Pt. 1405) 165 referred to.]
(Pp. 290, paras. D-E; 292, paras. B-D; 296, paras. D-G)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON FUNCTION AND EFFECT OF DERIVATIVE ACTION UNDER SECTION 303(1) OF THE COMPANIES AND ALLIED MATTERS ACT
The effect of section 303(1) is to deprive the Directors of the company the power as the duly authorized organ of the company to authorize the bringing of action in the name of the company. The action is that brought by the minority shareholder in the name of the company.
(P. 291, paras. D-E)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON WHAT AMOUNTS TO DERIVATIVE ACTION AND WHEN CAN BE INITIATED
When a wrong is done to a company, it is only the company as represented by the Board of Directors of the company that can take steps to address the wrong either by way of filing an action in court or in any other way. However, there is an exception to this general rule which permits an individual shareholder or shareholders of the company to initiate an action on behalf and/or in the name of the company. Such an action is known as a derivative action. This is codified in section 303 of the Companies and Allied Matters Act 1990, now section 346 of the Companies and Allied Matters Act, 2020, which requires that a shareholder or shareholders of the company should obtain leave to commence a derivative action.
(P. 301, paras. A-D)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON RIGHT TO INSTITUTE ACTION ON BEHALF OF COMPANY OR TO INTERVENE IN ACTION IN WHICH COMPANY IS PARTY, AND PURPORT OF
By virtue of section 303 of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004 (as amended), subject to the provision of subsection of the section, an applicant may apply to the court for leave to bring an action in the name or on behalf of a company, or to intervene in an action to which the company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the company.
(Pp. 289–290, paras. H-A; 296, paras. A-C)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON PURPOSE OF DERIVATIVE ACTION
The purpose of a derivative action is for an applicant to bring an action in the name of or on behalf of the company or to intervene in an action to which the company is a party.
(P. 297, para. A)
AFRIBANK (NIG.) PLC V. C.B.N. (2025) 13 NWLR (PT. 2002) 255
ON CONDITIONS PRECEDENT TO FILING DERIVATIVE ACTION ON BEHALF OF COMPANY
Leave of court is a condition precedent to the commencement of a derivative action. By virtue of section 303 of the Companies and Allied Matters Act 2004 (as amended), no action may be brought and no intervention may be made on behalf of a company in an action under subsection of the section unless the court is satisfied that:
(a) the wrongdoers are the directors who are in control and will not take any necessary action;
(b) the applicant has given reasonable notice to the directors of the company of his intention to apply to court under subsection of the section if the directors of the company do not bring, prosecute or defend or discontinue the action;
(c) the applicant is acting in good faith; and
(d) it appears to be in the best interest of the company that the action be brought, prosecuted, defended or discontinued.
(Pp. 290, paras. A-D; 301, paras. D-F)
UDOH V. MIN., F.M.I.T. & INV. (2025) 12 NWLR (PT. 2000) 419
ON EFFECT OF REPEAL OF AN ENACTMENT
The repeal of an enactment does not affect the previous operation of the enactment or anything done or suffered under the enactment.
A suit to enforce right and liabilities under an enactment as in the instant case continues as if the repeal never occurred.
Thus, the issue of whether the transaction and incorporation made under the repealed subsidiary legislation ought to be set aside for allegedly violating the mandatory provisions of CAMA and Legal Practitioners Act remains a live issue irrespective of the repeal of the subsidiary legislation or CAMA.
In the circumstance, section 40 of CAMA 2020 which repealed CAMA 2004 has not taken care of appellant’s complaint in the instant case.
[O.H.M.B. v. Garba (2002) 14 NWLR (Pt. 788) 538 referred to.]
(Pp. 441–442, paras. B–C)
UDOH V. MIN., F.M.I.T. & INV. (2025) 12 NWLR (PT. 2000) 419
ON POWER OF FEDERAL MINISTER OF TRADE & INVESTMENT TO MAKE COMPANIES REGULATIONS 2012 AS AMENDED IN 2017
Regulation 11(b) of the Companies Regulations 2012 as amended in April, 2017 was validly made pursuant to the Federal Minister of Trade & Investment’s power preserved under section 16 of CAMA LFN 2004 that empowers him to make regulations for the purpose of compliance with the provisions of CAMA.
In the instant case, it was not disputed that the Regulation was validly made by the 1st respondent with the approval of the President of the country that is empowered to make Regulations generally for the purpose of the Act itself.
(Pp. 450, paras. F–G; 452, paras. A–B)
UDOH V. MIN., F.M.I.T. & INV. (2025) 12 NWLR (PT. 2000) 419
ON WHETHER THERE ARE CIRCUMSTANCES A LEGAL PRACTITIONER WILL BE RESTRICTED FROM MAKING STATUTORY DECLARATION OF COMPLIANCE
There is nowhere in the provisions of Companies and Allied Matters Act (CAMA) that stated the circumstances for which a Legal Practitioner will be restricted from making the statutory declaration of compliance.
By virtue of section 35(3) of CAMA and Regulation 11(b) of the Companies Regulations, the said statutory declaration of compliance must be made by a legal practitioner.
The trial court was right when it held that it will be wrong in law to import into the law or statute what is not stated therein. The provisions of CAMA under reference are clear and unambiguous. The trial court was right when it held that the provisions of CAMA and Regulation 11(b) of the Companies Regulations do not qualify which Legal Practitioner can or cannot make statutory declaration of compliance. All that CAMA has provided for is that there must be a statutory declaration of compliance by a legal practitioner.
It is immaterial and of no moment whether or not the legal practitioner is in the service of the 2nd respondent.
(Pp. 448–449, paras. D–C)
UDOH V. MIN., F.M.I.T. & INV. (2025) 12 NWLR (PT. 2000) 419
ON WHETHER REGULATION 11(B) OF THE COMPANIES REGULATIONS 2012 AS AMENDED RESTRICTS LEGAL PRACTITIONERS EMPLOYED BY CORPORATE AFFAIRS COMMISSION FROM MAKING STATUTORY DECLARATION OF COMPLIANCE PURSUANT TO SECTION 35(3) OF COMPANIES AND ALLIED MATTERS ACT
Regulation 11(b) of the Companies Regulations as a subsidiary legislation did not remove the duties of Legal Practitioners to make statutory declaration of compliance pursuant to section 35(3) of Companies and Allied Matters Act (CAMA).
The trial court was right when it held that the reason for the regulation is to ensure the ease of doing business in Nigeria where the directors or subscribers are not able to engage or afford the services of a legal practitioner.
The provisions of the regulations do not violate any of the provisions of Legal Practitioners Act. The mere fact that the 2nd respondent appoints or employs the services of Legal Practitioners within the provisions of sections 9 and 10 of CAMA does not in any way remove the names of Legal Practitioners so employed from the Roll of legal practitioners maintained at the Supreme Court of Nigeria nor is there any provision in CAMA or the Legal Practitioners Act which states that Legal Practitioners that are agents of the 2nd respondent or in any Ministry/Agency of the Federal Government are restricted from making statutory declarations of compliance pursuant to section 35(3) of CAMA 2004.
The Court of Appeal therefore agreed with the 2nd respondent that there is nowhere the right of a legal practitioner to make the statutory declaration of compliance pursuant to section 35(3) of CAMA is denied in the regulations of companies as amended whether the application for the registration of a new company is presented by a Legal Practitioner, Chartered Accountant under paragraph 11(a) of Regulation 11, or by a director or subscribers to the Memorandum of Association of the new Company under paragraph (a) of the same Regulation.
The Court of Appeal also agreed with the 2nd respondent that in both cases under paragraphs (a) and (b) of Regulation 11, the right of Legal Practitioners to make statutory declaration of compliance pursuant to section 35(3) of CAMA is well preserved such that the presenter of the application for a new Company is at liberty to approach any Legal Practitioner of his choice to make the statutory declaration of compliance.
In all cases where application for the registration are presented to the Corporate Affairs Commission (2nd respondent), even where it is presented under Regulation 11(b) of the Companies Regulations, the statutory declaration is required to be made by a legal practitioner who is so qualified under the Legal Practitioners’ Act.
The regulation under reference does not violate any provisions of CAMA, Legal Practitioners’ Act, the Code of Conduct for Public Officers and does not offend the provision of the 1999 Constitution as amended.
The Court of Appeal also agreed with the trial court that the regulation does not in any way remove the requirement for the statutory declaration by legal practitioner but rather provides that legal practitioners in the service of the 2nd respondent can equally make the declaration of compliance.
By so doing, a legal practitioner in the service of the 2nd respondent cannot be said to be engaging in private practice since the main aim of the amendment is to aid the ease of doing business in Nigeria.
(Pp. 449–450, paras. D–F)
UDOH V. MIN., F.M.I.T. & INV. (2025) 12 NWLR (PT. 2000) 419ON WHETHER A LEGAL PRACTITIONER IN THE SERVICE OF CORPORATE AFFAIRS COMMISSION OR ANY MINISTRY OR AGENCY OF GOVERNMENT IS PROHIBITED FROM MAKING STATUTORY DECLARATION OF COMPLIANCE UNDER SECTION 35(3) OF CAMA
The provision of section 35(3) of Companies and Allied Matters Act (CAMA) is clear and unambiguous. It does not qualify which legal practitioner can or cannot make the statutory declaration of compliance. What is paramount in the said provision is that there must be a statutory declaration of compliance to be made by a legal practitioner when application of a company is presented for registration. This is so whether or not the said legal practitioner is in the service of the 2nd respondent.
There is no such provision in CAMA or Legal Practitioner Act that a legal practitioner in the service of the 2nd respondent or any Ministry or Agency of Government is prohibited from making the statutory declaration of compliance under section 35(3) of CAMA.
Contrary to the argument of the appellant, it will be wrong to hold that legal practitioners in the service of the 2nd respondent cannot make the statutory declaration of compliance. That by making the statutory declaration of compliance pursuant to the regulations under reference, it cannot be suggested that legal practitioners in the service of the 2nd respondent are engaging in private legal practice when indeed the aim is to ensure ease of doing business in Nigeria.
Since it is not in dispute that legal practitioners in the service of the 2nd respondent are enjoined to make the statutory declaration of compliance not for their individual private gains, the trial court was right in holding that such service does not amount to engaging in private legal practice.
No provisions of Public Service Rules 2008 or the 1999 Constitution as amended is breached by the regulation under reference.
The authorities cited and relied upon by the appellant though well founded on issues decided by them did not apply to the facts and circumstances of the instant case.
(Pp. 451–452, paras. C–A)
AFRIBANK (NIG.) PLC v. N.D.I.C. (2025) 12 NWLR (Pt. 2000) 453
ON DUTY ON SHAREHOLDER OR MEMBER OF A COMPANY COMMENCING A DERIVATIVE ACTION ON BEHALF OF A COMPANY
By virtue of section 303 of Companies and Allied Matters Act, a shareholder or member of a company desirous of commencing a derivative action may apply to the court for leave to bring an action in the name or on behalf of a company or to intervene in an action to which the company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the company.
These statutory conditions for a derivative action are set in section 303 of Companies and Allied Matters Act which provides that:
- Subject to the provisions of subsection (2) of this section, an applicant may apply to the court for leave to bring an action in the name or on behalf of a company or to intervene in an action to which the company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the company.
- No action may be brought and no intervention may be made under subsection (1) of this section, unless the court is satisfied that:
a. the wrongdoers are the directors who are in control and will not take necessary action.
b. the applicant has given reasonable notice to the directors of the company of his intention to apply to the court under subsection (1) of this section if the directors of the company do not bring, diligently prosecute or defend or discontinue the action.
c. the application is in good faith; and
d. it appears to be in the best interest of the company that the action be brought, prosecuted, defended or discontinued.
[West African Oil Fields Services Ltd v. Gregory (2019) LPELR-47292; Citec Int’l Estates Ltd v. Francis (2021) 8 NWLR (Pt. 1768) 148; Agatha Gardens & Hotels Invest. Ltd v. Admin. Gen. & Public Trustee, Akwa Ibom State (2024) LPELR-61979 referred to.]
(Pp. 480-481, paras. A-A)
p. 479-480, paras. H-A)
AFRIBANK (NIG.) PLC v. N.D.I.C. (2025) 12 NWLR (Pt. 2000) 453
ON NEED FOR LEAVE TO BRING ACTION ON BEHALF OF A COMPANY
By virtue of section 303(1) of CAMA 2004, subject to subsection 2 of the section, an applicant may apply to the court for leave to bring an action in the name and on behalf of a company, or to intervene in an action to which the company is a party for the purpose of prosecuting, defending, or discontinuing the action on behalf of the company.
In the instant case, the appellants’ case was irredeemably incompetent by reason of failure to fulfil a condition precedent — that is, seeking and obtaining leave to commence a derivative action.
(Pp. 476, paras. F-G; 478, para. H)
AFRIBANK (NIG.) PLC v. N.D.I.C. (2025) 12 NWLR (Pt. 2000) 453
ON WHEN A CLAIM IS DEEMED PERSONAL
A claim is only deemed personal when it directly challenges actions of the company itself.
In the instant case, the appellants’ action could not be categorized as personal or representative because it was not initiated by members of the 1st appellant seeking to restrain or prevent the 1st appellant from undertaking certain actions.
(P. 477, paras. F-G)
A. DIKKO & SONS LTD. V. C.A.C. (2024) 8 NWLR (PT. 1939) 75
ON PROOF OF REGISTRATION OF COMPANY
By section 36(6) of the Companies and Allied Matters Act, 1990, the certificate of incorporation shall be prima facie evidence that all the requirements of the Act in respect of registration and of matters precedent and incidental to it have been complied with and that the company is one authorized to be registered and duly registered under the Act. Accordingly, the legal personality of a corporate body cannot be proved by pleadings or oral evidence. It can only be established as a matter of law by production in evidence of the certificate of incorporation.
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON WHO CAN SUE FOR WRONG DONE TO COMPANY OR RATIFY IRREGULAR CONDUCT OF COMPANY’S AFFAIRS
Section 341 of the Companies and Allied Matters Act 2020, states that subject to the provisions of the Act, where an irregularity is made in the course of a company’s affairs or any wrong is done to the company, only the company can sue to remedy that wrong and only the company can ratify the irregular conduct. Section 341 of the Companies and Allied Matters Act 2020 is a statutory prescription of locus standi. It is a codification of the judicial principle known as the rule in Foss v. Harbottle enunciated in the landmark decision in Foss v. Harbottle (1843)58 ER 189, which is now well grounded in Nigerian jurisprudence. [Multichoice (Nig.) Ltd. v. M.C.S.N. Ltd. GTE. (2020) 13 NWLR (Pt. 1742) 415; Aso Motel Kaduna Ltd. v. Deyemo (2006) 7 NWLR (Pt.978) 87; KLM Royal Dutch Airlines v. Taher (2014)3 NWLR (Pt. 1393) 137; Abdulkadir v. Mamman (2003) 14 NWLR (Pt. 839) 1; Elufioye v. Halilu (1993) 6 NWLR (Pt. 301) 570; Ejimeke v. Amaechi (1998) 3 NWLR (Pt. 542) 456 referred to.] (P. 291, paras. A-D).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON ESSENCE AND IMPORT OF RULE IN FOSS V. HARBOTTLE
The essence of the rule in Foss v. Harbottle (1843)58 ER 189 is that it is the company that is the proper party with locus standi to sue in an action involving an alleged wrong to the company. The rule emphasizes majority rule, which is the underpinning of decision making and action taking in company law. (Pp. 291-292, paras. F-A).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON NAME BY WHICH ACTION OF SHAREHOLDERS TO REMEDY WRONG DONE TO COMPANY MUST BE INSTITUTED
While the majority of shareholders can exercise the powers under section 341 of the Companies and Allied Matters Act, 2020, such powers can only be exercised in the company’s name. Put succinctly, the majority of a company’s shareholders may sue to remedy a wrong, but only by using the company as the proper plaintiff. Invariably, the general effect and purport of Section 341 of the Companies and Allied Matters Act, 2020 is that shareholders (majority or minority) may not sue in their individual capacities for wrongs done to the company. (Pp. 292, paras. B-C).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON WHETHER SHAREHOLDER OF COMPANY HAS LOCUS STANDI TO INSTITUTE ACTION AGAINST OPPRESSIVE AND PREJUDICIAL CONDUCT OF AFFAIRS OF COMPANY AFFECTING HIM
Shareholders and members of a company had the requisite locus standi under sections 310 and 311of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004 to initiate an action complaining that the affairs of the company are being or has been conducted in a manner that is oppressive or unfairly prejudicial to them, or in a manner that is in disregard of the interest of a member or the members as a whole.
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON WHETHER COMPANY IS A MANDATORY PARTY IN ACTION FOR ENFORCEMENT OF PERSONAL RIGHT UNDER SECTION 344, CAMA, 2020
For an action brought to enforce a personal right under section 344 of the Companies and Allied Matters Act 2020, there is no suggestion in the wordings of the Act that the company must be joined as a party. (P. 299, para. F).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON EFFECT OF FORMATION OF COMPANY
Once a company is formed, it becomes a corporate entity, distinct and separate from its members. [Shonubi v. Onafeko (2003) 12 NWLR (Pt. 834) 254; Union Beverages Ltd. v. Pepsi Cola (1994) 3 NWLR (Pt. 330) 1; Marina Nominees Ltd v. F.B.I.R. (1986) 2NWLR (Pt. 20) 48 referred to.] (P. 293, paras G-H).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON ATTRIBUTES OF CORPORATE PERSONALITY
By virtue of sections 42 and 43(1) of the Companies and Allied Matters Act 2020, an important incident of corporate personality is the company’s capacity to hold and or own property in its own name, separate from those of its members. The property of the company is therefore distinct from and not the property of its members. And as a company has perpetual succession, ownership of the company’s property remains vested in the company, regardless of any change in the constitution of its membership. [New RES Int’l Ltd. v. Oranusi (2011) 2 NWLR (Pt.1230) 102 referred to.] (P. 294, para.G, p.295, paras. C-D).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON MEANING OF “SHARE” OF COMPANY
By virtue of section 868(1) of the Companies and Allied Matters Act, 2020, “share” means the interest in a company’s share capital of a member who is entitled to share in the capital or income of such company; and except where a distinction between stock and shares is expressed or implied, includes stock. (P. 297, para. E-F).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON NATURE OF RIGHT IN SHARE OF COMPANY
The nature of the right in a share is proprietary. A shareholding constitutes proprietary rights guaranteed under sections 43 and 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). (P.298, paras. A-E).
INTER OCEAN OIL DEV. CO. (NIG.) V. FADEYI (2024) 14 NWLR (PT. 1958) 239
ON WHO DECIDES HOW COMPANY OPERATES
The operations of a company are principally by the will of the majority of its shareholders. [Tanimola v. Mapping Geodata Ltd. (1995) 6 NWLR (Pt. 403) 617 referred to.] (P. 292, para. A-B).
A.G., BAYELSA STATE V. ODOK (2025) 4 NWLR (PT. 1982) 385
ON MEANING OF BUSINESS NAME
A business name is the name under which any business is carried on, either by an individual, firm or a corporation. Business is carried on by agreements.
The day-to-day transactions of a law firm is to accept briefs from clients and get paid for its legal services rendered. Each of those briefs is a contract. Therefore, a law firm registered as a business name can carry on business. (Pp. 408, paras. C-D).
MAINSTREET BANK REG. LTD. V. OSHINUGA (2025) 5 NWLR (PT. 1984) 727
ON OPERATION AND APPLICATION OF RULE IN FOSS V. HARBOTTLE
The rule in Foss v. Harbottle postulates that where a wrong is committed against a company or association of persons, it is the company or association that possesses the right to sue when a simple majority of members are against what was done and that an individual member would have no cause of action to sue in his own right. Put in other words, the rule is that the affairs and management of a voluntary association, organization or group shall be conducted by the simple majority of the members of the association, organization or group and that individual members cannot assert the right to the management of the affairs of the company and to act for or sue the company. It is simply the majority rule that when an injury is done to an association, organization, corporation, etc., no individual member would be allowed to bring legal action in respect of acts done to the association which could be or are rectified by a simple majority of the members. This position was recognized and provided for in section 299 of the Companies and Allied Matters Act, 1990 (section341 of CAMA, 2020) which provides that subject to the provisions of the Act where an irregularity has been committed in the course of a company’s affairs or any wrong has been done to the company, only the company can sue to remedy that wrong and only the company can ratify their regular conduct.
MAINSTREET BANK REG. LTD. V. OSHINUGA (2025) 5 NWLR (PT. 1984) 727
ON EXCEPTIONS TO RULE IN FOSS V. HARBOTTLE
To the general position provided for in section 299 of CAMA, 1990 (section 341 of CAMA, 2020) and the rule in Foss v. Harbottle, there are also provisions recognizing exceptions to the rule, such as section 300 CAMA, 1990 (section 343 of CAMA, 2020) for legal actions to be taken or initiated by individual members or minority shareholders of a company in the circumstances enumerated therein.
MAINSTREET BANK REG. LTD. V. OSHINUGA (2025) 5 NWLR (PT. 1984) 727
ON EXCEPTIONS TO RULE IN FOSS V. HARBOTTLE
The rule in Foss v. Harbottle is subject to certain exceptions which are that individual members can take out actions against their company in the following situations, that is:
- to restrain the company from doing an illegal or ultra vires act;
- to prevent a fraud on the minority; for example, to recover the company’s property from persons who have taken it for themselves; and who can by using their controlling interest in the company prevent it from taking any such action;
- to restrain the company, which has power to do an act sanctioned by a special resolution, from doing same by an improperly passed resolution; and
- to protect the invasion of a member’s individual rights as a member.
Like the rule itself, the exceptions listed above have also received legislative imprimatur in sections 300 and 301 of CAMA, 1990 (sections 343 and 344 of CAMA, 2020).
MAINSTREET BANK REG. LTD. V. OSHINUGA (2025) 5 NWLR (PT. 1984) 727
ON PURPOSE OF EXCEPTIONS TO RULE IN FOSS V. HARBOTTLE
The exceptions to the general rule in Foss v. Harbottle evolved primarily to put in check practices by companies, associations, organizations etc., which are detrimental and not in the best interest of the company, association or organization, but which are or may be beneficial only to the individuals or some members who manage, run or control the affairs of the company, association or organization due to their majority holding. (P. 767, paras. C-D).
AKINGBOLA V. INTERCONTINENTAL BANK PLC (2025) 5 NWLR (PT. 1984) 343
ON WHETHER DISSOLVED COMPANY CAN BE REVIVED
By virtue of section 524(1) of the Companies and Allied Matters Act, where a company has been dissolved, the court may at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the court to be interested, make an order, upon such terms as the court may think fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved. By the provision, a dissolved company will only be revived where the application is made at any time within two years of the date of the dissolution, and not after.
AKINGBOLA V. INTERCONTINENTAL BANK PLC (2025) 5 NWLR (PT. 1984) 343
ON LEGAL PERSONALITY OF INCORPORATED COMPANY
An incorporated company is a juristic entity clothed with a legal personality. It is an artificial person, persona ficta, with rights and liabilities to sue and be sued in the temple of justice. [Agbomagbe Bank Ltd. v. General Manager G-B Ollivant Ltd. (1961) 1 ALLNLR 116; Kate Ent. Ltd. v. Daewoo (Nig.) Ltd. (1985) 2 NWLR (Pt. 5) 116; Socia-Political Research Dev. v.Min., Fed. (2019) 1 NWL R (Pt. 1653) 313; Persons,Name Unknown v. Sahois Int’l Ltd. (2019) 13 NWLR (Pt. 1689) 203 referred to.] (P. 427, paras. D-E).