COMPANIES AND ALLIED MATTERS DECREE NO.1 1990 ACT CAP. C20 L.F.N. 20041 continuation

Commencement [2nd January 1990]

Additional disclosure required in notes to financial statements.

339.-(1) The additional matters contained in Schedule 3 to this Act shall be disclosed in the company's financial statements for the year; and in that Schedule, where a thing is required to be stated or shown or information is required to be given, it shall be construed to mean that the thing shall be stated or shown, or the information is to be given in note or those statements.

      (2) In schedule 3 to this Act -

      (3) Parts 1 and 11 deal respectively with the disclosure of particulars of the subsidiaries of the company and its shareholders;

      (b) Part III deals with the disclosure of financial information relating to subsidiaries;

      (c) Part IV requires a subsidiary company to disclosure its ultimate holding company;

      (d) Part V deals with the emoluments of directors, including emoluments waived, pensions of directors and compensation for loss of office to directors and past directors; and

      (e) Part VI deals with disclosure of the number of the employees of the company who are remunerated at higher rates.

      (3) Whenever it is stated in Schedule 3 to this Act that this subsection shall apply to certain particulars or information, that particulars or information shall be annexed to the annual return first made by the company after copies of its financial statements have been laid before its share holders in a general meeting and if a company fails to satisfy an obligation thus imposed, the company and every officer of it who is in default shall be guilty of an offence and liable to a fine of 50 and for continued contravention, to a daily default fine of 10.

      (4) It shall be the duty of any director of a company to give notice to the company of such matters relating to himself as may be necessary for the purposes of Part V of Schedule 3 to this Act and this applies to persons who are or have at any time in the preceding 3 years been officers as it applies to directors.

      (5) A person who makes default in complying with the provisions of subsection (4) of this section shall be guilty of an offence and liable to a fine of 10 for every day during which the default continues.

Disclosure of loans in favour of directors and connected persons.

340.-(1) The group financial statements of a holding company for a year shall comply with Part 1of Schedule 4 to this Act (so far as applicable) as regards the disclosure of transactions, arrangements and agreements mentioned therein, including loans, quasi loans and other dealings in favour of directors.

      (2) In the case of a company other than a holding company, its individual accounts shall comply with Part 1 of Schedule 4 to this Act (so far as applicable) as regards disclosure matters contained therein.

      (3) Particulars which are required to be contained in Part 1 of Schedule 4 to this Act in any financial statements shall be required in respect of shadow directors as well as a director given by way of notes.

      (4) Where by virtue of subsection (2) or (3) of section 336 of this Act , a company does not prepare group financial statements for a year, it shall disclose such matters in its individual statements as would have been disclosed in group financial statements.

      (5) The requirements of this section shall apply with such modifications as are necessary to bring them in line with Part 1 of Schedule 4 to this Act (including with particulars of exceptions in respect of recognised banks) it shall disclose.

Disclosure of loans, etc., to officers of the company and statements of amounts outstanding.

341.-(1) The group financial statements of a holding company for a year shall comply with Part II of Schedule 4 to this Act (so far as applicable as regards transactions, arrangements and agreements made by the company or a subsidiary of it for persons who at any time during that year were officers of the company but not directors.

      (2) In the case of a company other than a holding company, its individual accounts shall comply with Part II of Schedule 4 to this Act (so far as applicable) as regards matters contained therein.

      (3) Subsections (1) and (2) of this section shall not apply in relation to any transaction or agreement made by a recognised bank for any of its officers or for any of the officers of its holding company.

      (4) Particulars required by Part II of Schedule 4 to this Act to be in any accounts shall be given by way of notes to the accounts.

      (5) Where by virtue of subsection (2) or (3) of section 336 of this Act , a company does not prepare group financial statements for year, it shall disclose this fact in its individual financial statements as required by subsection (1) of this section.

Directors' Reports

Directors' report.

342.-(1) In the case of every company, there shall be prepared in respect, of each year a report by the directors -

      (a) containing a fair view of the development of the business of the company and its subsidiaries during the year and of their position at the end of it; and

      (b) stating the amount (if any) which they recommend should be paid as dividend and the amount (if any) which they propose to carry to reserves.

      (2) The directors' report shall state the names of the persons who, at any time during the year, were directors of the company, and the financial activities of the company and its subsidiaries in the course of the year and any significant change in those activities in the year.

      (3) The report shall also state the matters, and give the particulars, required by Part 1 of Schedule 5 to this Act .

      (4) Part II of Schedule 5 to this Act shall apply as regards the matters to be stated in the report of the directors in the circumstances specified therein.

      (5) Part III of Schedule 5 to this Act shall apply as regards the matters to be stated in the directors' report relative to the employment, training and advancement of disabled persons, the health, safety and welfare at work of the employees of the company and the involvement of employees in the affairs, policy and performance of the company.

      (6) In respect of any failure to comply with the requirements of this Act as to the matters to be stated, and the particulars to be given, in the directors' report, every person who was a director of the company immediately before the end of the period prescribed for laying and delivering financial statements shall be guilty of an offence and liable on conviction to a term of imprisonment for not more than 6 months or to a fine of 500.

      (7) In proceedings for an offence under subsection (6) of this section, it shall be a defence for the person to prove that he took all reasonable steps for securing compliance with the requirements in question.

Procedure on completion of financial statements

Signing of balance sheet and documents to be annexed thereto.

343.-(1) A company's balance sheet and every copy of it which is laid before the company in general meeting or delivered to the Commission shall be signed on behalf of the board by two of the directors of the company

      (2) If a copy of the balance sheet -

      (a) is laid before the company or delivered to the Commission without being signed as required by this section; or

      (b) not being a copy so laid or delivered, is issued, circulated or published in a case where the balance sheet has not been signed as so required or where (the balance sheet having been so signed) the copy does not include a copy of the signature as the case may be,

the company and every officer of it who is in default shall be guilty of an offence and liable on conviction to afine of 300.

      (3) A company's profit and loss account and so far as not incorporated in its individual balance sheet or profit and loss account, any group accounts of a holding company shall be annexed to the balance sheet, and the auditors' report and the directors' report shall also be attached to the balance sheet.

      (4) The balance sheet and the profit and loss account annexed to it shall be approved by the board of directors and signed on their behalf by two directors authorised to do so.

Powers entitled to receive financial statements as of right.

344.-(1) In the case of every company, a copy of the company's financial statements for the year shall, not less than 21 days before the date of the meeting at which they are to be laid in accordance with section 345 of this Act be sent to each of the following persons -

      (2) every member of the company (whether or not entitled to receive notice of general meetings);

      (1) every holder of the company's debentures, (whether or not so entitled); and

      (c) all persons other than members and debenture holders, being persons so entitled.

      (3) In the case of a company not having a share capital, subsection (1) of this section shall not require a copy of the financial statements to be sent to a member of the company who is not entitled to receive notices of general meetings of the company, or to a holder of the company's debenture who is not so entitled.

      (4) Subsection (1) of this section shall not require copies of the financial statements to be sent to -

      (a) a member of the company or adebenture holder, being in either case a person who is not entitled to receive notices of general meetings, and of whose address the company is unaware; or

      (b) more than one of the joint holders of any shares or debentures none of whom are entitled to receive such notices; or

      (c) those who are not so entitled in the case of joint holders of shares or debentures some of whom are not entitled to receive such notices.

      (5) If copies of the financial statements are sent less than 21 days before the date of the meeting, it shall, notwithstanding that fact, be deemed to have been duly sent if it is so agreed by all the members entitled to attend and vote at the meeting.

      (6) If default is made in complying with subsection (1) of this section, the company and every officer of it who is in default shall be guilty of an offence and is liable to a fine of 250.

Directors' duty to lay and deliver financial statements.

345.-(1) In respect of each year, the directors shall at a date not later than 18 months after incorporation of the company and subsequently once at least in every year, lay before the company in general meeting copies of the financial statements of the company made up to a date not exceeding nine months previous to the date of the meeting.

      (2) The auditors' report shall be read before the company in general meeting, and be open to the inspection of any member of the company.

      (3) In respect of each year, the directors shall deliver with the annual return to the Commission a copy of the balance sheet, the profit and loss account and the notes on the statements which were laid before the general meeting as required by this section.

      (4) In the case of an unlimited company, the directors shall not be required by subsection (3) of this section to deliver a copy of the accounts if -

      (a) at no time during the accounting reference period has the company been, to its knowledge, the subsidiary of a company that was then limited and at no such time, to its knowledge have there been held or been exercisable, by or on behalf of two or more companies that were then limited, shares or powers which, if they had been held or been exercisable by one of them, would have made the company its subsidiary; and

      (b) at no such time has the company been the holding company of a company which was then limited.

      (5) References in this section to a company that was limited at a particular time are to a body corporate (under whatever law incorporated) the liability of whose members was at that time limited.

Penalty for non-compliance with section 345.

346.-(1) If in a year any of the requirements of section 345 (1) or (3) of this Act is not complied with by any company every person who immediately before the end of that period was a director of the company shall in respect of each of those subsections which is not so complied with, be guilty of an offence and liable to a daily default more fine of 50 in the case of a small company, a company limited by guarantee or an unlimited company, and 500 in the case of any other company.

      (2) If a person is charged with an offence in respect of any of the requirements of subsection (1) or (3) of section 345 of this Act , it shall be a defence for him to prove that he took all reasonable steps for securing that those requirements be complied with before the end of the period allowed for laying and delivering accounts.

      (3) In proceedings under this section with respect to a requirement to lay a copy of a document before acompany in general meeting, or to deliver a copy of a document to the Commission, it shall not be a defence to prove that the document in question was not in fact prepared as required by this Part of this Act .

Default order in case of non-compliance.

347.-(1) If -

      (a) in respect of a year, any of the requirements of subsections (1) and (3) of section 345 of 345 Decree has not been complied with by a company before the end of the period allowed for laying and delivering financial statements; and

      (b) the directors of the company fail to make good the default within 14 days after the service of a notice on them requiring compliance, the court may on application by any member or creditor of the company or by the Commission make an order directing the directors (or any of them) to make good the default within such time as may be specified in the order.

      (2) The court's order may provide that all costs of and incidental to the application shall be borne by the directors.

      (3) Nothing in this section shall affect the provisions of section 346 of this Act .

Penalty for laying or delivering defective financial statements.

348.-(1) If any financial statements of a company (other than its group financial statement) of which acopy is laid before the shareholders in general meeting or delivered to the Commission do not comply with the requirement of this Act as to the matters to be included in, or in a note to, those financial statements, every person who at the time when the copy is laid or delivered is a director of the company shall be guilty of an offence and in respect of each offence, liable to a fine of 100.

      (2) If any group financial statements of which a copy is laid before a company in a general meeting or delivered to the Commission do not comply with section 345(4) to (7) or section 346 of this Act and with the other requirements of this Act as to the matters to be included in or in a note to those financial statements, every person who at the time when the copy was so laid or delivered was a director of the company shall be guilty of an offence and liable to a fine of 250.

      (3) In proceedings against a person for an offence under this section, it shall be a defence for him to prove that he took all reasonable steps for securing compliance with the requirements in question.

Shareholder's right to obtain copies of financial statements.

349.-(1) Any member of a company, whether or not he is entitled to have sent to him copies of the company's financial statements, and any holder of the company's debentures (whether or not so entitled) shall be entitled to be furnished (on demand and without charge) with a copy of the company's last financial statements.

      (2) If, when a person makes a demand for a document with which he is entitled by this section to be furnished, default is made in complying with the demand within 7 days after its making, the company and every officer of it who is in default shall be guilty of an offence and liable to a daily default fine of 100, unless it is proved that the person has already made a demand for, and been furnished with, a copy of the documents.

Modified financial statements

Entitlement to deliver financial statements in modified form.

350.-(1) In certain cases a company's directors may, in accordance with Part 1 of Schedule 6 to this Act , deliver modified financial statements in respect of a year as a small company.

      (2) For the purposes of sections 351 to 353 and Schedule 6 to this Act , "deliver' means deliver to the Commission.

Qualification of a small company.

351.-(1) A company qualifies as asmall company in a year if for that year the following conditions are satisfied -

      (a) it is a private company having a share capital;

      (b) the amount of its turnover for that year is not more than 2 million or such amount as may be fixed by the Commission;

      (c) its net assets value is not more than 1 million or such amount as may be fixed by the Commission;

      (d) none of its members is an alien;

      (e) none of its members is a Government or a Government corporation or agency or its nominee, and

      (f) the directors between them hold not less than 51 per cent of its equity share capital.

      (2) In applying subsection (1) of this section, to a period which is a company's year but not in fact a year, the maximum figures for turnover in paragraph (b) of that subsection shall be proportionately adjusted.

Modified individual financial statements.

352.-(1) The directors of a company may (subject to section 353 of this Act where the company has subsidiaries) deliver individual financial statements modified as for a small company in the cases specified in subsection (2); and (3) of this section; and Part 1 of Schedule 6 shall apply with respect to the delivery of financial statements so modified.

      (2) In respect of the company's first year the directors may deliver financial statements modified as for a small company, if in that year it qualifies as small.

      (3) The directors may in respect of a company's year subsequent to the first -

      (a) deliver financial statements modified as for a small company if the company qualifies as small and it also so qualified in the preceding year;

      (b) deliver financial statements modified as for a small company (although not qualifying in that year as small), if in the preceding year it so qualified and the directors were entitled to deliver financial statements so modified in respect of that year;

      (c) deliver financial statements modified as for small company if, in that year the company qualifies as small and the directors were entitled under paragraph (b) of this subsection to deliver financial statements so modified for the preceding year (although the company did not in that year qualify as small).

Modified financial statements of holding company.

353.-(1) This section shall apply to a holding company where in respect of a year section 336 of this Act requires the preparation of group financial statements for the company and its subsidiaries.

      (2) The directors of the holding company may not under section 352 of this Act deliver financial statements modified as for a small company, unless the group (that is to say, the holding company and its subsidiaries together) is in that year a small group and the group is small if it would so qualify under section 351 of this Act (applying that section as directed by subsection (3) and (4) of this section, if it were all one company.

      (3) The figures to be taken into account in determining whether the group is small shall be the group account figures, that is -

      (a) where the group financial statements are prepared as consolidated financial statements the figures for turnover and balance sheet total; and

      (b) where the group financial statements are not prepared as consolidated financial statements, the corresponding figures given in the group financial statements, with such adjustment as would have been made if the statements had been prepared in consolidated form;

aggregated in either case with the relevant figures for the subsidiaries (if any) omitted from the group accounts (excepting those for any subsidiary omitted under section 336 (3)(a) of this Act on the ground of impracticability).

      (4) In the case of each subsidiary omitted from the group financial statements, the figures relevant as regards turnover, and balance sheet total shall be those which are included in the financial statements of that subsidiary prepared in respect of its relevant year (with such adjustment as would have been made if those figures had been included in group financial statements prepared in consolidated form).

      (5) For the purposes of subsection (4) of this section, the relevant year of the subsidiary shall be-

      (a) if its year ends with that of the holding company to which the group financial statements relate, that year; and

      (b) if not, the subsidiary's year ending last before the end of the year of the holding company.

      (6) If the directors are entitled to deliver modified financial statements, they may also deliver modified group financial statements, and such group financial statements -

      (a) if consolidated, may be in "accordance with Part II of Schedule 7 (while otherwise comprising or corresponding with group financial statements prepared under section 336 of this Act ); and

      (b) if not consolidated, may be such as (together with any notes) give the same or equivalent information as required by paragraph (a) of this subsection;

and Part III to the Schedule to this Act shall apply to modified group financial statements whether consolidated or not.

Publication of Financial Statements

Publication by a company of full individual or group financial statements.

354.-(1) This section shall apply to the publication by a company of full individual of group financial statements, that is to say, the statements required by section 345 of this Act to be laid before the company in general and delivered to the Commission including the directors' report, unless dispensed with under paragraph 3 of Schedule 6 to this Act , but does not apply to interim financial statements.

      (2) If a company publishes individual financial statements (modified or other) for a year, it shall publish with them the relevant auditors' report.

      (3) If a company required by section 336 of this Act to prepare group financial statements for a year, publishes individual financial statements for that year, it shall also publish with them its group financial statements (which may be modified financial statements but only if the individual financial statements are modified).

      (4) If a company publishes group financial statements (modified or not) otherwise than together with its individual financial statements, it shall publish with them the relevant auditors' report.

      (5) References in this section to the relevant auditor's report are to the auditors' report under section 359 of this Act or, in the case of modified financial statements (individual or group), the auditors' special report under paragraph 10 of Schedule 6 to this Act .

      (6) A company which contravenes any provision of this section and any officer of it who is in default, shall be guilty of an offence and liable to a daily default fine of 100.

Publication of abridged financial statements.

355.-(1) This section shall apply to the publication by a company of abridged financial statements, that is to say, any balance sheet or profit and loss account relating to a year of the company or purporting to deal with any such year, otherwise than as part of full financial statements (individual or group ) to which section 354 of this Act applies.

      (2) The reference in subsection (1) of this section to a balance sheet or profit and loss account, in relation to financial statements published by a holding company, includes an account in any form purporting to be a balance sheet of profit and loss account for the group consisting of the holding company and its subsidiaries.

      (3) If the company publishes abridged financial statements, it shall publish with those statements, a statement indicating -

      (a) that the statements are not full financial statements;

      (b) whether full individual or full group financial statements according as the abridged statements deal solely with the company's own affairs or with the affairs of the company and any subsidiaries have been delivered to the Commission or, in the case of an unlimited company exempted under section 345(4) of this Act from the requirement to deliver financial statements, that the company is so exempted;

      (c) whether the company's auditors have made a report under section 359 of this Act on the company's financial statements for any year with which the abridged financial statements purport to deal; and

      (d) whether any report so made was unqualified (meaning that it was a report, without qualification, to the effect that in the opinion of the person making it, the company's financial statements had been properly prepared).

      (4) Where a company publishes abridged financial statements, it shall not publish with those statements any such report of the auditors as is mentioned in subsection (3) (c) of this section.

      (5) A company which contravenes any provision of this section, and any officer of it who is in default, shall be guilty of an offence and liable to a daily default fine of 100.

Supplementary

Power to alter accounting requirements.

356.-(1) The Minister may after consultation with the Nigerian Accounting Standards Board by regulations in astatutory instrument -

      (a) add to the classes of documents -

              (i) to be comprised in acompany's financial statements for a year to be laid before the company in general meeting as required by section 345, of this Act ; or

              (ii) to be delivered to the Commission under that section, and make provision as to the matters to be included in any document to be added to either class;

      (b) modify the requirements of this Act as to the matters to be stated in a document of any such class; or

      (c) reduce the classes of documents to be delivered to the Commission under section 343 of this Act .

CHAPTER 2 - AUDIT

Appointment of auditors.

357.-(1) Every company shall at each annual general meeting appoint an auditor or auditors to audit the financial statements of the company, and to hold office from the conclusion of that, until the conclusion of the next, annual general meeting.

      (2) At any annual general meeting a retiring auditor, however appointed, shall be re-appointed without any resolution being passed unless -

      (a) he is not qualified for re-appointment; or

      (b) a resolution has been passed at that meeting appointing some other person instead of him on or providing expressly that he shall not be re-appointed; or

      (c) he has given the company notice in writing of his unwillingness to be re-appointed:

      Provided that where notice is given of an intended resolution to appoint some person or persons in place of a retiring auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with, the retiring auditor shall not be automatically re-appointed by virtue of this subsection.

      (3) Where at an annual general meeting, no auditors are appointed or re-appointed, the directors may appoint a person to fill the vacancy.

      (4) The company shall, within one week of the power of the directors under subsection (3) of this section becoming exercisable, give notice of that fact to the Commission; and if a company fails to give notice as required by this subsection, the company and every officer of the company who is in default shall be guilty of an offence and liable to a fine of 100 for every day during which the default continues.

      (5) Subject as hereinafter provided, the first auditors of a company may be appointed by the directors at any time before the company is entitled to commence business and auditors so appointed shall hold office until the conclusion of the next annual general meeting:

Provided that -

      (a) the company may at a general meeting remove any such auditors and appoint in their place any other person who have been nominated for appointment by any member of the company and of whose nomination notice has been given to the members of the company not less than 14 days before the date of the meeting; and

      (b) if the directors fail to exercise their powers under this subsection; the company may, in a general meeting convened for that purpose appoint the first auditors and thereupon the said powers of the directors shall cease.

      (6) The directors may fill any casual vacancy in the office of auditor but while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.

Qualification of auditors.

358.-(1) The provisions of the Institute of Chartered Accountants Act 1965 shall have effect in relation to any investigation or audit for the purposes of this Act so however that none of the following persons shall be qualified for appointment as auditor of a company, that is-

      (a) an officer or servant of the company;

      (b) a person who is a partner of or in the employment of an officer or servant of the company;

      (c) a body corporate,

and inferences in this subsection to an officer or servant shall be construed as not including inferences to an auditor

(2)In the application of subsection 1of this section, the disqualification shall extend and apply to persons who in respect of any period of an audit were in the emplyment of the company or were otherwise connected therewith in any manner

(d) in the decree wherever the word "accountant" appears there shall be substituted the words "chartered accountant"2

      (3) A person shall also not qualify for appointment as an auditor of a company if he is, under subsection (6) of this section, disqualified for appointment as auditor of any other body corporate which is that subsidiary or holding company or a subsidiary of that company's holding company, or would be so disqualified if the body corporate were a company.

      (4) Notwithstanding subsections (1), (2) and (3), of this section, a firm is qualified for appointment as auditor of a company if, but only if, all the partners are qualified for appointment as auditors of it.

      (5) No person shall act as auditor of a company at a time when he knows that he is disqualified for appointment to that office and if an auditor of a company to his knowledge becomes so disqualified during his term of office, he shall thereupon vacate his office and give notice in writing to the company that he has vacated it by reason of that disqualification.

      (6) A person who acts as auditor in contravention of subsection (5), of this section or fails without reasonable excuse to give notice of vacating his office as required by that subsection, shall be guilty of an offence and liable to afine of 500 and, for continued contravention, to a daily default fine of 50.

   

Auditors' report.

359.-(1) The auditors of a company shall make a report to its members on the accounts examined by them, and on every balance sheet and profit and loss account, and on all group financial statements copies of which are to be laid before the company in a general meeting during the auditors' tenure of office.

Practitioner.

      (2) The auditors' report which shall be countersigned by a legal practitioner shall state the matters set out in Schedule 6 to this Act .

      (3) In addition to the report made under subsection (1) of this section, the auditor shall in the case of a public company also make a report to an audit committee which shall be established by the public company.

      (4) The audit committee referred to in subsection (3) of this section, shall consist of an equal number of directors and representatives of the shareholders of the company (subject to a maximum number of six members) and shall examine the auditors report and make recommendations thereon to the annual general meeting as it may think fit:

      Provided, however, that such member of the audit committee shall not be entitled to remuneration and shall be subject to re-election annually.

      (5) Any member may nominate a shareholder as a member of the audit committee by giving notice in writing of such nomination to the secretary of the company at least 21 days before the annual general meeting.

      (6) Subject to such other additional functions and powers that the company's articles of association may stipulate, the objectives and functions of the audit committee shall be to -

      (a) ascertain whether the accounting and reporting policies of the company are in accordance with legal requirements and agreed ethical practices;

      (b) review the scope and planning of audit requirements;

      (c) review the findings on management matters in conjunction with the external auditor and departmental responses thereon;

      (d) keep under review the effectiveness of the company's system of accounting and internal control;

      (e) make recommendations to the Board in regard to the appointment, removal and remuneration of the external auditors of the company; and

      (f) authorise the internal auditor to carry out investigations into any activities of the company which may be of interest or concern to the committee.

Auditors' duties and powers.

360.-(1) It shall be the duty of the company's auditors, in preparing their report to carry out such investigations as may enable them to form an opinion as to the following matters whether-

      (a) proper accounting records have been kept by the company and proper returns adequate for their audit have been received from branches not visited by them;

      (b) the company's balance sheet and (if not consolidated) its profit and loss account are in agreement with the accounting records and returns.

      (2) If the auditors are of opinion that proper accounting records have not been received from branches not visited by them, or if the balance sheet and (if not consolidated) the profit and loss account are not in agreement with the accounting records and returns, the auditors shall state that fact in their report.

      (3) Every auditor of a company shall have a right of access at all time to the company's books, accounts and vouchers, and entitled to require from the company's office such information and explanations as he thinks necessary for the performance of the auditor's duties.

      (4) If the requirements of Part Vand VI of Schedule 3 and Parts 1 to III of Schedule 4 to this Act are not complied with in the accounts, it shall be the auditors' duty to include in their report, so far as they are reasonably able to do so, a statement giving the required particulars.

      (5) It shall be the auditors' duty to consider whether the information given in the directors' report for the year for which the accounts are prepared is consistent with those accounts; and if they are of opinion that it is not, they shall state that fact in their report.

Remuneration of auditors.

361.-(1) The remuneration of the auditors of a company -

      (a) in the case of an auditor appointed by the directors may be fixed by the directors; or

      (b) shall subject to the foregoing paragraph, be fixed by the company in general meeting or in such manner as the company in general meeting may determine.

      (2) For the purposes of subsection (7) of this section, "remuneration" include sums paid by the company in respect of the auditors expenses.

Removal of auditors.

362.-(1) A company may by ordinary resolution remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him.

      (2) Where a resolution removing an auditor is passed at a general meeting of a company, the company shall within 14 days give notice of that fact in the prescribed form to the Commission and if a company fails to give the notice required by this subsection, the company and every officer of it who is in default shall be guilty of an offence and liable to a daily default fine of 100.

      (3) Nothing in this section shall be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor.

Auditors' right to attend company's meetings.

363.-(1) A company's auditors shall be entitled to attend any general meeting of the company and to receive all notices of and other communications relating to any general meeting which a member of the company is entitled to receive and to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as auditor.

      (2) An auditor of a company who has been removed shall be entitled to attend-

      (a) the general meeting at which his term of office would otherwise have expired; and

      (b) any general meeting at which it is proposed to fill the vacancy caused by his removal;

and to receive all notices of, and other communications relating to, any such meeting which any member of the company is entitled to receive, and to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as former auditor of the company.

Supplementary provisions relating to auditors.

364.-(1) A special notice shall be required for a resolution at a general meeting of a company-

      (a) appointing as auditor a person other than a retiring auditor; or

      (b) filling a casual vacancy in the office of auditor; or

      (c) reappointing as auditor a retiring auditor who was appointed by the directors to fill a casual vacancy; or

      (d) removing an auditor before the expiration of his term of office.

      (2) On receipt of notice of such an intended resolution as is mentioned in subsection (1) the company shall forthwith send a copy of it -

      (a) to the person proposed to be appointed or removed, as the case may be;

      (b) in a case within subsection (1)(a), of this section to the retiring auditors; and

      (c) where, in a case within subsection (1) (b) or (c), of this section the casual vacancy was caused by the resignation of an auditor, to the auditor who resigned.

      (3) Where notice is given of such a resolution as is mentioned in subsection (1) (a) or (d) of this section and the retiring auditor or (as the case may be the auditor proposed to be removed makes with respect to the intended resolution representations in writing to the company not exceeding a reasonable length) and requests their notification to members of the company, the company shall (unless the representations are received by it too late for it to do so) -

      (a) in any notice of the resolution given to members of the company state the fact of the representations having been made; and

      (b) send a copy of the representations to every member of the company to whom notice of the meeting is or has been sent.

      (4) If a copy of any such representations is not sent out as required by subsection (3) of this section because they were received too late or because of the company's default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.

      (5) Copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person claiming to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the court may order the company's costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

Resignation of auditors.

365.-(1) An auditor of a company may resign his office by depositing a notice in writing to that effect at the company's registered office; and any such notice shall operate to bring his term of office to an end on the date of which the notice is deposited, or on such later date as may be specified in it.

      (2) An auditor's notice of resignation shall not be effective unless it contains either-

      (a) a statement to the effect that there are no circumstances connected with his resignation which he considers should be brought to the notice of the members or creditors of the company; or

      (b) a statement of any such circumstances as are mentioned above.

      (3) Where a notice under this section is deposited at a company's registered office, the company shall within 14 days send a copy of the notice -

      (a) to the Commission; and

      (b) if the notice contained a statement under subsection (2) (b) of this section, to every person who under section 344 of this Act is entitled to be sent copies of the financial statements.

      (4) The company or any person claiming to be aggrieved may, within 14 days of the receipt by the company of a notice containing a statement under subsection (2) (b) of this section, apply to the court for an order under subsection (5) of this section.

      (5) If on such an application the court is satisfied that the auditor is using the notice to secure needless publicity for defamatory matter, it may, by order, direct that copies of the notice need not be sent out; and the court may further order the company's costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

      (6) The company shall, within 14 days of the court's decision, send to the persons mentioned in subsection (3) of this section -

      (a) if the court makes an order under subsection (5) of this section, a statement setting out the effect of the order.

      (b) if not, a copy of the notice containing the statement under subsection (2)(b) of this section.

      (7) If default is made in complying with the provisions of subsection (3) or (6) of this section, the company and every officer of it who is in default shall be guilty of an offence and liable to a daily default fine of 100.

Right of resigning auditor to requisition company meeting.

366.-(1) Where an auditor's notice of resignation contains a statement under section 365 (2) (b) of this Act , there may be deposited with the notice a requisition signed by the auditor calling on the directors of the company forthwith duly to convene an extra-ordinary general meeting of the company for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting.

      (2) Where an auditor's notice of resignation contains such a statement, the auditor may request the company to circulate to its members before -

      (a) the general meeting at which his term of office would otherwise have expired; or

      (b) any general meeting at which it is proposed to fill vacancy caused by his resignation or convened on his requisition, a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.

      (3) If a resigning auditor request the circulation of a statement by virtue of subsection (2) of this section, the company shall (unless the statement is received by it too late for it to comply)-

      (a) in any notice of the meeting given to members of the company state the fact of the statement having been made; and

      (b) send a copy of the statement to every member of the company to whom notice of the meeting is or has been sent.

      (4) If the directors do not within 21 days from the date of the deposit of a requisition under this section proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every director who fails to take all reasonable steps to secure that a meeting is convened as mentioned above all be guilty of an offence and liable to a fine of 500.

      (5) If a copy of the statement mentioned in subsection (2) of this section is not sent out as required by subsection (3) of this section because it was received too late or because of the company's default, the auditor may (without prejudice to his right to be heard orally) require that the statement shall be read out at the meeting.

      (6) Copies of a statement need not be sent out and the statement need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the court may order the company's costs on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a part to the application.

      (7) An auditor who has resigned his office shall be entitled to attend any such meeting as is mentioned in subsection (2) (a) or (b) of this section and to receive all notices of and other communications relating to any such meeting which any member of the company is entitled to receive, and to be heard at any such meeting which concerns him as former auditor of the company.

Powers of auditors in relation to subsidiaries.

367.-(1) Where a company has a subsidiary, then -

      (a) if the subsidiary is a body corporate incorporated in Nigeria it shall be the duty of the subsidiaries and its auditors to give the auditors of the holding company such information and explanation as those auditors may reasonably require for the purposes of their duties as auditors of the holding company;

      (b) in any other case, shall be the duty of the holding company, if required by its auditors to do so, to take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanation as are mentioned above.

      (2) If a subsidiary or holding company fails to comply the provisions with subsection (1) of this section, the subsidiary or holding company and every officer of it who is in default shall be guilty of an offence and liable to a fine; and if an auditor fails without reasonable excuse to comply with paragraph (a) of the subsection, he shall be guilty of an offence and so liable.

Liability of auditors for negligence.

368.-(1) A company's auditor shall in the performance of his duties, exercise all such care diligence and skill as is reasonably necessary in each particular circumstance.

      (2) Where a company suffers loss or damage as a result of the failure of its auditor to discharge the fiduciary duty imposed on him by subsection (1) the auditor shall be liable for negligence and the directors may institute an action for negligence against him in the court.

      (3) If the directors fail to institute an action against the auditor under subsection (2) of this section, any member may do so after the expiration of thirty days notice to the company of his intention to institute such action.

False statements to

auditors.

369.-(1) An officer of a company commits an offence if he knowingly or recklessly makes to a company's auditors a statement (whether written or oral) which -

      (a) conveys or purports to convey any information or explanation which the auditors require, or are entitled to require, as auditors of the company; and

      (b) is misleading, false or deceptive in a material particular.

      (2) A person guilty of an offence under this section shall be liable to imprisonment for one year or to a fine of 500 or both.

PART XII - ANNUAL RETURNS

Annual return by company limited by shares or guarantee.

370.-Every company shall, once at least in every year, make and deliver to the Commission an annual return in the form, and containing the matters specified in sections 371, 372 or 373 of this Act as may be applicable:

      Provided that a company need not make a return under this section either in the year of its incorporation or, if it is not required by section 213 of this Act to hold an annual general meeting during the following year, in that year.

Annual return by

company having

shares other than

small company.

Schedule 8.

371.-(1) The annual return by a company having shares other than a small company shall contain with respect to the registered office of the company, registers of members and debenture holders, shares and debentures, indebtedness, past and present members and directors and secretary, the matters specified in Part 1 of Schedule 8 to this Act , and the said return shall be in the form set out in Part II of that Schedule or as near to it as circumstances admit.

      (2) Where the company has converted any of its shares into stock and given notice of the conversion to the Commission, the list referred to in paragraph 5 of Part 1 of Schedule 8 to this Act shall state the amount of stock held by each of the existing members instead of the amount of shares and the particulars relating to shares required by that paragraph.

      (3) The return may, in any year, if the return for either of the two immediately preceding years has given as at the date of that return the full particulars required by the said paragraph 5 of Schedule 8 to this Act , gives only such particulars required by that paragraph as relate to persons ceasing to be or becoming members since the date of the last return and to shares transferred since that date in the amount of stock held by a member.

Annual return by small company. Schedule 9.

372.- The annual return by a small company shall contain the matters specified in Part 1 of Schedule 9 to this Act and the return shall be in the form set out in Part II of that Schedule or as near to it as circumstances admit.

Annual return by company limited by guarantee. Schedule 10.

373.-(1) The annual return by a company limited by guarantee shall be in the form prescribed in Schedule 10 to this Act or as near to it as circumstances admit.

      (2) There shall be annexed to the return a statement containing particulars of the total amount of the indebtedness of the company in respect of all mortgages and charges which are required to be registered with the Commission under this Act .

Time for completion of annual return.

374.- The annual return shall be completed within 42 days after the annual general meeting for the year, whether or not that meeting is the first or only ordinary general meeting, of the company in that year, and the company shall forthwith forward to the Commission a copy signed both by a director and by the secretary of the company.

Documents to be a annexed to annual return.

375.-(1) Subject to the provisions of section 377 of this Act , there shall be annexed to the annual return -

      (a) a written copy, certified both by a director and by the secretary of the company to be a true copy, of every balance sheet and profit and loss account laid before the company in general meeting held in the year to which the return relates (including every document required by law to be annexed to the balance sheet); and

      (b) a copy certified as aforesaid, of the report of the auditors on, and of the report of the directors accompanying, each such balance sheets.

      (2) If any such balance sheet as is mentioned in subsection (1) of the section or document required by law to be annexed does not comply with the requirement of the law as in force at the date of the audit with respect to the form of balance sheets or documents aforesaid, as the case may be, there shall be made such additions to and corrections in the copy as would have been required to be made in the balance sheet or document in order to comply with the requirements, and the fact that the copy has been so amended shall be stated on it.

Certificates by private company and small company in annual return.

376.-(1) A private company shall send with the annual return required by section 371, 372 or 373 of this Act acertificate signed both by a director and by the secretary of the company that the company has not, since the date of the last return, or, in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company, and, where the annual return discloses the fact that the number of members of the company exceeds 50, also a certificate so signed that the excess consists wholly of persons who under subsection (3) of section 22 of this Act are not included in reckoning the number of 50.

      (2) A small company shall in addition to the certificate required under subsection (1) of this section, send with the annual return a certificate signed by a director and the secretary that -

      (a) it is a private company limited by shares;

      (b) the amount of its turn-over for that year is not more than 2 million or such amount as may be fixed by the Commission;

      (c) its net assets value is not more than 1 million or such amount as may be fixed by the Commission;

      (d) none of its members is an alien;

      (e) none of its members is Government, a Government agent or nominee; and

      (f) the directors among them hold not less than 51 per cent of the equity share capital of the company.

Exception in certain cases of unlimited companies and small companies from requirements of section 375.

377.-(1) An unlimited company shall be exempted from the requirements imposed by section of this Act 375 as to documents to be annexed of this Act to the annual return if, but only if-

      (a) at no time during the period to which the return relates has it been to its knowledge, the subsidiary of a company that was then limited and at no such time to its knowledge, have there been held or exercisable by or on behalf of two or more companies that were limited, shares or powers which had they been held or exercisable by one of them, would have made the company its subsidiary;

      (b) at no such time has it been the holding company of a company that was then limited.

      (2) A small company shall also be exempted from the requirements imposed by section 375 of this Act provided that it complies with the provision of section 351 of this Act .

Penalty for non-compliance with sections 370 to 376.

378.-(1) If a company required to comply with any of the provisions of sections 370 to 376 of this Act fails to do so, the company and every director or officer of the company who is in default shall be guilty of an offence and liable to a fine of 1,000 in the case of a public company and 100 in the case of a private company.

      (2) For the purposes of subsection (1) of this section, "officer" includes any person in accordance with those directions or instructions the directors of the company are accustomed to act.

PART XIII - DIVIDENDS AND PROFITS

Declaration of dividends and payment of interim dividend.

379.-(1) A company may, in general meeting, declare dividends in respect of any year or other period only on the recommendation of the directors.

      (2) The company may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the company.

      (3) The general meeting shall have power to decrease the amount of dividend recommended by the directors, but shall have no power to increase the recommended amount.

      (4) Where the recommendation of the directors of a company with respect to the declaration of a dividend is varied in accordance with subsection (3) of this section by the company in general meeting, a statement to that effect shall be included in the relevant annual return.

      (5) Subject to the provisions of this Act , dividends shall be payable to the shareholders only out of the distributable profits of the company.

Distributable profits.

380. Subject to the company being able to pay its debts as they fall due, the company may pay dividends out of the following profits -

      (a) profits arising from the use of the company's property although it is a wasting assets;

      (b) revenue reserves;

      (c) realised profit on a fixed asset sold, but where more than one asset is sold, the net realised profit on the assets sold.

Restriction on declaration and payment of dividends.

381. A company shall not declare or pay dividend if there are reasonable grounds for believing that the company is or would be, after the payment unable to pay its liabilities as they become due.

Unclaimed dividends.

382.-(1) Where dividends are returned to the company unclaimed, the company shall send a list of the names of the persons entitled with the notice of the next annual general meeting to the members.

      (2) After the expiration of 3 months of the notice mentioned in subsection (1) of this section, the company may invest the unclaimed of this section dividend for its own benefit in an investment outside the company and no interest shall accrue on the dividends against the company.

      (3) Where dividends have been sent to members and there is an omission to send to some members due to the fault of the company, the dividends shall earn interest at the current bank rate from three months after the date on which they ought to have been posted.

      (4) For the purpose of liability, the date of posting the dividend warrant shall be deemed to be the date of payment and proof of whether it has been sent is a question of fact.

Reserve and capitalization.

383.-(1) The directors may, before recommending any dividend, set aside out of the profits of the company such sums as they think proper as a reserve or reserves which shall, at the discretion of the directors, be applicable for any purpose to which the profits of the company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the company or be invested in such investments (other than shares of the company) as the directors may from time to time think fit; and the directors may also without placing the same to reserve, carry forward any profits which they may think prudent not to distribute.

      (2) The company in general meeting may upon the recommendation of the directors resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the company's reserve accounts or to the credit of the profit and loss account or otherwise available for distribution.

      (3) Such sum may be set free for distribution among the members who would have been entitled to dividends in the same proportions on condition that the same be not paid in cash but be applied either on or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up on full unissued shares or debentures of the company to be allotted and distributed to creditors as fully paid up.

      (4) The company may decide by a resolution what part is to be distributed in cash or ion shares and the directors shall give effect to such resolution.

      (5) Share premium account and a capital redemption reserve fund may, for the purposes of this subsection, only be applied in the paying up of unissued shares to be issued to members of the company as fully paid bonus shares.

      (6) Where a resolution is under subsections (2) to (5) of this section passed, the directors shall make all appropriations and applications of the undivided profits resolved to be capitalised thereby, and all allotments and issues of fully-paid shares or debentures, if any, and generally do all acts and things required to give effect to it.

      (7) The directors shall have power to make such provision by the issue of fractional certificates or by payment in cash or otherwise as they think fit in the case of shares or debentures becoming distributable in fractions.

      (8) Any person may be authorised by the directors to enter on behalf of all the members entitled under this section into an agreement with the company to provide for the allotment to them respectively, credited as fully paid up, of any further shares or debentures to which they may be entitled upon such capitalization, or (as may required for the payment up by the company on their behalf of the case amounts or any part of the amounts remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding on all such members.

Employees' shares and profit sharing.

384. If under his contract of service, an employee is entitled to share in the profits of the company as an incentive, he shall be entitled to share in the profits of the company, whether or not dividends have been declared.

Right of the shareholders to sue for dividends.

385. Dividends shall be special debts due to, and recoverable by, shareholders within 12 years, and actionable only when declared.

Liability for paying dividend out of capital.

386.-(1) All directors who knowingly pay, or are party to the payment of dividend out of capital or otherwise in contravention of this Part of this Act shall be personally liable jointly and severally to refund to the company any amount so paid.

      (2) Such directors shall have the right to recover the dividend from shareholders who receive it with knowledge that the company had no power to pay it.

PART XIV - RECEIVERS AND MANAGERS

Appointment of Receivers and Managers

Disqualification for appointment as a receiver or manager.

387.-(1) The following persons shall not be appointed or act as receivers or managers of any property or undertaking of any company -

      (a) an infant,

      (b) any person found by a competent court to be of unsound mind;

      (c) a body corporate;

      (d) an undischarged bankrupt, unless he shall have been given leave to act as a receiver or manager of the property or undertaking of the company by the court by which he was adjudged bankrupt;

      (e) a director or auditor of the company;

      (f) any person convicted of any offence involving fraud, dishonesty, official corruption or moral turpitude and who is disqualified under section 254 of this Act .

      (2) Any appointment made in contravention of the provisions of subsection (1) of this section shall be void and if any of the persons named in paragraphs (c), (d), (e) and (f) of that subsection shall act s a receiver or manager, he shall be guilty of an offence and liable to a fine not exceeding 2,000 in the case of a body corporate or, in the case of an individual to imprisonment for a term not exceeding 6 months or to a fine not exceeding 500.

      (3) Where any of the persons mentioned in subsection (1) of this section is at the commencement of this Act acting as a receiver or manager, he may be removed by the Court on an application by a person interested.

Power of the court to appoint official receiver for debenture holders and others.

388. Where an application is made to the court to appoint a receiver on behalf of the debenture holder or other creditors of a company which is being wound up by the court, an official receiver may be appointed.

Appointment of receivers and managers by the Court.

389.-(1) Notwithstanding the provisions of paragraph (d) of subsection (1) of section 209 of this Act , the court may, on the application of a person interested, appoint a receiver or a receiver and manager of the property or undertaking of a company if -

      (a) the principal money borrowed by the company or the interest is in arrear; or

      (b) the security or property of the company is in jeopardy.

      (2) A receiver or manager of any property or undertaking of a company appointed by the court shall be deemed to be an officer of the court and not of the company and shall act in accordance with the directions and instructions of the court.

Receivers and managers appointed out of Court.

390-(1) A receiver or manager of any property or undertaking of a company appointed out of court under a power contained in any instrument shall, subject to section 393 of this Act , be deemed to be an agent of the person or persons on whose behalf he is appointed and, if appointed manager of the whole or any part of the undertaking of a company he shall be deemed to stand in a fiduciary relationship to the company and observe the utmost good faith towards it in any transaction with it or on its behalf.

      (2) Such a manager shall-

      (a) act at all times in what he believes to be the best interests of the company as a whole so as to preserve its assets, further its business, and promote the purposes for which it was formed, and in such manner as a faithful, diligent, careful and ordinarily skilful manager would act in the circumstances;

      (b) in considering whether a particular transaction or course of action is in the best interest of the company as a whole may have regard to the interests of the employees, as well as the members of the company, and, when appointed by, or as a representative of, a special class of members or creditors may give special, but not exclusive, consideration to the interests of that class.

      (3) Nothing contained in the articles of a company, or in any contract, or in any resolution of a company shall relieve any manager from the duty to act in accordance with subsection (2) of this section or relieve him from any liability incurred as a result of any breach of such duty.

Power of a receiver or manager appointed out of court to apply to the court for directions.

391. A receiver or manager of the property of a company appointed in accordance with the provisions of subsection (1) of section 390 of this Act may apply to the court for direction in relation to any particular matter arising in connection with the performance of his functions, and on any such application, the court may give such directions or make such order declaring the rights of persons before the court or otherwise, as it thinks just.

Notification that a receiver or manager has been appointed.

392.-(1) Where a receiver or manager of the property of a company has been appointed, notice shall be given to the Commission within 14 days, indicating the terms of and remuneration for the appointment, and every invoice, order for goods or business letter issued by or on behalf of the company, or the receiver or manager or the liquidator of the company being a document on or in which the company's name appears, shall contain a statement that a receiver or manager has been appointed.

      (2) If default is made in complying with this section, the company and any of the following persons, who knowingly and wilfully authorises or permits the default, namely, any officer of the company, any liquidator of the company and any receiver or manager, shall be guilty of an offence and liable to a fine not exceeding 25 for every day during which the default continues.

Duties, powers and liabilities of receivers and managers

Duties, powers, etc, of receivers and managers.

393.-(1) A person appointed a receiver of any property of a company shall subject to the rights of prior incumbrancers, take possession of and protect the property, receive the rents and profits and discharge all out-goings in respect thereof and realise the security for the benefit of those on whose behalf he is appointed, but unless appointed manager he shall not have power to carry on any business or undertaking.

      (2) A person appointed manager of the whole or any part of the undertaking of a company shall manage the same with a view to the beneficial realisation of the security of those on whose behalf he is appointed.

      (3) Without prejudice to subsection (1) or (2) of this section, where a receiver or manager is appointed for the whole or substantially the whole of a company's property, the powers conferred on him by the debentures by virtue of which he was appointed shall be deemed to include (except in so far as they are inconsistent with any of the provisions of those debentures) the powers specified in Schedule 11 to this Act .

      (4) As from the date of appointment of a receiver or manager, the powers of the directors or liquidators in a members' voluntary winding up to deal with the property or undertaking over which he is appointed shall cease unless and until the receiver or manager is discharged.

      (5) If, on the appointment of a receiver or manager, the company is being wound up under the provision relating to creditors' voluntary winding up, or the property concerned is in the hands of some other officer of the court, the liquidator or officer shall not be bound to relinquish control of such property to the receiver or manager except under the order of the court.

Liabilities of receivers and managers on contracts.

394.-(1) A receiver or manager of any property or undertaking of a company shall be personally liable on any contract entered into by him except in so far as the contract otherwise expressly provides.

      (2) As regards contracts entered into by a receiver or manager in the proper performance of his functions, such receiver or manager shall, subject to the rights of any prior incumbrancers, be entitled to an indemnity in respect of liability thereon out of the property over which he has been appointed to act as receiver or manager.

      (3) A receiver or manager appointed out of court under a power contained in any instrument shall also be entitled, as regards contracts entered into by him with the express or implied authority of those appointing him, to an indemnity in respect of liability thereon from those appointing him to the extent to which he is unable to recover in accordance with subsection (2) of this section.

Power of court to fix remuneration on application of liquidator.

395.-(1) The Court may, on the application of the company or the liquidator of a company, by order fix the amount to be paid by way of remuneration to any person who, under the powers contained in any instrument, has been appointed as receiver or manager of the property of the company.

      (2) The powers of the Court under subsection (1) of this section shall, where no previous order has been made with respect thereto under that subsection-

      (a) extend to fixing the remuneration for any period before the making of the order or the application therefor; and

      (b) be exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application therefor; and

      (c) extend where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, to requiring him or his personal representatives to account for the excess or such part thereof as may be specified in the order:

      Provided that the power conferred by paragraph (c) of this subsection shall not be exercised as respects any period before the making of the application for the order unless in the opinion of the court there are special circumstances making it proper for the power to be so exercised.

      (3) The court may from time to time on an application made either by the company or the liquidator or by the receiver or manager, vary or amend an order made under subsection (1) of this section.

      (4) This section shall apply whether the receiver or manager has been appointed before or after the commencement of this Act , and to periods before, as well as to periods after, the commencement of this Act .

Procedure after appointment

Provisions as to information where receiver or manager appointed.

396.-(1) Where a receiver or manager of the whole or substantially the whole of the property of a company (hereafter in this section and in section 397 of this Act referred to as "the receiver") has been appointed on behalf of the holders of any debentures of the company secured by a floating charge, then subject to the provisions of this section and of section 397 of this Act -

      (a) the receiver shall forthwith send notice to the company of his appointment and the terms; and

      (b) there shall, within 14 days after receipt of the notice, or such longer period as may be allowed by the court or by the receiver, be made out and submitted to the receiver in accordance with section 397 of this Act , a statement in the prescribed form as to the affairs of the company and

      (c) the receiver shall within 2 months after receipt of the said statement send -

              (i) to the Commission or to the court a copy of the statement and of any comments he sees fit to make thereon and in the case of the Commission also asummary of the statement and of his comments if any thereon;

              (ii) to the company a copy of any such comments as aforesaid or if he does not see fit to make any comment, a notice to that effect; and

              (iii) to any trustees for the debenture holders on whose behalf he has been appointed and, so far as he is aware of their addresses, to all such debenture holders a copy of the said summary.

      (2) The receiver shall within 2 months, or such longer period as the court may allow after the expiration of the period of 12 months from the date of his appointment and of every subsequent period of 12 months, and within 2 months or such longer period as the court may allow after he ceases to act as receiver or manager of the property of the company, send to the Commission, to any trustees for the debenture holders of the company on whose behalf he was appointed, to the company and (so far as he is aware of their addresses) to all such debenture holders an abstract in the prescribed form showing his receipts and payments during that period of 12 months, or, where he ceases to act as aforesaid, during the period from the end of the period to which the last preceding abstract relate up to the date of his so ceasing, and the aggregate amounts of his receipts and of his payments during all preceding periods since his appointments.

      (3) Where the receiver is appointed under the powers contained in any instrument, this section shall have effect-

      (a) with the omission of the references to the court in subsection (1) of this section; and

      (b) with the substitution for the references to the court in subsection (2) of this section, of references to the Commission; and in any other case references to the court shall be taken as referring to the court by which the receiver was appointed.

      (4) Subsection (1) of this section shall not apply in relation to the appointment of a receiver or manager to act with an existing receiver or manager or in place of a receiver or manager dying or ceasing to act, except that, where that subsection applies to a receiver or manager who dies or ceases to act before it has been fully complied with, the references in paragraphs (b) and (c) thereof to the receiver shall subject to subsection (5) of this section, include references to his successor and to any continuing receiver or manager and nothing in this subsection shall be taken as limiting the meaning of the expression "the receiver" where used in, or in relation to, subsection (2) of this section.

      (5) This section and section 397 of this Act , where the company is being wound up, shall apply notwithstanding that the receiver or manager and the liquidator are the same person.

      (6) Nothing in subsection (2) of this section shall be taken to prejudice the duty of the receiver to render proper accounts of his receipts and payments to the persons to whom, and at the times at which he may be required to do so apart from that subsection.

      (7) If the receiver makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

Special provisions as to statement submitted to receiver.

397.-(1) The statements as to the affairs of a company required by section 396 of this Act , to be submitted to the receiver (or his successor) shall show as at the date of the receiver's appointment, the particulars or the company's assets, debts and liabilities, the names, residences and occupations of its creditors, the securities held by them respectively, the dates when the securities were respectively given and such further or other information as may be prescribed.

      (2) The statement shall be submitted by, and be verified by affidavit of one or more of the persons who are at the date of the receiver's appointment, the directors and by the person who is at that date the secretary of the company, or by such of the persons hereafter in this subsection mentioned as the receiver (or his successor), subject to the direction of the court, may require to submit and verify the statement, that is to say, persons -

      (a) who are or have been officers of the company;

      (b) who have taken part in the information of the company at any time within one year before the date of the receiver's appointment;

      (c) who are in the employment of the company, or have been in the employment of the company within the year, and are in the opinion of the receiver capable of giving the information required;

      (d) who are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.

      (3) Any person making the statement and affidavit shall be allowed, and shall be paid by the receiver (or his successor) out of his receipts, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the receiver (or his successor) may consider reasonable, subject to an appeal to the court.

      (4) Where the receiver is appointed under the powers contained in any instrument, this section shall have effect with the substitution for references to the court of references to the commission and references to an affidavit, of references to a statutory declaration; and in any other case references to the court shall be taken as referring to the court by which the receiver was appointed.

      (5) If any person without reasonable excuse makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 50 for every day during which the default continues.

      (6) References in this section to the receiver's successor shall include a continuing receiver or manager.

Accounts by receiver or manager

Delivery to Commission of accounts of receivers and managers.

398.-(1) Except where section 396 (2) of this Act applies, every receiver or manager of the property of acompany who has been appointed under the powers contained in any instrument shall, within one month or such longer periods as the Commission may allow, after the expiration of the period of 6 months from the date of his appointment, and of every subsequent period of 6 months, and within one month after he ceases to act as receiver or manager, deliver to the Commission for registration an abstract in the prescribed form showing his receipts and his payments during that period of 6 months, or where he ceases to act as aforesaid during the period from the end of the period to which the last preceding abstract relate up to the date of his ceasing, and the aggregate amount of his receipts and of his payments during all preceding periods since his appointment.

      (2) Every receiver or manager who makes default in complying with the provisions of this section shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

Duty as to returns

Enforcement of duty of receivers and managers to make returns, etc.

399.-(1) If any receiver or manager of the property of a company having -

      (a) made default in filing, delivering or making any returns, account or other document, or in giving any notice, which a receiver or manager is by law required to file, delivers, makes or gives or fails to make good the default within 14 days after the service on him of a notice requiring him to do so; or

      (b) been appointed under the powers contained in any instrument has, after being required at any time by the liquidator of the company so to do, fails to render proper accounts of his receipts and payment and to vouch the same and to pay over to the liquidator the amount properly payable to him, the Court may, on an application made for the purpose, make an order directing the receiver or manager, as the case may be; to make good the default within such time as may be specified in the order.

      (2) In the case of any such default as is mentioned in paragraph (a) of subsection (1) of this section, an application for the purposes of this section may be made by any member or by the Commission, and in the case of any such default as is mentioned in paragraph (b) of that subsection, the application shall be made by the liquidator, and in either case the order may provide that all costs shall be borne by the receiver or manager, as the case may be.

      (3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on receivers in respect of any such default as is mentioned in subsection (1) of this section.

Construction of references

Construction of references to receivers and managers.

400. It is hereby declared that, except where the context otherwise requires -

      (a) any reference in this Act to a receiver or manager of the property of a company, or to a receiver thereof, includes a reference to a receiver or manager, or as the case may be to a receiver of part only of that property and to a receiver only of the income arising from that property or from part thereof; and

      (b) any reference in this Act to the appointment of a receiver or manager under powers contained in any instrument, includes a reference to an appointment made under powers which, by virtue of any enactment, are implied in and have effect as if contained in an instrument.

PART XV - WINDING UP OF COMPANIES

CHAPTER 1 - PRELIMINARY

Modes of Winding Up

Modes of Winding up.

401.-(1) The winding up of a company may be effected -

      (a) by the court; or

      (b) voluntarily; or

      (c) subject to the supervision of the court.

      (2) The provisions of this Act with respect to winding up shall apply, unless the contrary appears, to the winding up of a company in any of those modes.

Contributories

Liability as contributories of present and past members.

402. In the event of a company being wound up, every present and past member shall be liable to contribute to the assets of the company as provided in section 92 of this Act .

Definition of contributory.

403. The term "contributory" means every person liable to contribute to the assets of a company in the event of its being wound up and for the purposes of all proceedings for determining and all proceedings prior to the final determination of the persons who are to be deemed contributories, the expression shall include any person alleged to be a contributory.

Nature of liability of contributory.

404. The liability of a contributory shall create a debt of the nature of a specialty accruing and due from him the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.

Contributories in case of death of member.

405.-(1) If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives and his heirs and devises, shall be liable in due course of administration to contribute to the assets of the company in discharge of his liability and they shall be contributories accordingly.

      (2) Where the personal representatives are placed on the list of contributories, the heirs or devisees need not be added; but they may be added as and when the court thinks fit.

      (3) If the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the whole or any part of the estate of the deceased contributory, and for compelling payment out of it of the money due.

Contributories in case of bankruptcy of member.

406.-(1) If a contributory becomes bankrupt, either before or after he has been placed on the list of contributories, then-

      (a) his trustee in bankruptcy shall represent him for all the purposes of the winding up, and shall be acontributory accordingly, and may be called on to admit to proof against the estate of the bankrupt, or otherwise to allow to be paid out of his assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the assets of the company; and

      (b) there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as already made.

      (2) The provisions of this section shall extend and apply with all necessary changes to the case of an insolvent person.

CHAPTER 2 - WINDING UP BY THE COURT

Jurisdiction

Jurisdiction as to winding up.

407.-(1) The court having jurisdiction to wind up a company shall be the Federal High Court within whose area of jurisdiction the registered office or head office of the company is situate.

      (2) For the purpose of this section, "registered office or head office" means the place which has longest been the registered office or head office of the company during the 6 months immediately preceding the presentation of the petition for winding up.

Cases in which company may be wound up by Court

Circumstances in which companies may be wound up by court.

408. A company may be wound up by the court if -

      (a) the company has by special resolution resolved that the company be wound up by the court;

      (b) default is made in delivering the statutory report to the Commission or in holding the statutory meeting;

      (c) the number of members is reduced below two;

      (d) the company is unable to pay its debts;

      (e) the court is of opinion that it is just and equitable that the company should be wound up.

Definition of inability to pay debts.

409. A Company shall be deemed to be unable to pay its debts if -

      (a) a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 2,000 then due has served on the company, by leaving it at its registered office or head office, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor; or

      (b) execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

      (c) the court, after taking into account any contingent or prospective liability of the company is satisfied that the company is unable to pay its debts.

Petitions for winding up and effects thereof

Provisions as to application for winding up.

410.-(1) An application to the court for the winding up of a company shall be by petition presented subject to the provisions of this section, either by -

      (a) the company;

      (b) a creditor, including a contingent or prospective creditor of the company;

      (c) the official receiver;

      (d) a contributory;

      (e) a trustee in bankruptcy to, or a personal representative of a creditor or contributory;

      (f) the Commission under section 323 of this Act ;

      (g) a receiver if authorised by the instrument under which he was appointed; or

      (h) by all or any of those parties, together or separately.

      (2) Notwithstanding anything in subsection (1) of this section -

      (a) a contributory shall not be entitled to present a petition for winding up a company unless -

              (i) the number of members is reduced below two; or

              (ii) the shares in respect of which he is contributory or some of them, were originally allotted to him or have been held by him, and registered in his name, for at least 6 months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder;

      (b) a winding up petition shall not, if the ground of the petition is default in delivering the statutory report to the Commission or in holding the statutory meeting, be presented by any person except a shareholder, or before the expiration of 14 days after the last day on which the meeting should have been held;

      (c) the court shall not hear a winding up petition presented by a contingent or prospective creditor until sufficient security for costs has been given, and a prima facie case for winding up has been established to its satisfaction;

      (d) in any case falling within section 320 or 321 of this Act (proceedings on inspector's reports) or paragraph (e) of section 408 of this Act , a winding up petition may be presented by the Commission with the approval of the Attorney-General of the Federation.

      (3) Where a company is being wound up voluntarily or subject to supervision, a winding up petition may be presented by the official receiver attached to the court, as well as by any other person authorised in that behalf under the other provisions of this section; but the court shall not make a winding up order on any such petition unless it is satisfied that the voluntary winding up or winding up subject to supervision cannot be continued with due regard to the interests of the creditors or contributories.

      (4) A contributory shall be entitled to present a winding up petition notwithstanding that there may not be assets available on the winding up for distribution to contributories.

Powers of court on hearing petition.

411.-(1) On hearing a winding up petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order that it thinks fit; but the court shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.

      (2) Unless it appears to the court that some other remedy is available and that the petitioners are acting unreasonably in seeking a winding up order instead of pursuing that remedy, the court, on hearing a petition by contributory members of acompany for relief by winding up on the ground that it would be just and equitable so to do, shall make the order as prayed if of opinion that the petitioners are entitled to the relief sought.

      (3) Where a petition is presented on the ground of default in delivering the statutory report to the Commission or in holding the statutory meeting, the court instead of making a winding up order, may direct the delivery of the statutory report or the holding of a meeting as the case may require, and order the costs to be paid by the persons who, ion the opinion of the court, are responsible for the default.

Power to stay or restrain proceedings against company.

412. Where a winding up petition has been presented and an action or other proceeding against a company is instituted or pending in any court (in this section referred to as "the court concerned"), the company or any creditor or contributory may, before the making of the winding up order, apply to the court concerned for an order staying proceedings; and the court concerned may, with or without imposing terms, stay or restrain proceedings, or if it thinks fit, refer the case to the court hearing the winding up petition.

Avoidance of dispositions of property, etc, after commencement of winding up.

413. In a winding up by the court, any disposition of the property of the company, including things in action and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up shall, unless the court otherwise orders, be void.

Avoidance of attachments, etc.

414. Where a company is being wound up by the court, any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up shall be void.

Commencement of Winding up

Commencement of a winding up by the court.

415.-(1) Where, before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.

      (2) In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.

Consequences of Winding up order

Copy of order to be forwarded to Commission.

416. On the making of a winding up order, a copy of the order shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Commission which shall make a minute thereof in its books relating to the Company.

Actions stayed on winding up order

417. If a winding up order is made or a provisional liquidator is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such terms as the Court may impose.

Effect of winding up order.

418. An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if made on the joint petition of a creditor and of a contributory.

Official Receiver

Definition of official receiver.

419.-For the purpose of this Act and so far as it relates to the winding up of companies by the court, "official receiver" means the deputy Chief Registrar of the Federal High Court or an officer designated for the purpose by the Chief Judge of the Court.

      (2) Any such officer shall, for the purpose of his duties under this Act , be styled "the official receiver".

Statement of company's affairs to be submitted to official receiver.

420.-(1) Where the court has made a winding up order or appointed a provisional liquidator there shall, unless the court thinks fit to order otherwise and so orders, be made out and submitted to the official receiver statement as to the affairs of the company in the prescribed form, verified by affidavit, and showing the particulars of its assets, debts and liabilities, the names, residences and occupations of its creditors the securities held by them respectively, the dates when the securities were respectively given the list of members and the list of charges and such further or other information as may be prescribed or as the official receiver may require.

      (2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and the person who as at that date the secretary of the company, or by such of the persons mentioned in this subsection as the official receiver, subject to the direction of the court, may require to submit and verify the statement, that is to say persons who-

      (a) are or have been officers of the company;

      (b) have taken part in the formation of the company at any time within one year before the relevant date;

      (c) have been or are in the employment of the company within the said year, and are in the opinion of the official receiver capable of giving the information required;

      (d) are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.

      (3) The statement shall be submitted within 14 days from the relevant date or within such extended time as the official receiver or the court may for special reasons appoint.

      (4) Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the official receiver or provisional liquidator, as the case may be, out of the assets of the company such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official receiver may consider reasonable, subject to an appeal to the Court.

      (5) If any person without reasonable excuse, makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

      (6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on a payment of the prescribed fee to inspect the statement submitted in pursuance of this section, and to a copy of or extract from it.

      (7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of contempt of court and shall, on the application of the liquidator or of the official receiver, be punishable accordingly.

      (8) In this section, the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment and in a case where no such appointment is made, the date of the winding up order.

Report by official receiver.

421.-(1) If a winding up order is made, the official receiver shall as soon as practicable after receipt of the statement to be submitted under section 420 of this Act or where the court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the court -

      (a) as to the amount of capital issued, subscribed and paid up, and the estimated amount of assets and liabilities; and

      (b) if the company has failed, as to the causes of the failure; and

      (c) whether, in his opinion, further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company.

      (2) The official receiver may if he thinks fit, make further reports, stating the manner in which the company was formed and whether in his opinion fraud has been committed by any person in its promotion or formation, or by any officer of the company in relation to the company since its formation and the reports may include any other matters which, in his opinion, it is desirable to bring to the notice of the court.

      (3) If any further report under this section indicates the commission of fraud, the court shall have the further powers provided in section 450 of this Act (which confers authority to order public examination of certain officials).

Liquidators

Appointment, remuneration and title of liquidators.

422.-(1) The court may appoint a liquidator or liquidators for the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose and where there is a vacancy, the official receiver shall by virtue of his office, act as liquidator until such time as the vacancy is filled.

      (2) At any time after the presentation of a petition and before the making of a winding up order, the appointment shall be provisional and the court making the appointment may limit and restrict the powers of the liquidator by the order appointing him.

      (3) In the application of the foregoing provisions of this section -

      (a) if a provisional liquidator is to be appointed before the making of a winding up order, the official receiver or any other fit person may be so appointed;

      (b) on the making of a winding up order, if no liquidator is appointed, the official receiver shall by virtue of his office become the liquidator;

      (c) the official receiver in his capacity as provisional liquidator shall, and in any other case may, summon meetings of creditors and contributories of the company to be held separately for the purpose of determining whether or not an application is to be made to the court for appointing a liquidator in place of the official receiver;

      (d) if a person other than the official receiver is appointed liquidator he shall not be capable of acting in that capacity until he has notified his appointment to the Commission and given security in the prescribed manner to the satisfaction of the court.

      (4) If more than one liquidator of a company is appointed by the court, the court shall declare whether anything by this Act required or authorised to be done by a liquidator is to be done by all or any one or more of them.

      (5) A liquidator appointed by the court may resign, or, on cause shown be removed by the court; and any vacancy in the office of a liquidator so appointed shall be filled by the court.

      (6) Where a person other than the official receiver is appointed a liquidator, he shall receive salary in an amount, or remuneration by way of percentage or otherwise, as the court may direct; and, if more such persons than one are appointed liquidators, their remuneration shall be distributed among them in such proportions as the court directs.

      (7) Where a liquidator of a company is appointed, he shall, after his individual name -

      (a) if he is the official receiver be described as "official receiver and liquidator of (add here name of the company)" and

      (b) in any other case be described as "liquidator of (add here name of the company)".

      (8) The acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.

      (9) If a liquidator is appointed under this section, all the powers of the directors shall cease, except so far as the court may by order sanction the continuance thereof.

Custody of company's property.

423. In a winding up by the court the liquidator shall take into his custody, or under his control, all the property and choses in action to which the company is or appears to be entitled.

Vesting of property of company in liquidator.

424. Where a company is being wound up by the court, the court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon, but subject to the requirements or registration under any particular enactment, the property to which the order relates shall vest accordingly; and the liquidator may, after giving such indemnity if any, as the court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.

Powers of liquidator.

425.-(1) The liquidator in a winding up by the court shall have power, with the sanction either of the court or of the committee of inspection, to -

      (a) bring or defend any action or other legal proceeding in the name and on behalf of the company;

      (b) carry on the business of the company so far as may be necessary for its beneficial winding up;

      (c) appoint a legal practitioner or any other relevant professionals to assist him in the performance of his duties;

      (d) pay any classes of creditors in full;

      (e) make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;

      (f) compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect thereof.

      (2) The liquidator in winding up by the court shall have power to -

      (a) sell the property of the company of whatever nature by public auction or private contract, with power to transfer the whole thereof to any person or company or to sell the same in parcels;

      (b) do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose to use, when necessary, the company's seal;

      (c) prove, rank and claim in the bankruptcy, insolvency or sequestration of any contributory for any balance against his estate, and to receive dividends in the bankruptcy, insolvency or sequestration in respect of that balance as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors;

      (d) draw, accept, make and indorse any bill of exchange or promissory note in the name and on behalf of the company with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made or indorsed by or on behalf of the company in the course of its business;

      (e) raise on the security of the assets of the company any money requisite;

      (f) take out in his official name letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself;

      (g) appoint an agent to do any business which the liquidator is unable to do himself;

      (h) do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.

      (3) The exercise by the liquidator in a winding up by the court of the powers conferred by this section shall be subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers.

Liquidator to give information, etc. to official receiver.

426. If during the winding up of acompany by the court a person other than the official receiver is appointed liquidator, he shall give the official receiver such information and access to and facilities for inspecting the books and documents of the company, and generally any aid requisite or necessary for enabling that officer to perform his duties under this Act .

Exercise and control of liquidator's power.

427.-(1) Subject to the provisions of this Act , the liquidator of a company being wound up by the court shall, in the administration and distribution of the assets of the company among its creditors, have regard to directions given by resolution of the creditors or contributories at any general meeting, or by the committee of inspection; so however that directions given by the creditors or contributories at any general meeting shall, in case of conflict, override directions given by the committee of inspection.

      (2) The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors or contributories by resolution either at the meeting appointing the liquidator or otherwise, may direct, or whenever requested in writing to do so by one tenth in value of the creditors or contributories as the case may be.

      (3) The liquidator may apply to the court in the manner prescribed for directions in relation to any particular matter arising under the winding up.

      (4) Subject to the provisions of this Act , the liquidator shall use his own discretion in the management of the estate and its distribution among the creditors.

      (5) Any persons aggrieved by an act or decision of the liquidator may apply to the court for such order in the premises as it thinks just; and the court may confirm, reverse, or modify the act or decision.

Payments by liquidator into Companies Liquidation Account.

428.-(1) Every liquidator of a company being wound up by the court shall, in such manner and at such times as the Commission directs, pay moneys received by him into the public fund of the Federation kept by the Commission under and for the purposes of this Act and known as "the Companies liquidation Account", and the Accountant-General of the Federation shall furnish him with a certificate of receipt for the money so paid.

      Provided that, if the committee of inspection satisfies the Commission that for the purpose of carrying on the business of the company or of obtaining advances, or for any other reason, it is for the advantage of the creditors or contributories that the liquidator should have an account with any bank, the Commission shall, on the application of the committee of inspection, authorise the liquidator to make his payments into and out of such bank, in Nigeria as the committee may select, and thereupon those payments shall be made in the prescribed manner.

      (2) If the liquidator of a company being wound up as aforesaid, at any time retains for more than ten days an amount in excess of either 500 or, in any particular case, such other amount as the Commission may approve, and fails to satisfy the Commission as to the need for the retention beyond that time, the liquidator shall pay interest on the amount so retained in excess, at the rate of twenty per cent per annum, and shall be liable to -

      (a) disallowance of the whole or such part of his remuneration as the Commission thinks fit; and

      (b) removal from office,

and in addition, he shall be liable to pay any expenses occasioned by the retention.

      (3) A liquidator of a company which is being wound up by the court shall not pay any sums received by him as liquidator into his private banking account.

Audit, etc. of liquidator's account.

429.-(1) Every liquidator of a company being wound up by the court shall, at such times as may be prescribed but not less than twice in each year during his tenure of office, send to the Commission an account of his receipts and payments as liquidator.

      (2) The account shall be in duplicate in the prescribed form, and shall be verified by a statutory declaration in the prescribed form.

      (3) The Commission shall cause the account to be audited, and for the purpose of the audit the liquidator shall furnish the Commission with such vouchers and information as the Commission may require, and the Commission may at any time require the production of, and may inspect, any books or accounts kept by the liquidator.

      (4) When the account has been audited, one copy shall be filed and kept by the Commission, and the other copy shall be with the court and each shall be open to inspection by any creditor or other person interested, on payment of the prescribed fee.

      (5) The Commission shall cause the account when audited or a summary thereof to be printed, and shall send a printed copy of the account or summary by post to every creditor and contributory.

Books to be kept by liquidator.

430. Every liquidator of a company which is being wound up by the court shall, in the manner prescribed, keep proper books in which he shall cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed, and any creditor or contributory may subject to the control of the court, personally or by his agent inspect any such books.

Release of liquidator.

431.-(1) Where the liquidator of acompany being wound up by the court has realised all the property of the company, or so much of it as may, in his opinion, be realised without needlessly protracting the liquidation and has distributed a final dividend, if any, to the creditors, and adjusted the rights of the contributories among themselves, and made a final return, if any, to the contributories, or has resigned, or has been removed from his office, the Commission shall, on the application of the liquidator, cause a report on the accounts of the liquidator to be prepared.

      (2) The Commission shall consider the report referred to in subsection (1) of this section together with any objection that may be raised by any creditor, or contributory, or person interested against the release of the liquidator, and may grant or withhold the release as it deems fit subject nevertheless to an appeal to the court.

      (3) If the release of a liquidator is withheld, the court may, on the application of any creditor, or contributory, or person interested make such order as it thinks just, charging the liquidator with the consequences of any act or default which he may have done or made contrary to his duty.

      (4) An order of the Commission releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company, or otherwise in relation to his conduct as liquidator; but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

      (5) Where the liquidator has not previously resigned or been removed, his release shall operate as a removal of him from his office.

Control over liquidators.

432.-(1) The Commission shall take cognizance of the conduct of liquidators of companies which are being wound up by the court and if a liquidator does not faithfully perform his duties and duly observe all the requirement imposed on him by any enactment, or otherwise with respect to the performance of his duties, or if any complaint is made to the Commission by any creditor or contributory in regard thereto, the Commission shall inquire into the matter, and may take such action thereon as it thinks fit, including the direction of a local investigation of the books and vouchers of the liquidator.

      (2) The Commission may at any time require the liquidator of a company being wound up by the court to answer any inquiry in relation to any winding up in which he is engaged and if the Commission thinks fit, it may apply to the court to examine the liquidator or any other person on oath concerning the winding up.

Committee of inspection, special manager, etc.

Power to appoint committee of inspection after meeting of creditors and others.

433.-(1) Where a winding up order is made by the court, it shall be the business of the separate meetings of creditors and contributories summoned for the purpose of determining whether or not to apply to the court for an order appointing a liquidator in place of the official receiver, to determine whether or not application should be made to the court for the appointment of a committee of inspection to act with the liquidator, and who are to be members of the committee, if the appointment is made.

      (2) The court may make any appointment and order required to give effect to any determination under this section and if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matters aforesaid, the court shall decide the difference and make any order it thinks necessary.

Powers, etc. of committee of inspection.

434.-(1) A committee of inspection appointed under this Act shall consist of creditors and contributories of the company or persons holding general powers of attorney from creditors or contributories in such proportions as may be agreed on by the meetings of creditors and contributories or as, in case of difference, may be determined by the court.

      (2) A committee of inspection shall meet at the time or times appointed, so however that there shall be a meeting at least once in every month during its existence; but the liquidator or any member of the committee may convene a meeting as and when necessary.

      (3) A meeting of a committee of inspection shall be deemed convened if a majority of members are present; but at any such meeting the committee may act by a majority of the members present.

      (4) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.

      (5) If a member of the committee becomes bankrupt or compounds or arranges with his creditors or is absent from five consecutive meetings of the committee without leave of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant.

      (6) A member of the committee may be removed by an ordinary resolution at a meeting of creditors, if he represents creditors, or of contributories, if he represents contributories, of which seven days notice has been given, stating the object of the meeting.

      (7) On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, reappoint the same or appoint another creditor or contributory to fill the vacancy:

      Provided that if the liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for the vacancy to be filled he may apply to the court and the court may make an order that the vacancy shall not be filled, or shall not be filled except in such circumstances as may be specified in the order.

      (8) The continuing members of the committee, if not less than two, may act notwithstanding any vacancy in the committee.

Powers where no committee of inspection is appointed.

435. Where in the case of winding up there is no committee of inspection, the Commission may, on the application of the liquidator, if he thinks fit, do any act or thing or give any direction or permission which is by this Act authorised or required to be done or given by the committee.

continuation

1 Act changed to Decree By Companies And Allied Matters (Amendment) Decree No.32 1990 Commencement 10/10/90

Editor's note: The commencement date in section 696(2) Companies And Allied Matters (Amendment) Decree No.32 1990 is at variance with commencement date of the Decree itself viz: 10/10/90

2 Section358 (1) and (2) deleted By Companies And Allied Matters (Amendment) Decree No.32 1990 Commencement 10/10/90