According to the defining law in Nigeria, a company can be founded by one, two, or more people. It can also be described as a body formed and incorporated as a legal entity apart from the individual partners that make up the firm. A group of people can organize a legal organization called a corporation to conduct and manage a commercial or industrial venture. Similarly, a company that has been created and registered under this Act (CAMA), or one that was already in existence when this Act took effect in Nigeria is referred to as a “Company” or an “existing company”.
It is important to keep in mind that the people participating in the management of an incorporated legal entity which are the members are also referred to as the organizational structure, since they aid the company in achieving its objectives and goals.
Thus, Meetings are held to establish strategic plans that will help the organization accomplish its goals and to keep the members of the company informed about the firm’s activities. In other words, meetings continue to be a means of aiding a business’s decision-making process. The Companies and Allied Matters Act 2020 has codified meetings that are to be held by Companies registered under the Act. There are 3 types of meetings;
The primary goal of this article is to highlight the number of meetings that a company must hold in order to comply with the law.
Generally, meetings are called to debate and deliberate on issues impacting the company’s members and management. The gathering of the company’s members is also known as the General Meeting.
Categories of General Meetings
According to the Companies and Allied Matters Act, 2020 (CAMA), the types of general meetings that can be convened are:
Within six months after their establishment, Public Limited Companies are solely mandated by law to hold this meeting[1]. The meeting’s objective is to evaluate and debate issues raised by the firm’s statutory report as well as any problems related to the organization of the company and the start of operations[2]. The directors are mandated to at least 21 days before the statutory meeting, forward the statutory report to every member of the company, the Statutory Report must be duly certified by not less than two directors and also deliver a copy to the Corporate Affairs Commission for registration. The statutory report contains the following information:
Failure to hold Statutory Meeting or deliver Statutory Report would result in the company and any officer in default being guilty of an offence and liable to a fine as may be fixed by CAC.[3] It is pertinent to note that this meeting must be held compulsorily in Nigeria.
A company should hold its first Annual General Meeting within 18 months of incorporation[4]. Subsequently, the AGM should be held within a space of 15 months after each AGM, this is done just once a year. Apart from the first AGM the Corporate Affairs Commission can extend the time of holding any AGM by not more than 3 months[5]. The ordinary businesses conducted at annual general meetings are;
While the special businesses conducted are any other business not listed as an ordinary business, an example is Increase and Reduction in Share Capital. It must also be held in Nigeria.
This meeting is the General Meeting held at any time to transact businesses that cannot conveniently wait for the next AGM, it can hold at any time and need not be held in Nigeria[6]. They can be organized by the board of directors or any member or members of the company holding not less than one-tenth of the company’s paid-up capital or voting rights.
Businesses transacted at Extraordinary meetings shall be deemed to be ‘SPECIAL BUSINESS’[7].
There are nonetheless gatherings that are not for the Company’s General Members. These meetings are;
Other provisions that are Noteworthy from the Companies and Allied Matters Act.
For any meeting to be valid, adequate notice must be given to persons who are entitled to attend the meeting, no business may be transacted at any general meeting unless notice of it has been duly given[9].
The place, date and time of the meeting, the type of meeting, Agenda of the meeting, for example, if it is for Annual General Meeting or for Special Business[10].
Every Member, Legal representative, Receiver or Trustee in bankruptcy of a member, every director of the company, every auditor of the company[11] etc.
The notice required for all types of general meetings shall be 21 days from the date on which the notice was sent out. However, a shorter notice may be agreed upon by all the members entitled to attend and vote at the annual general meeting[12]. Note the exception is that every public Company shall at least 21 days before any General meeting advertise a notice of such meeting in at least two daily newspapers[13].
This means the total number of members that can validly hold a meeting of the company. For the purpose of determining a quorum, all members of the company or their proxies shall be counted. Quorum is determined as follows; unless otherwise provided in the articles; the quorum of a meeting shall be 1/3 (one-third) of the total number of members of the company or 25 members present in person or proxy. Where the number is not a multiple of 3, then the number nearest to 1/3. Where the number of members is 6 or less, the quorum shall be 2 members[14].
Every company (except for companies with one shareholder) shall keep of all proceedings of general meetings, board meetings and meetings of its managers, where there is a default, the company and every officer in default shall be guilty of an offence and liable to a fine as may be determined by CAC[15], The minutes must be duly signed by the chairman. The minute book shall be kept at the registered address of the company and shall be open to the members for inspection without charge[16].
CONCLUSION
Meetings play a crucial role in the sustainability of any corporate entity, whether big or small. The idea behind meetings is to ensure that Company’s activities are accountable and in compliance with regulatory compliance requirements. Thus, it is necessary that Companies comply with the provisions of the Law on matters of meetings, inclusive of its conduct and the decisions made therein.
SNIPPET
Failure to hold Statutory Meeting or deliver Statutory Report would render the company, and any officer in default, guilty of an offence and liable to a fine as may be fixed by the CAC.[17] It is pertinent to note that this meeting must be held compulsorily in Nigeria.
Key terms: Meetings, Statutory Meetings, Corporate Affairs Commission
AUTHOR
Mr Oyetola Muyiwa Atoyebi, SAN is the Managing Partner of O. M. Atoyebi, S.A.N & Partners (OMAPLEX Law Firm).
Mr. Atoyebi has expertise in and vast knowledge of Corporate Practice and this has seen him advise and represent his vast clientele in a myriad of high-level transactions. He holds the honour of being the youngest lawyer in Nigeria’s history to be conferred with the rank of Senior Advocate of Nigeria.
CONTRIBUTOR: Tobenna Mogbo
Tobenna is a member of the Dispute Resolution Team at OMAPLEX Law Firm. He also holds commendable legal expertise in Corporate Law Practice
[1] Section 235 CAMA
[2] Section 238(8) of CAMA
[3] Section 236 and 408
