Companies which
were originally registered under a particular type can change their status by
conversion and re-registration to another type of company, provided the laid
down procedures are followed and subject to certain restrictions. It is not all
types of conversion that are allowed by law as some are expressly prohibited
and some are more rigorous. Upon re-registration of a company, the Corporate Affairs
Commission will grant the new company a new Certificate of Incorporation showing
the new status, new name, and new ‘RC’ number of the company:
Types of Conversion and Re-Registration:
The commonest
types in Nigeria are:
a.
Re-registration of private as public (section 50 of CAMA);
b.
Re-registration of public as private (section 53 of CAMA);
c.
Re-registration of limited by shares as unlimited (section 51 of CAMA);
d.
Re-registration of unlimited as Private Company
Limited(section 52 of CAMA); and
e.
Re-registration of statutory corporation as a
company limited by shares.
We shall attempt
to briefly explain these.
a)
Re-registration
of a Private Company as a Public company (Ltd-Plc): Section 50 of CAMA provides that a
private limited company may be re-registered as a public limited company, subject
to the following conditions:
(a)
The company must pass a Special Resolution that it be so re-registered as a public company.
The special resolution must effect the necessary alterations in the Memorandum
and Articles of the Company (this relates to name, type, transfer of shares,
share capital, etc).
(b)
An application for –re-registration together with
the prescribed documents must be delivered to the Corporate Affairs Commission.
Please note that the special resolution must effect
the following alterations in the memorandum of the company to be re-registered.
i.
The name of the company (Ltd-Plc);
ii.
Increase in share capital if necessary;
iii.
The Memorandum of Association must now state that
the company is a public company.
On the other hands, in the Articles of Association,
the following alterations will need to be made:
(i)
Removal of restriction on transfer of shares;
(ii)
Provisions relating to appointment of directors and
secretaries should be modified to replace that of a public company.
Procedure for Re-registration
of a Private Company to a Public Company: (Special Resolution &
Application)
a)
Pass an ordinary resolution of the Board of
Directors proposing the conversion and re-registration from Ltd-Plc.
b)
The Board will authorize the company secretary to
issue Notice of General Meeting to pass Special Resolution.
c)
The Special Resolution of the general meeting
authorizing the registration and consequential alterations to memo and articles
will be passed.
d)
Application will be made to the Corporate Affairs Commission
for re-registration in prescribed form signed by at least one director and the
secretary. The following documents should be attached to the application:
(a)
A copy of the Special
Resolution of the general meeting;
(b)
Printed copy of the Memorandum and Articles as altered in pursuance of the resolution,
which reflects the provisions as required under CAMA for public company.
(c)
A copy of a Written
Statement Certified On Oath by the Directors and Secretary showing that the
paid up capital at the date of the
application is not less than 25% of the authorizes
share capital.
(d)
A copy of the company’s Balance sheet as at the date of the Resolution or the preceding 6
months, whichever is later.
(e)
A Statutory
Declaration by a director and the secretary to the effect that:- (i) the
special resolution has been passed; and (ii) the company’s assets are not less
than the aggregate of the paid up capital and un-distributable reserves.
(f)
A copy of any prospectus
or statements in lieu of prospectus delivered within the preceding 12
months to the SEC.
(g)
Availability Check and Reservation of Name Form from
the Corporate Affairs Commission.
(h)
Original Receipt evidencing payment of filling
fees.
(i)
Evidence of up-to-date filling of Annual Returns.
b)
Re-registration
of a Public company as Private: Section
53 of CAMA permits a public company to convert its status to that of a private
company on the following conditions:
a.
A Special Resolution
by the company to that effect;
b.
Application in the prescribed form to the Corporate
Affairs Commission;
c.
Alteration of Articles and Memorandum of
Association in line with that of a Private Company.
Procedural Steps
for Re-registration of a Public Company as Private & Documents to be
submitted to the Corporate Affairs Commission:
The procedural steps for Re-registration of a
Public Company as Private and documents to prepare and deliver to the Corporate
Affairs Commission for Conversion and Re-registration of a Public company as a
Private Company are as follows:
a.
Pass a Board Resolution proposing the conversion;
b.
Convene of General Meeting of the company by way of
notice of meeting issued by the company secretary;
c.
Pass a Special
Resolution at the general meeting authorizing the Re-registration and alter
the Memorandum and Articles to reflect those of a private company.
d.
Observed a 28
days waiting period for any application to cancel the Resolution at the
Federal High Court by holders of not less than 5% shares.
e.
If no application is made to cancel the
Re-registration within 15 days after the end of the 28 days allowed for making the
application to the court for cancellation of resolution for the Re-registration
of a Public Company as a Private Company, deliver to the Corporate Affairs Commission
the application for the Re-registration of a Public Company as a Private
Company in the prescribed form duly signed by a director and secretary
accompanied by the following:
(a)
A copy of the Resolution
authorizing the alteration of the Memorandum and Articles and the re-registration
of the company from public to private;
(b)
Printed copies of the Memorandum and Articles as altered by the Special Resolution.
(c)
Copy of the Availability Check and Reservation of
name (Form CAC 1) duly approved.
(d)
Evidence of up-to-date filling of Annual Returns.
(e)
Original Receipt of payment of prescribed fees.
If
an Application is made for the cancellation within 28 days and the court
cancels the resolution, then within 15 days of the court order, deliver to the
Corporate Affairs Commission:–
(a)
A printed copy of the Resolution and
(b)
A Certified True Copy of the court order.
If
an application is made for the cancellation within the 28 days, but is
withdrawn or the court rejects the application and confirms the resolution, then
deliver to the Corporate Affairs Commission, within 15 days of the court order
or any period directed by the court, the following documents:
(a)
A printed copy of the resolution
(b)
Certified True Copy of the court order
(c)
Application for re-registration
(d)
Availability Check and Reservation of Name for the
proposed re-registration name
(e)
Original receipts of payment of prescribed filling
fees; and,
(f)
Evidence of up-to-date filing of annual returns.
Please
note that by section 53(3) and (4) of
CAMA, the application for cancellation of the resolution to convert and
re-register Plc to Ltd must be made to the Federal High Court within 28days of
passing the resolution upon notification of the company and Corporate Affairs Commission,
by any of the following members of the company:
(a)
The holders of not less in the aggregate than 5% in
nominal value of the company’s issued share capital, or any class thereof; or
(b)
Not less than 5% of the company’s members.
However,
a member though qualified but who had earlier consented or voted in favour of
the resolution cannot turn around and present or participate in presenting an
application to cancel the resolution: section
53(3) of CAMA.
Finally, upon the Registrar being satisfied with
the processes, the Corporate Affairs Commission shall issue a new certificate
to the company, being a prima facie evidence of due compliance and the
company’s current status. Thereafter, the new company is required to comply
with post incorporation obligations.
c)
Prohibited
Re-registrations: Certain
re-registrations are not allowed by law and cannot be approved by the Corporate
Affairs Commission. They are:
(a)
Where a company attained its limited liability
status by re-registration from unlimited status, it cannot re-register back to
unlimited: Section 51(2) of CAMA. Thus,
conversion from Ultd – Ltd cannot go back to Ultd.
(b)
A Private Company (Ltd) previously re-registered as
Unlimited Company (Ultd) cannot re-register to another status (Plc, or Ltd) any
more: Section 51(3) of CAMA. Thus,
where a private company (Ltd) re-registers to Unlimited (Ultd), it cannot leave
the unlimited status and return to its previous limited status (ltd) or public
company (Plc) status. Also a Public Company (Plc) which re-registers to Ltd and
then to Ultd cannot re-register again and must remain with Ultd status.
(c)
An Unlimited Company (Ultd) cannot be registered as
a Public Company (Plc): Section 51(3) of
CAMA.
(d)
An Unlimited Company (Ultd) cannot be re-registered
as a Company Limited by Guarantee (Ltd/Gte): Section 52(2) of CAMA.
(e)
A company originally registered as Unlimited (Ultd)
and later re-registered to Limited status (ltd) cannot be re-registered back to
its original status as unlimited (Ultd): Section
52(2) of CAMA.
(f)
There is no direct conversion from Plc to Ultd.
Such a company must convert first to Ltd and then to Ultd, but cannot
reregister back to Plc.
© Onyekachi Duru Esq and www.legalemperors.com,
2016 (All Rights Reserved). Unauthorized use and/or duplication of this
material without express and written permission from this site’s author and/or
owner is strictly prohibited. Excepts and links may be used, provided that full
and clear credit is given to Onyekachi
Duru Esq and www.legalemperors.com with appropriate and specific directions to the
original content.