1. RE-REGISTRATION OF A PRIVATE COMPANY (LTD) TO A PUBLIC COMPANY (PLC)-S. 50 of CAMA
The main reason for doing so is usually to raise or increase the share capital of a private company.
THE PROCEDURE:-
1. Pass Board Resolution to convert the company to a PLC.
2. Board instructs secretary to issue notice of EGM
3. Pass a Special Resolution at General meeting approving it,
4. make consequential alterations in the Memorandum and Articles of Association.
5. Stamp the altered Memorandum and Articles of Association
6. Write an application to the CAC to effect the conversion accompanied with the following documents: (NB-FORM CAC 2.7)-S.50(3)
a) FORM CAC 1A
b) Special Resolution of the company and the Board Resolution approving the conversion
c) Printed copy of the Stamped altered Memorandum and Articles of Association
d) Written Statement on oath by a Director and Secretary that the paid up capital of the company is not less than 25 % of its authorized capital
e) Statutory declaration by the Directors and the Secretary that
• the special Resolution was duly passed
• The company’s assets are not less than the aggregate of unpaid capital and undistributable reserves.
f) A copy of the company’s balance sheet as at date of resolution or preceding 6 months
g) Where company is to be quoted at NSE, a copy of the prospectus or a statement in lieu of prospectus registered with SEC within the preceding 12 months.
h) The original Certificate of Incorporation for cancellation
i) Original receipt of filing fees
j) The receipt of filling Annual returns
7. If CAC is satisfied,A new Certificate of Incorporation indicating that it is a Plc is issued-S.50(4)
EFFECT- new certificate is a prima facie evidence of compliance-s.50(6)
CONSEQUENTIAL ALTERATIONS TO THE MEMORANDUM OF ASSOCIATION
a.Alteration of name clause to end with PLC
b. Alteration of authorised share capital clause to meet legal minimum for PLC
c. Alteration of type clause to show that it is a public company
CONSEQUENTIAL ALTERATIONS TO THE ARTICLES OF ASSOCIATION
a. the name must be changed to PLC
b. Removal of the restriction on the transfer of its shares
c. Amendment of the qualification of Directors and appointment of those above 70 years old
d. Amendment of the qualification of the company Secretary
e. Written Resolutions not to be allowed
RE-REGISTRATION OF A PUBLIC COMPANY (PLC) TO A PRIVATE COMPANY (LTD)-S. 53 of CAMA; form CAC 2.7
THE PROCEDURE: S.53 CAMA
1. Pass a Board Resolution
2. Board instructs secretary to issue notice of EGM
3. Pass a special Resolution at general meeting to approve it (3/4 of members present and voting)
4. Make consequential alterations to the Memorandum and Articles of Association to reflect that of a private company such as:
i. Restricting the transfer of its shares
ii. No qualification for secretaries, etc
5. Stamp the altered Memorandum and Articles of Association
Cancellation or Confirmation
1. Apply to the Federal High Court to confirm/ cancel the re-registration.
2. A period OF 28 DAYS is allowed for dissenting members to apply to Court to cancel it.
Confirmation
• If the re-registration/conversion is confirmed, write an application to the CAC to effect it WITHIN 15 DAYS OF THE ORDER (after the 28 days waiting period)confirming it with the following documents attached:
➢ Form CAC 1A
➢ Application to CAC in prescribed form
➢ Special and Board Resolution of the Company approving the conversion
➢ Stamped copies of the altered Memorandum and Articles of Association
➢ The Order of the Court approving it
➢ The original Certificate of Incorporation for cancellation
➢ Original receipt of filing fees
➢ Evidence of updated annual returns
• A new Certificate of Incorporation is issued
Cancellation
• Application for cancellation is made by: - S. 53 (3)(4)
➢ holders of at least 5 % of the issued share capital of the company; OR
➢ not less than 5% members (excluding those who voted for/consented to the re-registration.)
• If the re-registration is cancelled by the Court, then the following must be filed to CAC within 15 days of court order:
o Notification of the cancellation Order
o The Special Resolution passed
o CTC of Court Order refusing the conversion
RE-REGISTRATION OF PRIVATE COMPANY LIMITED BY SHARES AS UNLIMITED COMPANY (LTD – ULTD) - S. 51 CAMA
THE PROCEDURE
1. Board Resolution proposing the conversion.
2. Subscription of the prescribed Form of Assent to the re-registration by all the members or on their behalf.
3. Statutory Declaration by all the Directors of the company that the persons who or on whose behalf, the form of assent is subscribed constitute the whole membership of the company and that all persons who subscribed on behalf of a member did so with the member’s authority.
4. Pass a Special Resolution altering the memo & Articles of the current status of the company
5. Stamp the altered memo and articles
6. Apply to the CAC in the prescribed form signed by the Director/the Secretary setting out the alterations in the memo
Documents to submit to CAC
a.FORM CAC 1A-Availability and reservation of new name duly approved.
b.Application in prescribed form (FORM CAC 2.7) setting out the alterations signed by a director & secretary or two known Directors.
c.A prescribed form of Assent of members in support of the re-registration
d.A statutory declaration made by the Directors of the Company.
e.Stamped memo & articles as altered.
f.Receipt of filing fees.
g.Evidence of filing Annual Returns up to date.
RE-REGISTRATION OF UNLIMITED COMPANY AS PRIVATE COMPANY LIMITED BY SHARES (ULTD – LTD) - S. 52 CAMA
The members are still liable on previous obligations of the company-S. 52(9) CAMA
The Procedure
1.Board meeting and Resolution to propose the conversion and re-registration.
2.General meeting passes a Special Resolution to convert and re-registration as LTD.
3.The Special Resolution shall state the proposed authorized share capital and the consequential alterations in the memo & Articles.
4.Application in the prescribed form 2.7 signed by a Director and Secretary or two known Directors.
Documents – same as in ltd - ultd
NB:A copy of the Resolution and other documents must be filed, the CAC within 15 days of passing the Resolution.
RE-REGISTRATION OF STATUTORY CORPORATION AS COMPANY LIMITED BY SHARES
A statutory corporation could be privatized and either unbundled into small companies or re-registered as public Limited by share:
Essential Features of the conversion.
1.The company would cease to be statutory corporation and be formally registered with CAC.
2.The company would have memo & articles which becomes its source governance rather than the enabling laws which set up the corp.
3.The company ceases to enjoy status of statutory corporation being entitled to a pre-action Notice.
The Procedure
a.Bureau of Public Enterprises (BPE) obtains a government white paper to commercialize and privatize the enterprise and arrange its sale.
b.BPE takes steps to incorporate the new company as a public limited liability company with CAC. Submit all approved documents.
c.BPE hands over the new company to its core investors.
PROHIBITED RE-REGISTRATIONS/ CONVERSIONS
1. A previously ULTD now re-registered as LTD is prohibited from converting back to ULTD. S. 51(2)
• ULTD " LTD *|ULTD
2. previously LTD now reregistered as UNLTD cannot reregister with another status i.e. change to PLC, LTD, etc. S. 51(3); s.50(7)
• LTD " ULTD *|PLC or LTD
3. previously ULTD now reregistered as LTD cannot be re-registered as PLC or LTD/GTE– s.52(2)
• ULTD " LTD *|PLC or LTD/GTE
4. previously ULTD now re-registered as PLC cannot change to ULTD – s.51(3)
• ULTD " PLC *|ULTD
NOTE-There is no provision for direct conversion from PLC – UTLD. Such company must first convert to LTD and then to ULTD but cannot re-register back to PLC.
Note: IT IS ONLY A PUBLIC COMPANY CONVERTING TO A PRIVATE COMPANY OR VIS VERSA THAT CAN RE-REGISTER WITHOUT ANY RESTRICTION.
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