- December 7, 2020
- Posted by: PIONEERLAWHUB
- Categories: BLOG, UPDATES
CAMA 2020 IN REVIEW
Today we are reviewing company limited by guarantee otherwise known as “ltd/Gte”
Why forming this type of company?
The grounds for forming a ltd/Gte are found under S.26 of CAMA viz:
“Promotion of commerce, art, science, religion, sports, culture, education, research, charity, or other similar objects…”
The income and property must be applied solely for the promotion of the company’s object
No share capital and also no sharing of the profit to members. Any provision in the memo that permits profit sharing is void (2) & (3)
Consent of Attorney General of the Federation (AGF) is required prior to registration. See sub section 4
the procedures for obtaining AGF’s consent as well as options available to the promoters in case of undue delay by the AFG in granting consent, are spelt out under sub sections 5 to 10. This to me is a welcome innovation
Penalty against members for act done in contravention of (1) & (2) are stated under subsections 11 and 12 and 14
By subsection (13), SPECIAL RESOLUTION is required to retire or remove a member of a company ltd/Gte
Memorandum of every company ltd/Gte must have a SPECIAL CLAUSE. The replica of which is found under section 26 (15) of the Act.
Total liability of a member in case of winding up is now N100,000 minimum. The old Act benchmarked it at N10,000
Note finally that the memorandum of association of a company limited by guarantee must contain the actual “statement of guarantee” as contained in S.38
Are there preferences or benefits that company limited by guarantee has over Incorporated Trustees? Please drop your comments
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