Section 395 CAMA 2020

Section 395 Companies and Allied Matters Act is about Companies qualifying as small: parent companies. It is under Chapter 14 (Financial statements, audit and accounting records) of the Act.

(1) A parent company qualifies as a small company in relation toa financial year only if the group headed by it qualifies as a small group.

(2) A group qualifies as small in relation to the parent company’s first financial year if the qualifying conditions are met in that year.

(3) A group qualifies as small in relation to a subsequent financial yearof the parent company if the qualifying conditions—

(a) are met in that year and the preceding financial year ;

(b) are met in that year and the group qualified as small in relation to the preceding financial year ; or

(4) The qualifying conditions are met by a group in a year in which itsatisfies the following requirements—

(a) it is a private company ;

(b) its turnover is not more than N120,000,000 or such amount as maybe fixed by the Commission from time to time ;

(c) its net assets value is not more than N60,000,000 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 government corporation or agency or its nominee ; and

(f ) in the case of a company having share capital, the directors between themselves hold at least 51% of its equity share capital.

(5) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 394 for each member of the group.

(6) The figures for each subsidiary undertaking are those included in its individual accounts for the relevant financial year, if—

(a) its financial year ends with that of the parent company, that financial year ;

(b) not, its financial year ending last before the end of the financial yearof the parent company ; and

(c) those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.