Section 26 CAMA 2020
Section 26 Companies and Allied Matters Act is about Company limited by guarantee. It is under Chapter 1 (Formation of Company) of PART B (INCORPORATION OF COMPANIES AND INCIDENTAL MATTERS) of the Act.
Company limited by guarantee
(1) Where a company is to be formed for the promotion of commerce, art, science, religion, sports, culture, education, research, charity or other similar objects, and the income and property of the company are to be applied solely towards the promotion of its objects and no portion thereof is to be paid or transferred directly or indirectly to the members of the company except as permitted by this Act, the company shall not be registered as a company limited by shares, but may be registered as a company limited by guarantee.
(2) Any provision in the memorandum or articles of association or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company or purporting to divide the company’s undertaking into shares or interest is void.
(3) A company limited by guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits for distribution to members.
(4) The memorandum of a company limited by guarantee shall not be registered without the authority of the Attorney-General of the Federation.
(5) The Attorney-General of the Federation shall, within 30 days, grant authority to the promoters of a company limited by guarantee where there are no objections to the memorandum or other cogent reason for not granting approval to register the company as one limited by guarantee.
(6) Where further information is required by the Attorney-General of the Federation from the promoters of a company limited by guarantee, the 30 days period shall be begin on receipt of all relevant information.
(7) Where all valid documents are furnished by the promoters of a company limited by guarantee and no decision has been made by the Attorney-General of the Federation within the 30 days period—
(a) the promoters shall—
(i) place an advertisement in three national daily newspapers, and
(ii) invite objections, if any, to the incorporation of the company ;
(b) an objection shall state the grounds on which it is made and shall be forwarded to the Commission within 28 days from the date of the last publications in the newspapers, where there is objection to the incorporation of the company;
(c) the Commission—
(i) shall consider the objection and may require the applicant to furnish further information or documentation, and
(ii) may uphold or reject the objection as it deems fit and inform the applicant accordingly.
(8) If the Commission is satisfied that the memorandum and articles of association have complied with the provisions of this section, it shall cause the application to be advertised, in the prescribed form, in three national daily newspapers.
(9) The advertisement referred to in subsection (8) shall invite objections, if any, to the incorporation of the company and the objection shall state the grounds on which it is made and shall be forwarded to the Commission within 28 days of the date of the last publications in the newspapers, and, if the objection is made, the Commission –
(a) shall consider it and may require the applicant to furnish further information or documentation ; and
(b) may uphold or reject the objection as it deems fit and inform the applicant accordingly.
(10) If—
(a) after the advertisement, no objection is received within the period specified in subsection (9) or, where any objection is received, the same is rejected, the Commission, having regard to all the circumstances, may assent to the application or withhold its assent ; and
(b) the Commission assents to the application, it shall register the company and issue a certificate of incorporation.
(11) If a company limited by guarantee carries on business for the purpose of distributing profits to its members, all officers and members who are cognisant of the fact that it is so carrying on business shall jointly and severally be liable for the payment and discharge of all the debts and liabilities of the company incurred in carrying on such business, and the company and every such officer and member shall be liable to penalty as prescribed by the Commission for every day during which it carries on such business.
(12) The total liability of a member of a company limited by guarantee to contribute to the assets of the company in the event of its being wound up shall not at any time be less than N100,000.
(13) Subject to compliance with subsection (11), the articles of association of a company limited by guarantee may provide that a member can retire or be removed from membership of the company by a special resolution duly filed with the Commission.
(14) If in breach of subsection (12), the total liability of the members of any company limited by guarantee is at any time less than N100,000, every director and member of the company who is cognisant of the breach is liable to a penalty as prescribed by the Commission for every day during which the default continues.
(15) Subject to section 117 (4) (d) of this Act, if upon the winding-up of a company limited by guarantee, there remains, after the discharge of all its debts and liabilities, any property of the company, the same shall not be distributed among the members but shall be transferred to some other company limited by guarantee having objects similar to the objects of the company or applied to some charitable object and such other company or association shall be determined by the members prior to dissolution of the company
