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WHEN CAN CAC REFUSE REGISTRATION OF A COMPANY - section 36 CAMA

  • Where the memorandum and article of association does not comply with the provisions of CAMA-S.36 CAMA
  • When the business the company wishes to carry on or the object for which it is formed or any of them is illegal.
  • Where the subscribers to the memorandum are incompetent or disqualified by virtue of SECTION 20 of Companies Allied Matters Act
  • Where there is noncompliance with the requirement of any other law as to registration and incorporation of a company or;
  • Where the proposed name of the company conflict with or is likely to conflict with an existing trademark or business name, including where the name is one of those prohibited under SECTION 30 of the Companies Allied Matters Act.

WHAT ARE THE MANDATORY CLAUSES IN A MEMO - SECTION 27(1) CAMA

  • Name of the company
  • Registered office address of the company. Not including Private mail bag or postal box address.
  • Business object of the company
  • The restriction on the powers of the company
  • Status of the company
  • Liability of the members of the company
  • Authorised Share capital

IMPORTANT THINGS TO NOTE IN REGULATION OF CORPORATE NAMES
Names of a company - S. 30(1) & (2)

  • The name of the company must end with the status of the company either in full or in abbreviation pursuant to section 29 CAMA.

  • Even though a company is entitled to have any name, some names are prohibited while some others are restricted.

  • The rules on corporate names are so strict that even if a name was inadvertently registered in contravention of CAMA, then by section 31(1) & (4) CAMA, the owner of the new contravening name would have the option of either voluntarily dropping the name, or would be forced to compulsorily change the name, either by the directive of CAC acting suo motu or upon a petition by the aggrieved original owner of the name.

  • It is important to note that a person cannot claim monopoly to a generic name. Thus, use of generic names should be avoided.

Prohibited names - s. 30(1) when Registering a Company in Nigeria

  • A name identical or resembling an existing name of a company as to be calculated to deceive. There is an exception here to the effect that such name can be used where the existing company is in liquidation or in the course of being dissolved and its consent to the use of that name has been obtained. See section 30(1)(a) CAMA; NIGER CHEMISTS LTD v NIGERIA CHEMISTS LTD (1961) ALL NLR 171; DAILY NEED PHARMACEUTICAL IND. V DAILY NEEDS INDUSTRIES LTD (1997) 3 NWLR (Pt. 491) 99

  • A name containing the words "chamber of commerce" unless it is a company limited by guarantee. See section 30(1)(b) CAMA; LAGOS CHAMBER OF COMMERCE v REGISTRAR OF COMPANIES (1952) 14 WACA 197

  • A name, which in the opinion of CAC, is capable of misleading as to the nature or extent of its activities or is undesirable, offensive or otherwise contrary to public policy. See section 30(1)(c) CAMA, Amasike v Registrar-General CAC

  • A name which, in the opinion of CAC, would violate any existing trade mark or business name registered in Nigeria, unless the consent of the owner is obtained. See section 30(1)(d)CAMA. It must be noted that even if the trademark or business name is registered, remedy can be sought from the Court through the common law action PASSING-OFF.

The foregoing rules do not apply only to already registered and existing names. They also apply to names which have been reserved under section 32 CAMA, for the period for which they were reserved. See section 32(1) & (2) CAMA

With respect to the registration of business names, the principles are basically the same and they are provided for under section 579(2) CAMA

Under section 31(1) & (4) CAMA, CAC can compel any company using a prohibited name to change its name. Note that under section 31(1), the time limit within which CAC can compel a company to change its name is 6 months from the date the offending name was registered and the company shall change it within 6 weeks from the date the direction is given. After the 6 months period, the only remedy is through a common law action under the economic tort of Passing-Off.

In furtherance of sections 31(1) & (4), there are new grounds upon which CAC can cancel the registration of an approved name.

They are provided in Regulation 10 of the Companies Regulations 2012 as follows:

  • The CAC can cancel an approved name where the CAC has reasonable grounds to believe that the name; whether for a company, business name, or incorporated trustee, was obtained by fraud. Reg. 10(1)

  • The CAC can cancel an approved name when it inadvertently or erroneously approved the name. Reg. 10(2)

Restricted names - s. 30(2) when Registering a Company in Nigeria

Under CAMA, restricted names can be used with the consent of the CAC but in practice, the consent of the relevant authority must also be obtained before CAC can grant consent. That is, although CAMA provides that the consent of CAC is what is required, in practice, CAC usually requires evidence of the consent of the appropriate authority or person. For instance, if I want to register “Nsukka Global Ltd”; before CAC would grant consent, I must first show evidence of consent to use the name Nsukka from Nsukka Local Government in Enugu State by producing a Letter of Authority.

The restricted names are:

  • Names that contain the words Federal, National, Regional, State, Government or words that suggest that it enjoys patronage from the federal or state government or any ministry or department of government. See section 30(2)(a) CAMA

  • Names that contain the word ‘municipal’ or ‘chartered’ or in the opinion of CAC suggests or is calculated to suggest that it enjoys connection with any municipality or local authority. See section 30(2)(b) CAMA

  • Names that contain the word ‘cooperative’ or ‘building society’. See section 30(2)(c) CAMA

  • Names that contain the word “group” or “holding”. See section 30(2)(d) CAMA
    Note that a name may be reserved for a period of 60 days pending incorporation upon a written application to the commission and payment of prescribed fees – see section 32(1) and (2) CAMA.

  • Registered address: the registered office address must be expressed to be situated in Nigeria to comply with the Nigerian status of the company despite the name.