Nigerian Bar Final (Bar Part II) Corporate Law Practice (Nigeria)

Which of the following business structures in Nigeria provides the benefit of limited liability to its owners while having the least stringent statutory disclosure requirements?

• APrivate Limited Company (LTD)
• BPublic Limited Company (PLC)
• CBusiness Name (Sole Proprietorship)
• DGeneral Partnership

Under Section 18(2) of the Companies and Allied Matters Act (CAMA) 2020, what is the minimum number of persons required to form a private company in Nigeria?

• AOne person
• BTwo persons
• CSeven persons
• DFive persons

What is the minimum issued share capital for a private company limited by shares under Section 27(2)(a) of CAMA 2020?

• A₦100,000
• B₦10,000
• C₦500,000
• D₦1,000,000

Under Section 27(2)(b) of CAMA 2020, what is the minimum issued share capital required for a public company limited by shares?

• A₦2,000,000
• B₦500,000
• C₦10,000,000
• D₦1,000,000

Under Section 394 of CAMA 2020, which of the following criteria must a private company satisfy to qualify as a small company?

• AIts turnover is not more than ₦120 million and its net assets are not more than ₦60 milli…
• BIts turnover is not more than ₦10 million and its net assets are not more than ₦5 million
• CIts turnover is not more than ₦500 million and its net assets are not more than ₦250 mill…
• DIts turnover is not more than ₦50 million and its net assets are not more than ₦25 million

What is the legal status and enforceability of a pre-incorporation contract under Section 96 of CAMA 2020?

• AIt is not binding on the company until the company ratifies it after incorporation
• BIt is automatically binding on the company from the moment of incorporation
• CIt is void ab initio and cannot be ratified under any circumstances
• DIt is only binding on the third party but cannot bind the promoters personally

According to Section 31(2) of CAMA 2020, for how long is a name reserved by the Corporate Affairs Commission (CAC) valid?

• A60 days
• B30 days
• C90 days
• D14 days

When registering an association as an Incorporated Trustees under Part F of CAMA 2020, what publication requirement must be met?

• APublication in two national daily newspapers inviting objections within 28 days
• BPublication in the Federal Gazette within 14 days
• CPublication in one local newspaper and one international journal within 30 days
• DNo publication is required for incorporated trustees under the new Act

Under the provisions of CAMA 2020, which of the following is a characteristic of a Limited Liability Partnership (LLP)?

• AIt is a body corporate with a legal personality separate from its partners
• BIt does not have perpetual succession and dissolves upon a partner's death
• CAll partners are jointly and severally liable for the company's general torts
• DIt is registered under Part E of the Act along with Business Names

What is the statutory composition of partners required to register a Limited Partnership (LP) under Part D of CAMA 2020?

• AAt least one general partner (with unlimited liability) and one limited partner (with lim…
• BAt least two general partners and no limited partners
• CAt least two limited partners, with all general partners being corporate bodies
• DAt least seven partners, all having equal and limited liability

Which authority must grant consent or authority before a Company Limited by Guarantee (LTD/GTE) can be registered under Section 26 of CAMA 2020?

• AThe Attorney-General of the Federation
• BThe President of the Federal Republic of Nigeria
• CThe Governor of the Central Bank of Nigeria
• DThe Securities and Exchange Commission

Under Section 22(1) of CAMA 2020, who is eligible to sign the Statement of Compliance required for company incorporation?

• AThe applicant (or their agent) or a legal practitioner
• BA legal practitioner of at least 10 years call only
• CA chartered accountant or chartered secretary only
• DThe Registrar-General of the Corporate Affairs Commission

What is the primary document that defines a company's charter and constitution, containing its name, registered office, objects, and share capital under CAMA 2020?

• AMemorandum of Association
• BArticles of Association
• CPartnership Deed
• DCertificate of Incorporation

Under Section 36 of CAMA 2020, what is the legal effect of a Certificate of Incorporation issued by the CAC?

• AIt is conclusive evidence that all the requirements of the Act in respect of registration…
• BIt guarantees that the company is solvent and safe to transact with
• CIt exempts the company from paying corporate income taxes for the first three years
• DIt permits the company to engage in any legal or illegal business in Nigeria

Under Section 22(2) of CAMA 2020, how must a private company limited by shares restrict the transfer of its shares?

• ABy its Articles of Association
• BBy a separate Board of Directors resolution filed with the CAC
• CBy publishing a restriction notice in a national newspaper
• DBy a verbal agreement made during the first board meeting

Which of the following describes the legal relationship and duties of a promoter to the company they are incorporating under CAMA 2020?

• AThey stand in a fiduciary relationship and must observe utmost good faith and disclose an…
• BThey are a legal agent of the company before it is formed
• CThey are an employee of the company entitled to a statutory monthly salary
• DThey have no legal relationship, duties, or liabilities to the company

Under the common law rule in Kelner v. Baxter, why was a company unable to ratify a contract entered into by a promoter prior to its incorporation?

• AA principal must be in existence at the time the agent enters into the contract
• BThe contract lacked valuable consideration under contract law
• CThe promoter did not have a valid license from the government
• DPre-incorporation contracts are deemed illegal under common law

Which of the following scenarios represents a recognized statutory or common law instance of 'lifting the veil' of incorporation?

• AWhen the corporate form is used to commit fraud, evade tax, or bypass statutory obligatio…
• BWhen a private company decides to change its name to reflect new ownership
• CWhen a company holds an Extraordinary General Meeting to remove a director
• DWhen the company's shares are transferred from a local shareholder to a foreign investor

In a Company Limited by Guarantee (LTD/GTE) under CAMA 2020, what is the extent of a member's financial liability?

• AThe amount they undertook to contribute to the assets of the company in the event of it b…
• BThe nominal value of the shares they have purchased in the company
• CThey have unlimited personal liability for all corporate debts
• DThey have no financial liability whatsoever under any circumstances

Under Section 55 of CAMA 2020, how can an incorporated private company limited by shares re-register as a public company?

• ABy passing a special resolution, amending its Memorandum and Articles, and applying to th…
• BBy passing an ordinary resolution and notifying the SEC within 7 days
• CThrough automatic conversion once its shareholder count exceeds 50 members
• DBy applying for a judicial order from the Federal High Court

Under Section 271 of CAMA 2020, what is the minimum number of directors required for a public company?

• ATwo directors
• BOne director
• CThree directors
• DFive directors

Which of the following companies is exempt from the statutory obligation to appoint a Company Secretary under Section 330 of CAMA 2020?

• AA small company
• BA public company
• CA company limited by guarantee
• DA foreign-owned public company

What is the primary statutory duty of directors under Section 305 of CAMA 2020?

• ATo act in good faith in the best interests of the company as a whole
• BTo act primarily in the interest of the majority shareholders who appointed them
• CTo guarantee a dividend payment to shareholders in every financial year
• DTo follow the instructions of the Corporate Affairs Commission on commercial matters

Under the provisions of CAMA 2020, how are the first directors of a company appointed?

• ABy the subscribers to the Memorandum of Association
• BBy the Registrar-General of the CAC
• CBy a majority vote of the general public
• DBy the company secretary in the statutory report

Which of the following conditions disqualifies an individual from being appointed as a director under Section 283 of CAMA 2020?

• ABeing an undischarged bankrupt or convicted of a felony involving fraud
• BBeing under 30 years of age
• CFailing to hold a minimum of 10% of the company's shares
• DBeing a non-Nigerian citizen

Under Section 278 of CAMA 2020, what is the age disclosure rule for a director of a public company who is 70 years or older?

• AThey must disclose their age to the members at the general meeting where they are propose…
• BThey are disqualified and cannot be appointed under any circumstances
• CThey must obtain a special waiver from the Federal High Court
• DThey can only be appointed as a shadow director without voting rights

Under Section 288 of CAMA 2020, how can a company remove a director before the expiration of their term of office?

• ABy passing an ordinary resolution at a general meeting after giving special notice of 28…
• BBy a unanimous vote of the Board of Directors at a board meeting
• CBy passing a special resolution with 21 days notice
• DBy a unilateral directive issued by the Managing Director

How is a 'shadow director' defined under Section 270 of CAMA 2020?

• AA person on whose instructions the directors of the company are accustomed to act
• BA director who has resigned but continues to attend board meetings as an observer
• CA director appointed by the court to represent minority shareholders
• DAn alternate director who only votes when the principal director is absent

Under Section 275 of CAMA 2020, what is the minimum number of independent directors required for a public company?

• AAt least three independent directors
• BAt least one independent director
• CAt least five independent directors
• DPublic companies are not required to have independent directors

In a public company, what procedure must the board follow under Section 333 of CAMA 2020 to remove the Company Secretary?

• AGive them a notice stating the grounds and an opportunity to make representations to the…
• BObtain prior approval of the shareholders in a general meeting
• CApply to the Federal High Court for a removal order
• DFile a removal notice with the CAC before notifying the secretary

Under Section 332 of CAMA 2020, which of the following qualifications is required for an individual to be appointed as the Company Secretary of a public company?

• AA member of ICSAN, a legal practitioner, or a chartered accountant
• BA university degree in business administration or management
• CA minimum of 5 years experience as a director of a private company
• DA security clearance from the Corporate Affairs Commission

Under Section 421 of CAMA 2020, a company must file its annual returns with the Corporate Affairs Commission (CAC) within how many days of its AGM?

• A42 days
• B14 days
• C30 days
• D90 days

Which of the following companies is exempt from the statutory requirement to appoint an auditor under Section 402 of CAMA 2020?

• AA small company that has not carried on business as an insurance or banking company
• BA public company with annual profits below ₦5 million
• CA government-owned public corporation
• DA local company with foreign shareholders

Under Section 404 of CAMA 2020, what is the statutory composition of the Audit Committee in a public company?

• AFive members comprising three representatives of shareholders and two non-executive direc…
• BThree executive directors only
• CSix members divided equally between directors and external auditors
• DTen members appointed directly by the Securities and Exchange Commission

What is the core legal principle established in the landmark case of Foss v. Harbottle regarding corporate litigation?

• AThe company is the proper plaintiff for wrongs done to the company, and the majority rules
• BIndividual shareholders can always sue in their own name for any wrong done to the company
• CDirectors are personally liable to individual shareholders for bad business decisions
• DThe Corporate Affairs Commission must approve all lawsuits filed by companies

Under Section 343 of CAMA 2020, what is the purpose of a derivative action brought by a shareholder?

• ATo enforce a right belonging to the company when the directors refuse to sue
• BTo recover personal compensation for a loss in their share value
• CTo force the company to pay a higher dividend to the shareholders
• DTo petition for the winding up of the company on insolvency grounds

Under Section 346 of CAMA 2020, a member can petition the Court on the ground that the affairs of the company are being conducted in what manner?

• AIn a manner oppressive or unfairly prejudicial to one or more of the members
• BIn a manner that fails to maximize market share in the industry
• CIn a manner that results in low annual profits or dividends
• DIn a manner that deviates from the corporate practices of foreign competitors

Under Section 318 of CAMA 2020, what must be recorded in the register of directors' shareholdings?

• AThe number and description of shares held by each director, their spouse, or children
• BThe exact salaries and allowances paid to each director
• CThe bank account details and balances of the directors
• DThe names of all corporate clients introduced by each director

Under Section 307 of CAMA 2020, what is a director who has an interest in a contract with the company required to do?

• ADeclare the nature of their interest at a meeting of the directors
• BResign immediately from their position on the board
• CObtain the written permission of the Corporate Affairs Commission
• DPublish details of the interest in a national daily newspaper

Under the provisions of CAMA 2020, who is responsible for determining the remuneration of directors?

• AThe company in a general meeting
• BThe Board of Directors themselves
• CThe Managing Director at their sole discretion
• DThe Corporate Affairs Commission

Which type of company is statutory required to hold a Statutory Meeting within six months of its incorporation under Section 235 of CAMA 2020?

• AA public company
• BA private company
• CAn incorporated trustees association
• DA limited liability partnership

Except for the very first Annual General Meeting, what is the maximum statutory interval permitted between subsequent AGMs under Section 237 of CAMA 2020?

• A15 months
• B12 months
• C18 months
• D6 months

Under Section 237(1) of CAMA 2020, which of the following companies is exempt from the obligation to hold an Annual General Meeting?

• AA small company or a single-shareholder company
• BA public company with less than 100 members
• CA company limited by guarantee
• DA foreign-owned joint venture company

Under Section 239 of CAMA 2020, directors must proceed to convene an Extraordinary General Meeting (EGM) upon the requisition of members holding not less than what fraction of the company's paid-up capital?

• AOne-tenth (10%)
• BOne-half (50%)
• CThree-fourths (75%)
• DOne-third (33.3%)

What is the standard notice period required for calling a general meeting of a company under Section 241 of CAMA 2020?

• A21 days
• B14 days
• C30 days
• D7 days

Under Section 241(2) of CAMA 2020, a general meeting may be called on shorter notice than 21 days if it is agreed by which proportion of members?

• AAll members entitled to attend and vote (for AGM) or members holding 95% of shares (for E…
• BA simple majority of the board of directors
• CMembers holding at least 51% of the company's voting shares
• DApproval of the Registrar-General of the Corporate Affairs Commission

Under Section 243 of CAMA 2020, who is entitled to receive notice of a general meeting of a company?

• AEvery member, director, secretary, and auditor of the company
• BOnly shareholders holding at least 10% of the voting shares
• COnly the directors and the company secretary
• DThe company's commercial banker and main trade suppliers

Under Section 256(2) of CAMA 2020, what is the default quorum for a general meeting of a company with more than six members, unless the articles provide otherwise?

• AOne-third of the total number of members, or 25 members, whichever is less, present in pe…
• BTwo members, regardless of the company's total membership
• CFive members present in person only
• DA simple majority of all the registered members