ICSAN Professional Corporate Law (Nigeria)

Under Section 27(2) of the Companies and Allied Matters Act (CAMA) 2020, what is the minimum issued share capital for a private company incorporated in Nigeria?

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

Under Section 27(2) of CAMA 2020, what is the minimum issued share capital required for a public company (Plc) in Nigeria?

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

Which of the following describes a key reform introduced by Section 18(2) of CAMA 2020 regarding company membership in Nigeria?

• AAll companies, public or private, can now be formed by a single person.
• BA private company can now be formed and run by a single member.
• CA minimum of five members is now required to form any company.
• DForeign individuals can no longer form companies as single members.

Under CAMA 2020, what is the maximum number of members a private company is permitted to have, excluding employees and former employees?

• A20 members
• B50 members
• C100 members
• DThere is no limit

A company limited by guarantee (Ltd/Gte) in Nigeria cannot be incorporated without the consent of which regulatory authority?

• AThe Securities and Exchange Commission (SEC)
• BThe Corporate Affairs Commission (CAC)
• CThe Attorney-General of the Federation
• DThe Federal Inland Revenue Service (FIRS)

Under Section 85 of CAMA 2020, which of the following best describes the legal nature of a promoter's relationship with the company they are forming?

• AA promoter is an agent of the company before it is registered.
• BA promoter stands in a fiduciary relationship to the company.
• CA promoter is a trustee of the company's future property.
• DA promoter has no legal or equitable duties to the company until incorporation.

What is the statutory position under Section 96 of CAMA 2020 regarding the ratification of pre-incorporation contracts in Nigeria?

• APre-incorporation contracts are automatically binding on the company upon registration.
• BA company may ratify a pre-incorporation contract after incorporation, and it will be bou…
• CPre-incorporation contracts can never be ratified and must be entered into afresh.
• DOnly the promoters, and never the company, remain personally liable after ratification.

Under CAMA 2020, what is the default legal status of a company's Articles of Association?

• AThey are a private contract between the directors and the company secretary.
• BThey form a statutory covenant binding the company, its members, and officers.
• CThey are mere guidelines that can be disregarded by a majority vote of directors.
• DThey only bind the members in relation to third-party commercial transactions.

Which type of company under CAMA 2020 does not restrict the personal liability of its members for the debts of the company?

• APrivate company limited by shares
• BPublic company limited by guarantee
• CUnlimited company
• DSmall private company

Under Section 868 of CAMA 2020, which of the following is a key criterion for a private company to qualify as a 'small company'?

• AIts turnover must not exceed ₦120 million, and its net asset value must not exceed ₦60 mi…
• BIts turnover must not exceed ₦10 million, and its net asset value must not exceed ₦5 mill…
• CIt must have a minimum of 50 shareholders and operate in multiple states.
• DIt must be a public company with government ownership.

What is the statutory fee framework for the registration of a new company at the CAC under CAMA 2020?

• AFees are calculated as a flat rate regardless of share capital size.
• BFees are based on a sliding scale corresponding to the company's issued share capital.
• CNo registration fees are charged for any private company registration.
• DRegistration fees are paid annually based on the company's profitability.

Which of the following is NOT required to be delivered to the Corporate Affairs Commission (CAC) for the incorporation of a company limited by shares?

• AThe Memorandum of Association
• BThe Articles of Association
• CA statutory declaration of compliance by a legal practitioner
• DA prospectus inviting the public to subscribe for shares

Under Section 36 of CAMA 2020, from what date does a company become a body corporate with perpetual succession and a common seal?

• AFrom the date the promoters hold their first meeting
• BFrom the date of incorporation specified in the certificate of incorporation
• CFrom the date the company commences actual commercial business
• DFrom the date the first annual return is filed with the CAC

Under Section 22(5) of CAMA 2020, what is the default position regarding the right of a private company to transfer its shares?

• AShares are freely transferable to any member of the public without restriction.
• BA private company must restrict the transfer of its shares by its articles.
• CShares can only be transferred with the prior approval of the CAC.
• DShare transfers in a private company are completely prohibited by law.

What is the statutory rule under Section 852 of CAMA 2020 regarding the reservation of a company name?

• AA name can be reserved for a period of 60 days, during which no other company can registe…
• BA reserved name is held indefinitely until the promoters decide to use it.
• CReservation is only valid for 14 days and cannot be renewed.
• DNames cannot be reserved; registration is strictly on a first-come, first-served basis.

If a company is registered with a name that is identical to or closely resembles an existing registered name, the CAC can direct the company to change its name under Section 854. Within what period must the company comply?

• AWithin 14 days of the directive
• BWithin 6 weeks of the directive
• CWithin 30 days of the directive
• DWithin 3 months of the directive

Which of the following is a prohibited name that cannot be registered under CAMA 2020 without the consent of the CAC?

• AA name containing the word 'Chamber of Commerce' or 'Imperial'
• BA name containing the surname of all the directors
• CA name written entirely in English
• DA name that does not end with 'Limited' or 'Plc'

Under CAMA 2020, what is the legal consequence of a company carrying on business with a sole member for more than six months in the case of a public company?

• AThe company is automatically dissolved by operation of law.
• BThe sole member becomes personally liable for all debts contracted by the company after t…
• CThe company's status automatically converts to a private company.
• DNo legal consequences arise because single-member companies are permitted for all company…

Which of the following documents is primary in determining whether a transaction is within the corporate powers of a registered company in Nigeria?

• AThe Articles of Association
• BThe Memorandum of Association
• CThe Shareholders' Agreement
• DThe Board Charter

What is the statutory requirement under CAMA 2020 regarding the publication of a company's name?

• AA company must conspicuously paint or affix its name on the outside of every office or pl…
• BA company is only required to publish its name on its website.
• CA company must publish its name in the official government gazette every year.
• DNo publication is required as long as the registration number is displayed.

Which of the following statements is true regarding the issue of shares at a discount under CAMA 2020?

• AShares can be issued at a discount if approved by an ordinary resolution of the company.
• BShares can be issued at a discount with the prior consent of the CAC.
• CThe issue of shares at a discount is completely prohibited under CAMA 2020.
• DShares can only be issued at a discount to existing directors as remuneration.

Under Section 145 of CAMA 2020, which of the following is a permitted application of the Share Premium Account?

• APaying dividends to the members of the company
• BPaying up unissued shares to be issued to members as fully paid bonus shares
• CPaying directors' remuneration and bonuses
• DWriting off general trade losses incurred during the financial year

Under Section 124 of CAMA 2020, what is the key change regarding the structure of share capital at incorporation?

• ACompanies must have an authorized share capital that is double their issued capital.
• BCompanies are no longer allowed to have unissued share capital; all capital must be fully…
• CCompanies must pay up 100% of their share capital in cash immediately upon registration.
• DShare capital must consist entirely of preference shares.

Within what period must a company register a charge (fixed or floating) created on its assets with the CAC under Section 222 of CAMA 2020?

• AWithin 14 days of creation
• BWithin 21 days of creation
• CWithin 30 days of creation
• DWithin 90 days of creation

What is the legal effect of an unregistered registrable charge under Section 222 of CAMA 2020?

• AThe underlying loan contract becomes void and unenforceable.
• BThe charge is void against the liquidator and any creditor, but the money secured becomes…
• CThe company is automatically wound up by the court.
• DThe directors become personally liable for the secured loan.

Which of the following describes a 'floating charge' under Nigerian corporate law?

• AA charge that attaches to a specific, identifiable asset of the company.
• BA charge on a class of assets, present and future, that changes in the ordinary course of…
• CA charge that can only be created by public companies over real estate.
• DA charge that prevents the company from selling any of its inventory.

Which of the following events will trigger the 'crystallization' of a floating charge into a fixed charge?

• AThe company pays its annual dividends to shareholders.
• BThe company appoints a new company secretary.
• CThe company goes into liquidation or ceases to carry on business.
• DThe company registers a new trademark with the Ministry of Trade.

Under CAMA 2020, what is the rule regarding a company's power to alter (for example, increase, consolidate, or subdivide) its share capital?

• AA company can alter its capital if authorized by its articles, by an ordinary resolution…
• BAll capital alterations must be approved by the Federal High Court.
• CA company cannot alter its capital under any circumstances after incorporation.
• DAlterations can be done by a simple majority vote of the directors.

Which of the following is required for a company to reduce its share capital under Section 131 of CAMA 2020?

• AAn ordinary resolution and CAC administrative consent.
• BA special resolution and confirmation by the Federal High Court.
• CA board resolution and notice to the FIRS.
• DA unanimous vote of the creditors only.

Under Section 176 of CAMA 2020, which document is primary evidence of a member's title to shares in a Nigerian company?

• AThe Share Certificate
• BThe Memorandum of Association
• CThe Annual Return
• DThe Dividend Warrant

What is the statutory requirement under Section 115 of CAMA 2020 regarding the payment for shares?

• AShares must be paid for in cash only.
• BShares may be paid for in cash or valuable consideration other than cash.
• CShares must be paid for within 30 days of allotment, or the allotment is void.
• DShares can be issued as a gift without any consideration.

Under Section 168 of CAMA 2020, what is the default rule regarding the payment of commissions on share subscriptions?

• ACommissions can be paid up to any amount agreed by the directors.
• BA company may pay commission if authorized by its articles, and the commission does not e…
• CPayment of commission on share subscriptions is completely illegal.
• DCommissions can only be paid out of the share premium account.

Under CAMA 2020, what is the status of a 'redeemable preference share'?

• AIt is a share that can be redeemed at the option of the company or the shareholder, subje…
• BIt is a share that must be redeemed within one year of issue.
• CIt is a share that carries no voting rights under any circumstances.
• DIt can only be redeemed out of the capital reserves without using profits.

Which of the following is true regarding the 'Register of Members' under Section 109 of CAMA 2020?

• AIt is a private document accessible only to the company secretary and auditor.
• BEvery company must keep a register of its members, which must be open to inspection by th…
• CThe register is kept at the CAC and not at the company's registered office.
• DThe register must only contain the names of directors.

Under Section 181 of CAMA 2020, what is the procedure for transferring shares in a public company?

• AShares can only be transferred with the consent of all other shareholders.
• BShares must be transferred using a proper instrument of transfer, which must be delivered…
• CShares can be transferred by oral agreement followed by physical delivery of the certific…
• DAll transfers must be executed directly on the CAC portal without company intervention.

Under CAMA 2020, what is the meaning of 'lien on shares'?

• AIt is a right of the company to sell a member's shares to recover unpaid calls or debts o…
• BIt is a mortgage created by a member over their shares in favor of a commercial bank.
• CIt is a restriction that prevents a member from voting at general meetings.
• DIt is an order of the court blocking the transfer of shares pending litigation.

Which of the following is true about a 'debenture' under CAMA 2020?

• AIt is a document issued by a company acknowledging a debt and containing terms of repayme…
• BIt is a share class that carries fixed cumulative dividends.
• CIt can only be issued by public companies to foreign investors.
• DIt represents an ownership stake in the equity of the company.

Under Section 207 of CAMA 2020, what is the role of a 'Debenture Trust Deed'?

• AIt is a contract that appoints a trustee to protect the collective interests of debenture…
• BIt is a document that converts debentures into ordinary shares automatically.
• CIt is a deed that registers the company as a non-profit trust with the CAC.
• DIt is a document used to appoint directors for the debtor company.

What is the statutory restriction on 'financial assistance' by a company for the acquisition of its own shares under Section 183 of CAMA 2020?

• APrivate companies are allowed to give financial assistance, but public companies are gene…
• BBoth private and public companies are generally prohibited from giving financial assistan…
• CFinancial assistance is fully permitted for all companies without any restrictions.
• DFinancial assistance is only prohibited if the assistance exceeds 50% of the company's ne…

Under Section 112 of CAMA 2020, what is the default position if a company's shares are not fully paid up at the time of winding up?

• AThe member is exempt from making any further payments.
• BThe member is liable to contribute the amount unpaid on their shares to meet the company'…
• CThe member must pay double the nominal value of their shares as a penalty.
• DThe shares are automatically forfeited to the state government.

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

• ABy a special resolution passed at an AGM.
• BBy an ordinary resolution passed at a general meeting, requiring special notice.
• CBy a unanimous decision of all other directors.
• DBy a simple letter of dismissal signed by the company secretary.

What is the statutory minimum number of directors required for a company (other than a small private company) under Section 271 of CAMA 2020?

• AAt least one director
• BAt least two directors
• CAt least three directors
• DAt least five directors

Which of the following describes the fiduciary duty of a director regarding corporate opportunities as codified in Section 306 of CAMA 2020?

• AA director can exploit a corporate opportunity for personal benefit if they do so outside…
• BA director must not exploit for personal benefit any opportunity that belongs to the comp…
• CA director can exploit any opportunity that the board has previously rejected, without in…
• DDirectors have no restrictions on using company information for personal investments.

Under Section 278 of CAMA 2020, what is the age limit or restriction for the appointment of a director in a public company?

• ANo person over the age of 70 can be appointed as a director.
• BA person who is 70 years or older can be appointed, provided special notice disclosing th…
• CThe maximum age limit for a director is 65 years.
• DThere is no age disclosure requirement for public company directors.

Which of the following disqualifies a person from being appointed as a director under Section 275 of CAMA 2020?

• ABeing an undischarged bankrupt
• BBeing a member of the political opposition party
• CHaving less than 10 years of business experience
• DBeing a foreign national without a residence permit

What is the legal status of the Company Secretary in Nigeria as clarified by Section 330 of CAMA 2020?

• AThe secretary is a mere administrative clerk with no executive authority.
• BThe secretary is an officer of the company with statutory and administrative duties.
• CThe secretary is an independent contractor who cannot bind the company.
• DThe secretary has the same powers as the Managing Director.

Under Section 330 of CAMA 2020, which of the following companies is exempt from the mandatory requirement to appoint a Company Secretary?

• AAll public companies (Plc)
• BA small company (as defined under the Act)
• CA company limited by guarantee (Ltd/Gte)
• DA company with foreign shareholding

For public companies, Section 332 of CAMA 2020 mandates that a Company Secretary must hold professional qualifications. Which of the following is NOT a recognized qualification?

• AA member of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN)
• BA legal practitioner in Nigeria
• CA chartered accountant (ICAN or ANAN)
• DA university degree in Business Administration or Economics