ICSAN Professional Programme I - Corporate Law (Nigeria)

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

• AOne person
• BTwo persons
• CSeven persons
• DFifty persons

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

• AN10,000
• BN100,000
• CN500,000
• DN2,000,000

What is the minimum issued share capital required for a public company under Section 27(2)(b) of CAMA 2020?

• AN500,000
• BN1,000,000
• CN2,000,000
• DN10,000,000

Which body corporate is established under Section 1 of CAMA 2020 with the mandate to administer the Act and manage the registration of companies in Nigeria?

• ASecurities and Exchange Commission (SEC)
• BCorporate Affairs Commission (CAC)
• CCorporate Governance Council (CGC)
• DMinistry of Industry, Trade and Investment

Under CAMA 2020, which type of company is defined as one that does not limit the liability of its members upon winding up?

• ACompany limited by shares
• BCompany limited by guarantee
• CUnlimited company
• DProprietary company

Under Section 394(3) of CAMA 2020, what is the maximum annual turnover threshold for a company to qualify as a 'small company'?

• ANot more than N20 million
• BNot more than N50 million
• CNot more than N120 million
• DNot more than N200 million

Under Section 394(3)(c) of CAMA 2020, what is the maximum net assets value threshold for a company to be classified as a 'small company'?

• ANot more than N10 million
• BNot more than N30 million
• CNot more than N60 million
• DNot more than N100 million

Which of the following statements is true regarding the appointment of a Company Secretary for a private company under CAMA 2020?

• AEvery company, including small companies, must appoint a Company Secretary.
• BThe appointment of a Company Secretary is optional for all private companies.
• CThe appointment of a Company Secretary is optional only for a small company.
• DA Company Secretary is only required for public companies.

Which of the following companies is exempt from the statutory requirement to hold an Annual General Meeting (AGM) under Section 237(1) of CAMA 2020?

• AEvery private company
• BA small company or a single-shareholder private company
• CA company limited by guarantee
• DOnly public companies are exempt

Under Section 22(3) of CAMA 2020, what is the maximum number of members a private company can have, excluding current or former employees of the company?

• A20 members
• B50 members
• C100 members
• DUnlimited

What is the legal status of a common seal for a Nigerian company under Section 98 of CAMA 2020?

• AIt remains mandatory for all companies and must be affixed to all contracts.
• BA company may have a common seal, but it is no longer mandatory.
• CA common seal is only mandatory for public companies.
• DThe use of a common seal is completely prohibited.

Before a company limited by guarantee can be registered under Section 26(5) of CAMA 2020, whose authority or approval must be obtained?

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

Which of the following correctly describes the legal nature of the Corporate Affairs Commission (CAC) under Section 2 of CAMA 2020?

• AAn unincorporated government department with no legal personality
• BA body corporate with perpetual succession and a common seal, capable of suing and being…
• CA partnership between the Federal Government and the Nigerian Bar Association
• DA private company limited by shares owned by the Ministry of Justice

Section 119 of CAMA 2020 requires companies to notify the Commission of and register details of which category of individuals?

• ACreditors holding debentures
• BPersons with significant control (PSC)
• CIndependent corporate auditors
• DAll minor shareholders under the age of 18

Under Nigerian corporate law (CAMA 2020), what is the default minimum percentage of shares or voting rights that qualifies a person as a Person with Significant Control (PSC)?

• AAt least 5%
• BAt least 10%
• CAt least 25%
• DMore than 50%

Under Section 421(1) of CAMA 2020, what is the statutory time limit for a company to file its annual returns with the CAC after holding its AGM (or for the year)?

• AWithin 14 days
• BWithin 21 days
• CWithin 30 days
• DWithin 42 days

Which of the following is a statutory restriction that MUST be included in the articles of association of a private company under Section 22(1) of CAMA 2020?

• AA restriction on the transfer of its shares
• BA requirement to have at least seven directors
• CAn absolute prohibition on borrowing money
• DA mandate to distribute all profits as dividends

Under Section 692 of CAMA 2020, what action can the CAC take if it has reasonable cause to believe that a company is not carrying on business and has failed to file annual returns for a consecutive period of 10 years?

• AForcibly liquidate and sell the assets of the company to the public
• BStrike the name of the company off the register of companies as defunct
• CArrest the directors and prosecute them in the Federal High Court
• DAppoint an administrator to manage the company's daily operations

Under Section 868 of CAMA 2020, what is the statutory definition of a 'foreign company'?

• AA company in which foreign nationals hold more than 50% of the issued shares
• BA company incorporated outside Nigeria but which has not been registered as a local compa…
• CAny company that imports more than 80% of its raw materials
• DA company whose principal place of business is outside West Africa

Which of the following is true regarding a company purchasing its own shares under Section 184 of CAMA 2020?

• AIt is absolutely prohibited under all circumstances to maintain capital.
• BA company can purchase its own shares if permitted by its articles and approved by a spec…
• CA company can purchase its own shares through an ordinary resolution of the board of dire…
• DOnly public listed companies are permitted to purchase their own shares.

Under Section 96(1) of CAMA 2020, what is the legal status of a pre-incorporation contract entered into by a promoter on behalf of a proposed company?

• AIt is automatically binding on the company from the date of incorporation.
• BIt is void ab initio and can never be enforced by or against the company.
• CIt is not binding on the company unless the company ratifies it after incorporation.
• DIt binds only the third party but does not bind the promoter or the company.

Which of the following correctly defines a 'promoter' under Section 95(1) of CAMA 2020?

• AAny person who subscribes to the memorandum of association of a company.
• BAny person who undertakes to take part in forming a company or who has taken part in its…
• COnly the first directors appointed at the time of incorporation.
• DA solicitor who drafts the incorporation documents for a professional fee.

What is the nature of the relationship and duties that a promoter owes to a proposed company under Section 95(2) of CAMA 2020?

• AA debtor-creditor relationship, owing a duty to repay all initial incorporation costs.
• BA fiduciary relationship, owing a duty of utmost good faith, to not make secret profits,…
• CA standard agency relationship, acting as an agent who is fully protected from personal l…
• DNo legal duties are owed until the company is formally registered by the CAC.

What remedy is available to a company under Section 95(3) of CAMA 2020 if a promoter makes a secret profit from a transaction with the company during its formation?

• AThe company must accept the transaction but can sue the promoter for criminal fraud.
• BThe company can rescind the transaction or recover the secret profit from the promoter.
• CThe company's registration becomes voidable at the option of the CAC.
• DThe company can unilaterally confiscate all shares owned by the promoter without compensa…

Under Nigerian company law, what is the collective term for the constitutional documents of a company under Section 35 of CAMA 2020?

• AMemorandum and Articles of Association (MEMART)
• BProspectus and Shareholder Agreement
• CCertificate of Incorporation and Annual Returns
• DPartnership Deed and Board Charter

What is the statutory effect of registering the Memorandum and Articles of Association (MEMART) under Section 46(1) of CAMA 2020?

• AIt serves only as a public notice with no contractual force.
• BIt has the effect of a contract under seal between the company and its members, and betwe…
• CIt creates a contract between the company and all third-party suppliers.
• DIt binds the directors personally to pay the debts of the company.

How does CAMA 2020 treat the capacity of a company and the doctrine of ultra vires under Section 43?

• AThe doctrine of ultra vires is strictly applied, making any act outside the objects claus…
• BA company has the capacity of an individual for the furtherance of its objects, and acts…
• CA company has unlimited capacity to carry out any business, and objects clauses are prohi…
• DUltra vires acts are only valid if ratified by the Attorney-General of the Federation.

Which statutory rule is codified under Section 115 of CAMA 2020 to protect third parties dealing with a company in good faith from internal procedural defects?

• AThe Rule of Constructive Notice
• BThe Rule of Indoor Management (Turquand's Rule)
• CThe Doctrine of Corporate Personality
• DThe Rule of Promissory Estoppel

What is the legal effect of a Certificate of Incorporation issued by the CAC under Section 41(1) of CAMA 2020?

• AIt is merely a registration receipt that must be renewed annually.
• BIt is prima facie evidence that all requirements of the Act as to registration have been…
• CIt guarantees that the company's business activities are legally compliant with all tax a…
• DIt can be revoked at any time by the CAC without notice or right of appeal.

Under Section 42 of CAMA 2020, from what specific date does a company become a body corporate capable of exercising all the powers of a registered company?

• AFrom the date the promoters sign the memorandum.
• BFrom the date of incorporation mentioned in the Certificate of Incorporation.
• CFrom the date the company commences actual business operations.
• DFrom the date the first annual returns are filed.

Under Section 29(1) of CAMA 2020, what suffix MUST a private company limited by shares have at the end of its name?

• APlc.
• BLtd. (or Limited)
• CLtd./Gte.
• DUltd. (or Unlimited)

Under Section 29(2) of CAMA 2020, what suffix MUST a public company limited by shares have at the end of its name?

• ALtd.
• BPlc. (or Public Limited Company)
• CCo.
• DInc.

What is the statutory suffix for a company limited by guarantee under Section 29(5) of CAMA 2020?

• AGte.
• BLtd./Gte. (or Limited by Guarantee)
• CNgo.
• DFdn.

Under Section 29(3) of CAMA 2020, what suffix MUST an unlimited company have at the end of its name?

• ALtd.
• BUltd. (or Unlimited)
• CCo. (Ultd.)
• DPte.

How can a company legally execute a deed or document in Nigeria under Section 102 of CAMA 2020 without using a common seal?

• ABy the signature of any one shareholder in the presence of a notary public.
• BBy being signed by two directors, or one director and the company secretary.
• CBy the signature of the Chief Executive Officer alone.
• DBy the signature of any employee authorized by a verbal board resolution.

Under what circumstance will a third party be barred from relying on the Indoor Management Rule (Section 115 of CAMA 2020) regarding an irregularity in a company's internal procedures?

• AIf the third party did not inspect the physical register of directors at the CAC before t…
• BIf the third party has actual or constructive knowledge of the irregularity due to their…
• CIf the transaction value is less than N1,000,000.
• DIf the company is a small private company.

What is the primary method for a promoter to discharge their fiduciary duty regarding a profit made in the course of promoting a company under Section 95?

• ABy keeping the profit confidential until the company makes a public offering.
• BBy making full disclosure of the profit to an independent board of directors or to the sh…
• CBy donating 10% of the profit to a charitable organization in Nigeria.
• DBy offering the company a low-interest loan matching the value of the profit.

If a company fails to ratify a pre-incorporation contract after it is registered, what is the default position of the promoter who signed it under Section 96(2) of CAMA 2020?

• AThe promoter is fully released from all liability because the company was registered.
• BThe promoter is personally bound by the contract and entitled to its benefits and liable…
• CThe contract automatically expires and becomes illegal.
• DThe third party is required to sue the CAC for damages.

Which of the following is NOT a statutory requirement for incorporation that must be submitted to the CAC under Section 36 of CAMA 2020?

• AThe Memorandum and Articles of Association (MEMART)
• BThe Statement of Proposed Directors and Company Secretary
• CA prospectus for public subscription of shares
• DA Statement of Compliance signed by the applicant or their solicitor

Under Section 85 of CAMA 2020, what action can the CAC take if a company registers a name that is identical to or closely resembles the name of an existing company?

• AThe CAC can immediately dissolve the new company without notice.
• BThe CAC can direct the company in writing to change its name within a specified period.
• CThe CAC can fine the directors N10,000,000 without requiring a name change.
• DThe CAC can transfer all assets of the new company to the existing company.

Under Section 146 of CAMA 2020, what is the legal nature of a share in a Nigerian company?

• AIt is real property (land) held in trust by the directors.
• BIt is personal property, transferable in the manner provided by the articles of the compa…
• CIt is a negotiable debt instrument that represents a direct liability of the state.
• DIt is a non-transferable personal privilege that expires upon the death of the holder.

If a company's articles do not define different classes of shares, what is the default statutory presumption regarding the rights of issued shares under CAMA 2020?

• AThe first 50% of shares issued are deemed preference shares and the rest ordinary.
• BAll shares are deemed to be ordinary shares with equal rights in voting, dividends, and r…
• CThe directors have the discretion to assign varying rights to shares on a case-by-case ba…
• DAll shares are classified as non-voting treasury shares.

Under Section 171 of CAMA 2020, what is the statutory timeline within which a company must complete and have ready for delivery a share certificate after the allotment of its shares?

• AWithin 14 days
• BWithin 30 days
• CWithin 2 months
• DWithin 6 months

Under Section 149(1) of CAMA 2020, in whom is the primary power to allot shares vested, and how can it be delegated to the directors?

• AIt is vested in the CEO, and cannot be delegated.
• BIt is vested in the company in general meeting, and may be delegated to directors via the…
• CIt is vested in the CAC, which must approve each allotment.
• DIt is vested in the board of directors, and cannot be revoked by the shareholders.

What is the rule regarding a private company providing 'financial assistance' for the acquisition of its own shares under Section 183 of CAMA 2020?

• AIt is absolutely prohibited under all circumstances to prevent asset stripping.
• BIt is permitted if approved by a special resolution, provided the company's net assets ar…
• CIt is permitted by a simple majority vote of the board of directors without shareholder i…
• DFinancial assistance is only permitted if the company is in receivership.

Which of the following correctly describes a 'debenture' under Section 191 of CAMA 2020?

• AAn equity share that carries double voting rights but no dividend rights.
• BA document issued by a company acknowledging a debt, which may or may not create a charge…
• CA certificate of deposit issued by commercial banks to finance imports.
• DA government bond issued by the Federal Ministry of Finance.

What is the operational distinction between a 'fixed charge' and a 'floating charge' created by a company over its assets?

• AA fixed charge has a fixed interest rate, while a floating charge has a variable interest…
• BA fixed charge attaches to specific, identifiable assets, while a floating charge hovers…
• CA fixed charge is registered with the CAC, while a floating charge is registered with the…
• DA fixed charge applies only to land, while a floating charge applies only to cash.