Legal Question in Business Law in Nigeria

12.05.2016

Dear Sir / Madam,

Prior to the colonization of Nigeria by the British, there had existed some forms of economic activities within the region. On the local scale we had individuals trading within the towns and villages, and the articles of trade, were mostly cloths, farm produce and other metal products. Gradually the village trade spread into inter-town and inter-village trade. Essentially, it was not beyond peasant setting, and revolves round the minimum needs for subsistence of the people. The mode of exchange had remained trade by barter.

The Nigerian Company Law is part of its heritage from the English legal system imposed since the colonial days. The history of Nigerian Company Law could be briefly traced to the Joint Stock Companies Act 1855 which introduced the principle of limited liability of Companies and the role of Deed of Settlement was highly practiced in the United Kingdom.

With the reception of English Common Laws as well as the Statutes of General Application into Nigeria due to Colonialism, the first legislative attempt was made in 1912 to stem the practice of going to England to enquire about the position of the law on controversial Company issues. However, the Companies Ordinance of 1912 was only in force in the colony of Lagos. The amalgamation of Southern and Northern Nigeria in 1914 brought about the extension of the Ordinance to the entire Country.

Progressively, the Companies Ordinance 1922 repealed both 1912 and 1917 Ordinances. The 1922 Ordinance was based on the United Kingdom Companies Act 1929. It was subsequently amended in 1929, 1941, and 1954. In 1968, a new Companies Decree was promulgated to replace the 1922 Companies‟ Ordinance. The Company Act 1968 was mainly based on the United Kingdom Companies Act 1948 as part of the recommendations of the Jenkins Committee. The 1968 Companies Act being a federal law was listed in the Exclusive Legislative list of the 1979 constitution. To boost the innovations of the Companies Act 1968, the Nigerian Enterprise Promotion Act 1977 and the 1968 Act made copious provisions for the first time on matters such as mandatory provisions for accounts and greater accountability of Directors and Part X made inputs towards checking the excesses of company officers.

Defects in the 1968 Act gave birth to the Law Reform Commission set up in 1987 headed by his Lordship Hon Justice Dr Olakunle Orojo (Rtd) who together with his colleagues on the Commission ushered in the present Companies and Allied Matters Act 1990 and now 2004. It also ushered in other amendments such as the Investment and Securities Act 2007.

Regards,