The Blog

Written by Solomon Okedi

 

This article is published both in print and online in two (2) national dailies – Blueprint and Leadership. The discourse focuses on the powers of the Corporate Affairs Commission (CAC) to dissolve an Incorporated Trustees.

 

With the enactment of the Companies and Allied Matters Act (CAMA) 2020, it is safe to state here that the functions of Corporate Affairs Commission (CAC) as provided under section 7 of CAMA 2004, has been expanded by section 8 of CAMA 2020. This article seeks to analyse section 8(1) of CAMA 2020 and delve into questions bordering on whether the additional functions of the Commission is prone to abuse or conflict with constitutional rights while also serving as impediments to the Nigerian civic space. Accordingly, section 8 (1) (a-f) provides for the general functions of the Commission to include administration of the Act, business management, and removal of business names from the register, formation, incorporation, management, striking off and winding up of companies/dissolution of Incorporated Trustees, etc.

 

By virtue of section 823 (1) and (2) of the Act, where two or more trustees are appointed by any community of persons bound together by custom, religion, kinship, or nationality or by anybody or association of persons established for any religious, educational, literary, scientific, social, development, cultural, sports, or charitable purpose, they may apply to the commission to be registered. Upon being so registered, the trustees shall become a body corporate. This is used to establish non-profit making organisations such as clubs, churches, associations, town unions, charitable organisations, and non-governmental organisations. The Commission, under section 8(1), has the power to dissolve such incorporated trustees.

 

The Act, however, is worryingly silent on the grounds upon which the Commission may rely on in dissolving Incorporated Trustees. A situation such as this is almost certain to lead to an abuse of power as the Commission can dissolve an Incorporated Trustee as it pleases. The absence of provisions on how to check or challenge the Commission’s power in this regard, presents a situation of absolutism, prone to abuse. It becomes the question of who is heading the Commission at a time, and what interests he/she or the government of the day has – which could be religious, ethnic, or otherwise. The dangerous dimension is that, as it stands, there is no legal basis for challenging such powers in an event where the Commission dissolves an incorporated trustee, arbitrarily. The absence of grounds for the exercise of the powers of the Commission under review, leaves a sour taste for the Nigerian Corporate and Civic space.

 

There is, therefore, an urgent need, to make provisions for the grounds upon which the Commission may dissolve an Incorporated Trustee to avoid such arbitrary use of power and breach of the constitutional right to freedom of association. For instance, under section 20 of the South African Non-Profit Organisations (NPO) Act, No.71, 1997, the ground for deregistration of an NPO is non-compliance with its Constitution and its obligation under the Act, after receipt of written notice to so comply within a period.

 

– Okedi is from the faculty of Law, Kogi State University, Anyigba

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