By Barr. Evans Ufeli
Business is critical under every economy and It has become one of man’s most engaging activities since the advent of the industrial revolution. Most countries of the world have enacted legislation to regulate business activities for the smooth running of society.
The formation and registration of companies are regulated by the Companies and Allied Matters Act (CAMA) and administered by the Corporate Affairs Commission (CAC). By section 18 of CAMA,the minimum number of persons required to form a company are two. Although facts are included in formation of a company,they are not reckoned in determining the the legal minimum. Thus where an infant is involved, there must be include at least two adults to meet the requisite minimum of two members.
It most be noted that both natural and artificial or juristic persons can form a company, provided they are not disqualified under any circumstances set out under section 20 of CAMA. For instance, a natural person is not allowed by law to join in the formation of a company if:
– He is less than 18 years, unless there are two other person of full age and capacity who are also members that can meet up with the legal minimum of two members.
– He is of unsound mind and had been so found by a court of law in Nigeria or elsewhere.
– He is an undischarge bankrupt, certified by court order.
– He is disqualified from being a director of a company by order of court for fraudulent activities relating to promotion and management of a company under section 25 CAMA.
The object and governing rules of a company are set up in two statutory documents, called Memorandum of Association and Articles of Association.
Business name is required where an individual intends to do business as a sole proprietor in which case he does not intend to call on the public to invest in the business through shares or any other means. He undertakes to manage his business and employ labour according to his financial capacity.
Business name is the most convenient form of doing business by a sole proprietor or partnership in a more recognisable form. By section 588 (1) CAMA “Business Name” refers to the name and style under which any business is carried on whether in partnership or otherwise. “Firm” means an unincorporated body of two or more individuals or one or more individual and one or more corporations, or two or more corporations,who or which have entered into partnership with one another with a view to carrying on business tor profit. Business name can be registered as a sole proprietorship or partnership business. Thus, the essence of registration is to secure the “Name style.”
The following persons or their combination can registers a business name:
– An individual
– Partnership firms
There are however restrictions for infants and persons previously involved in fraudulent trade practices. Unlike in the case of Infants where the registrar had discretion, registration is refused in the case of involvement in fraudulent practice.
Incorporated Trustees are non-business and non-profit making organisations. They are formed to facilitate the acquisition of corporate personality by a community of persons bound together by customs, religion,kingship,sociology or Nationality,literary development,sporting, scientific, educational etc. All associations, churches, clubs, etc are registered under Part C of CAMA and is referred to as Incorporated Trustees. The purpose of these organisations is to promote an ideology, a culture, science etc and it is prohibited from making profit.
Unlike companies which must be registered before it commences business or business name, which is allowed to operate for only 28 days after commencing business, organisation that are registrable under Part C of CAMA as Incorporated Trustees can operate without registration, but cannot take advantages of the incidences of incorporation unless registered.
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