CRITIQUE OF THE SEPARATION OF OWNERSHIP AND CONTROL OF COMPANIES UNDER COMPANIES AND ALLIED MATTERS ACT 2004

CRITIQUE OF THE SEPARATION OF OWNERSHIP AND CONTROL OF COMPANIES UNDER COMPANIES AND ALLIED MATTERS ACT 2004

A company once incorporated is a legal person; distinct and separate from the members that established it1and is also endowed with all the powers of a natural person of full capacity for the furtherance of its authorised business or objects specifically set out in its Memorandum of Association.2 The Company being an artificial person – in contra-distinction to a natural human being, therefore, can only function or operate through the instrumentality of its human organs, officers and agents.3 This view was observed and more vividly stated by Viscount Heldane L.C. in Lennands Carrying Co. v. Asiatic Petroleum Co. Ltd4 A corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.

Aniagolu, JSC (as he then was) approved and aptly summed up the view in Trenco (Nig) Ltd v. African Real Estate Ltd5 that ... “a corporation, although having a corporate personality is deemed to have human personality through its officers and agents”. 6

This human element is as constituted in the body of directors referred to as the board of directors and also in the body of members constituted in the general meeting.7 The conception of company as a separate entity, and as such the exclusive owner of its own property is not just a convenient device for the ownership of business assets but also has a significant effect on the position of the members of the company, its directors and those who deal with it. While the nature of the relationship between the company and its directors is often described as that of principal and agent,8 on the one hand, that of the board of directors and the general meeting is still vague and has been a source of controversy for decades.

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THE LAND USE ACT OF 1978: APPRAISAL, PROBLEMS AND PROSPECTS

Until the end of the 19th Century, the shareholders in general meeting were usually regarded as the supreme organ of the company and directors as mere agents under the complete control of the shareholders in general meeting.9 However, this view has long faded out and been altered to the effect that the directors as a board are capable of exercising corporate powers independently from shareholders.

TOPIC: CRITIQUE OF THE SEPARATION OF OWNERSHIP AND CONTROL OF COMPANIES UNDER COMPANIES AND ALLIED MATTERS ACT 2004

Chapters: 1 - 5
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Number of Pages: 84

Price: 3000 NGN

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