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PLAY YOUR PART: START-UP COMPANIES CAN HELP NIGERIA *Kathleen OKAFOR Globalisation and digitization have undoubtedly, endowed many companies with humongous human, material and financial capabilities in the world economy. Consequently, companies like Apple, Google, Samsung, Toyota, Shell and our own Dangote, Guaranty Trust Bank, Zenith Bank have become richer than most national governments and even continents. For example, the market value of Apple is about $11 trillion. Dangote’s profit for 2017 is N805.6 billion, Zenith Bank recorded N177.9 billion profit in 2017, Guaranty Trust Bank recorded N200 billion profit in 2017. Apart from financial and economic growth, companies contribute immensely to the GDP’s of nations, provide employment, build infrastructure, embark on research and development, construct aircraft, produce energy, food, security etc. to augment government’s initiatives. Structure In spite of the role of companies in the world economy, the basic structure of companies remains simple: • The Board of Directors at the apex, who must consist of at least two directors to run the affairs of the company; • A Company secretary is needed who may not be a lawyer or Chartered Accountant or Chartered Secretary unless the Company is a public company; • The shareholders must be at least 2 persons who must meet at least annually; • Also, an Audit Committee must be appointed by a public company. Nevertheless, many people see floating a company as a tedious and expensive exercise. Many others are afraid to float companies because of ignorance of the basic requirements and legal tenets of corporate governance. Types of Companies Universally, once a proposed company name is approved by the Corporate Affairs Commission and the memorandum and Articles of Association are registered, two directors appointed, the company becomes a separate legal entity different from the incorporators. Accordingly, the company will have power to operate in its own name, sue and be sued, borrow money, have perpetual succession, and the members will not be liable for any debts, risks or obligations of the company. Furthermore, it is important to note that companies are either private or public. A Private company must not have more than 50 (fifty) shareholders and cannot invite the general public to subscribe to its shares. A public company must not restrict invitation to the public to subscribe to its shares. There are other types of business associations like Partnerships, Cooperative societies, business names, incorporated trustees, companies limited by guarantee. Any choice depends on the purpose or objects of the business e.g. professional bodies usually adopt the partnership model whilst foundations prefer incorporated trusteeships. Directors It is a legal requirement that the company must have at least two directors since the company is an artificial legal person lacking human existence and must decide through meetings. By law, a director of a company is a person duly appointed to direct the affairs of the company. Thus, a student may be a shareholder and appoint his mother, wife, brother or sister as a director of his company. In law, the board of directors is treated as an entirely separate body from the corporate owners. The directors manage the company acting as a collective board. In so doing, the board need not pass resolutions on every issue. Rather, if all or a majority of the Board agree on an issue, it is as good as a formal resolution even without a formal meeting. This principle was settled in the case of Re Bonellis Telegraph & Co. Likewise, a unanimous assent of members to a resolution of a properly convened general meeting is valid and is called the Duomatic principle. In Wright v Atlas-Right Europe Ltd, an informal unanimous assent was effective to validate a contract. 19

Profile for Baze University

BAZE FOCUS MAGAZINE (2018 EDITION)  

This is a publication that creates awareness on events in the University, while also serving as a platform for Staff and Students to show th...

BAZE FOCUS MAGAZINE (2018 EDITION)  

This is a publication that creates awareness on events in the University, while also serving as a platform for Staff and Students to show th...