This is a research work on the “roles of the organs and officers of an incorporated company”. In it, the organs are identified as the General Meeting (shareholders), and the Board of Directors, while the officers are identified as the directors, secretary, auditor, legal adviser. The company’s organs take the key critical resolutions cum decisions that sway the company for better or worse. And these resolutions cum decision are implemented through corporate management or governance by the officers of the company.
As legal personality, the company has a separate existence from the founders. Yet it is operated by human beings. The company functions through its Memorandum and Articles of Association, which can be altered through resolution passed by the majority of the company members at the General Meeting. Similarly, the company’s performance is also regulated by other statutory law, for example the Companies and Allied Matters Act, otherwise known as CAMA. Most of the company’s officers are appointed by the Board of Directors. However, this is subject to confirmation at the General Meeting.
Consequently, as a going concern/business, the company is prosperous when there is a healthy relationship between the organs, and officers, and particularly between the General Meeting (Shareholders), and the Board of Directors. Though the General Meeting works by the resolutions passed by the majority members, yet there are exceptions to this when the court enforces an individual member(s) action against the majority’s decisions. This is an exception to the rule in Foss V Harbottle.
The aim is to check fraud and ultra vires activities in the company. To be valid, an officer’s acts shall be done in good faith, diligently, and with care; and the company shall hold the officer liable for such acts. Essentially, the common law held the view that company’s officers owed their services to the company only, and not individual shareholders. However, this position has been rejected by the modern company practice and knowledge.
Hence, the roles of the contemporary company officers have been enlarged to embrace serving the company which employees them, the individuals shareholders under relevant circumstances, as well as the generality of the public that benefits or is affected by the activities of the company. Fundamentally, company practices in Nigeria are bedeviled by the apathy of the stakeholders in corporate governances, except when there is a selfis
Table of Contents
CHAPTER ONE INTRODUCTION
1.1 CONCEPTUAL BACKGROUND OF COMPANY’S ORGANS AND OFFICERS
1.2 LEGAL PERSONALITY OF A COMPANY
1.3 EFFECTS OF INCORPORATION OF A COMPANY
1.4 COMPANY’S FUNCTIONS AS A LEGAL PERSON
CHAPTER TWO ORGANS OF AN INCORPORATED COMPANY
2.1 THE GENERAL MEETING (SHAREHOLDERS): THE ROLES
2.2 BOARD OF DIRECTORS
2.3 COMMON LAW POSITION ON DIRECTORS ROLES
2.4 MODERN CONCEPTUALIZATIONS OF DIRECTORS ROLES
2.5 BOARD OF DIRECTORS: THE ROLES
CHAPTER THREE THE OFFICERS OF AN INCORPORATED COMPANY
3.1 The Managing Director
3.2 The Company Secretary
3.3 The Auditor
3.4 The Legal Practitioner
CHAPTER FOUR THE RELATIONSHIP BETWEEN THE ORGANS AND OFFICERS IN THE CORPORATE GOVERNANCE OF THE COMPANY
4.1 Corporate Governance
4.2 Residual Powers And Functions In The Company’s Corporate Governance
4.3 Checks and Balances Roles In Corporate Governance
4.4 Interdependency of Roles and Functions In Corporate Governance
4.5 The Roles of Audit Committee: In Corporate Governance
4.6 DELEGATIONS OF FUNCTIONS IN THE COMPANY
4.7 SOME EXCEPTIONS ON THE ROLES OF ORGANS AND OFFICERS OF THE COMPANY
CHAPTER FIVE OBSERVATIONS, RECOMMENDATIONS, AND CONCLUSION
5.1 SOME OBSERVATIONS IN THE NIGERIAN CORPORATE SYSTEM
5.2 RECOMMENDATIONS
5.3 CONCLUSION
Objectives and Topics
This research examines the division of power and functional responsibilities between the primary organs (General Meeting and Board of Directors) and the essential officers (Managing Director, Secretary, Auditor, and Legal Practitioner) of an incorporated company within the Nigerian legal framework, focusing on how these roles interact to maintain effective corporate governance.
- Legal structure and personality of incorporated companies.
- Fiduciary duties and agency roles of directors and officers.
- Mechanisms of corporate governance, including checks, balances, and audit oversight.
- Impact of the Companies and Allied Matters Act (CAMA) on corporate performance.
- Challenges of stakeholder apathy and regulatory compliance in the Nigerian corporate system.
Excerpt from the Book
1.2 LEGAL PERSONALITY OF A COMPANY
Legal personality has been defined by George Whitecross Paton and quoted in the Black’s Law Dictionary (Supra) as: “Legal personality… refers to the particular device by which the law creates or recognizes units to which it ascribes certain powers and capacities”.
In the above definition, a unit is synonymous with a company. So that by acquiring a legal personality, the company becomes a legal entity distinct from its members. The company, therefore enjoys rights, as well as discharges duties which are not available to the company’s members. By extension, the company is capable of suing and being sued in its corporate name and activities. Consequently, legal personality creates in the company as “artificial person” as opposed to a “natural person”.
Being an artificial person, the company is therefore made an abstract entity that unfortunately cannot by itself organize and conduct its own affairs and business. On this, the company seeks assistance through the law of agency principles. Thus, through the human agencies the company’s polity and policies are formulated, and decisions made or taken on the behalf of the company by human beings. These individuals essentially stand in a fiduciary and agency relationships with the company. Similarly, the individuals are the alter ego through which the “mind” and “will” of the company are carried out or directed. This analogy and explanation were clearly brought by the court per Lord Haldane in the case of Lennard’s Carrying Co Vs Asiatic Petroleum Ltd as “…a corporation is an abstraction. It has no mind of its own any more that it has a body of its own; its active and directing will must consequent be sought in the person or 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….”
Summary of Chapters
CHAPTER ONE INTRODUCTION: Explores the foundational concepts of company organs and officers, including the nature of legal personality and the implications of company incorporation.
CHAPTER TWO ORGANS OF AN INCORPORATED COMPANY: Analyzes the roles of the General Meeting (shareholders) and the Board of Directors, contrasting common law positions with modern conceptualizations of director duties.
CHAPTER THREE THE OFFICERS OF AN INCORPORATED COMPANY: Details the specific responsibilities and legal status of the Managing Director, Company Secretary, Auditor, and Legal Practitioner.
CHAPTER FOUR THE RELATIONSHIP BETWEEN THE ORGANS AND OFFICERS IN THE CORPORATE GOVERNANCE OF THE COMPANY: Investigates the interdependency, checks, and balances that govern the interactions between these corporate entities, including exceptions to standard roles.
CHAPTER FIVE OBSERVATIONS, RECOMMENDATIONS, AND CONCLUSION: Evaluates current Nigerian corporate practice, identifies regulatory gaps, and provides suggestions for improving governance standards.
Keywords
Corporate Governance, Companies and Allied Matters Act, CAMA, Incorporated Company, General Meeting, Board of Directors, Managing Director, Company Secretary, Fiduciary Duty, Agency Relationship, Ultra Vires, Shareholder Rights, Auditor, Internal Control, Nigeria.
Frequently Asked Questions
What is the primary focus of this research?
The work focuses on identifying the roles of the organs (General Meeting, Board of Directors) and officers (Directors, Secretary, Auditor, Legal Practitioner) within an incorporated company and how their interaction influences corporate governance.
What are the core thematic areas discussed?
Key themes include the legal personality of companies, the fiduciary and agency duties of directors, the procedural requirements of corporate meetings, and the regulatory framework established by CAMA in Nigeria.
What is the ultimate research objective?
The objective is to understand how these entities contribute to or hinder the prosperity of a company as a "going concern" and to address deficiencies in the Nigerian corporate system.
Which scientific or legal methods are applied?
The research utilizes a legal-analytical method, examining statutory provisions from the Companies and Allied Matters Act (CAMA) and analyzing relevant judicial precedents and case laws.
What aspects are covered in the main section of the study?
The main sections cover the conceptual background, the functional roles of primary organs and officers, the dynamics of corporate power and decision-making, and the challenges regarding governance and accountability.
Which keywords define this work?
The work is defined by terms such as Corporate Governance, CAMA, Fiduciary Duty, General Meeting, Board of Directors, and Ultra Vires.
How does the author view the role of the Company Secretary in modern business?
The author argues that the Company Secretary has evolved from a "mere servant" or clerk to a crucial "Chief Administrative Manager" and "administrative harmonizer" vital for strategic corporate development.
Why is the "Foss v Harbottle" rule significant in this context?
The rule is significant because it limits the ability of individual or minority shareholders to sue for irregularities; the text examines how this rule is applied and where modern judicial exceptions have been carved out to ensure justice.
What critique does the author offer regarding Nigerian corporate law?
The author highlights ambiguities, inconsistencies in terminology, and a lack of specific disciplinary procedures for executive directors within the current CAMA framework, advocating for more robust reforms.
- Quote paper
- Okechukwu Dominic Nwankwo (Author), 2016, Roles of the Organs and Officers of an Incorporated Company, Munich, GRIN Verlag, https://www.grin.com/document/341603
