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Recognition Of Nigerian Single Member Companies: How Does This Really Work?


The Companies and Allied Matters Act, 2020, came into force in August 2020, repealing the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004 (CAMA 2020). CAMA 2020 introduced several changes into the company/corporate ecosystem in Nigeria, which have been thought to significantly increase the ease of doing business activities in Nigeria. One of the key introductions is the concept single member companies.

A single member company can be defined as a company formed with only one shareholder1 in distinction to the pre- CAMA 2020 position where every Nigerian company is required to have at least two shareholders/members.

  1. We have set out below highlights of provisions of the CAMA 2020 that impact on the governance structure and corporate actions of a single member company.         
    2.1 General Meetings
    We note that previously, all companies were required to hold a general meeting in each year as its annual general meeting (AGM) in addition to any other meeting in that year (Extra-ordinary General Meeting - EGM). The AGM for newly incorporated companies is to be held within 18 months of incorporation and subsequently in each year. Under the CAMA 2020, single member companies are not required to hold any form of general meetings as a sole shareholder cannot 'meet' with itself.
    Flowing from the above, companies with a single member are exempted from keeping minute books of meetings neither do they comply with the requirement on place of meetings in Nigeria.2 Further to the exemption of single member companies from holding general meetings, decisions which may be made in a general meeting are made in sole member companies, simply by such a member providing the board of directors with details of its decision (probably in form of a letter), and this has the same effect as if agreed by the members in general meeting.
    It is worthy of mention that failure to comply with the notification requirement does not affect the validity of any decision taken by that single member, it is only necessary for record purposes and to prevent penalty prescribed by the Corporate Affairs Commission (CAC) which will accrue for each day of default, in respect of filings..

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