1.1 Background of the Study
In Nigeria today the law governing the administration of the company formation is the Companies and Allied Matters Act (CAMA). The Corporate Affairs Commission (CAC) is the body set up by section 1(1) of CAMA to administer the Act including the regulation and supervision of the formation, incorporation, registration, management, and winding up of companies under or pursuant of the Act. Principally, the Corporate Affairs Commission is one of the innovations of CAMA that gives the Commission the responsibility of incorporation of companies, registration of Business Names, Incorporation of Trustee of certain committees, bodies, associations and other regulations. CAMA also introduced Corporate audit Committee, insider trading, and went ahead to codify the duties of directors. A Company therefore, refers to an association of persons incorporated under companies’ legislation and in the case of Nigeria, under the CAMA.
A company comes into existence generally by a process referred to as incorporation. Once a company has been legally incorporated, it becomes a distinct entity from those who invest their capital and labour to run the company. The company is an artificial person and has separate legal personality. It has almost all rights as a natural person. It can own property, sue and be sued, has perpetual succession. However, since the advent of the corporate form, the extent to which corporations or companies should bear the same rights and duties as individuals has engaged corporate law scholars and the courts.
The long-standing debate surrounding the nature of corporate personhood has focused on three basic perspectives: (i) the concession or “artificial entity” theory, which sees the corporation as a creation of the state or sovereign that grants its charter. (ii) the aggregate theory, which sees the corporation as a fictional construct representing the sum of its share-holders, managers, and other constituencies who contribute to the success of the corporate enterprise; and (iii) the real entity view, which sees the corporation, not as an extension of the state or of its many constituencies, but as having a separate identity independent of both.
ASSESSMENT OF THE CHALLENGES OF COMPANY INCORPORATION IN NIGERIA