See section 171 (2) and S.

171 (3) on lifting of the veil when the number of directors of a company falls below 2
for more than 1 month.

The veil is lifted so that directors and shareholders of the company can be fined personally and liability for the
companies debts incurred after the one month imposed on the directors and shareholders personally

DHN v TOWER HAMLETS, LONDON BOROUGH COUNCIL (NOT DHL)

For those who haven't quite understood the doctrine of the separate, distinct, and independent legal
personality of a company (SLP), what it simply means is that once a company is created by registration (at the
office of the registrar of companies) the law treats the company as an artifical human being and gives it all the
powers, duties, rights and obligations of a natural human being so that the company can in theory do any and
everything that a natural human being can do. For example, it can sue and be sued; it can enter into a contract;
it can breach a contract; it can own land; it can buy and sell land; it can commit a crime; it can be prosecuted for
a crime; it can employ people; it can own a business; it has can die. It can do all of these things in the same way
that a natural person can. In short, it has the capacity of a natural human being!

And in addition to SLP, it has VOI.

It may also have limited liability

SLP, VOI, and possible limited liability, makes the registered company quite unique among all the other types of
business structures or organisation
Limited liability

Working capital – the total amount of money each company requires to trade with. What ever money is
required is stated in the application at the Registrar General Department. 100,000 (Authorized capital) capital is
divided into units or shares. The share of the company profit is called dividends to any person that hold any
units of the company.

Reasons why people buy shares in companies.

1. Dividends
2. Capital appreciation.

LBG

Not registered with shares and their members are not share holders because they are not registered with
shares. Their member are rather called members by guarantee and not shareholders. Members pay dues or
subscriptions. Most churches are registered by guarantee. The main reasons for registering them is not making
profit.

Company law Act

Section 7 (8)

Types of shares

Nil paid shares: companies are allowed to sell their shares on credit, but they are not allowed to give their share
for free. Shares must always be given on consideration. It can be paid in cash or in kind.

Part paid shares

Fully paid shares

The liability of the members is limited to the remaining amount of on their shares.

NB: you can convert limited shares into LBG (limited by Guarantee) but the conversion of the other way round is
not allowed. The Acts does not allow LBG to be converted because we need plenty of the LBG in the country.
LBG serves the good of the people.

Authorized Shared Capital………

Stated Share Capital……………….maximum of amount of capital your authorized to raise

Issues Share Capital……………. Amount of shares you have issued out

The difference between Private company and Public Company

Private company Public Company

Restriction of members to 50 No Restriction of members of the company
restriction on members ability to transfer shares No restriction transfer of share by its members
Prohibited on raising money from the General Public No prohibition of raising money from the General
through the sale of shares Public by way of issuing shares

An incorporated Company and Unincorporated Company

Incorprorated Company Unincorporated Company

Has SLP-
All companies registered under CA 2019 are
incorporated.
Vast majority of companies are reg under There are few companies that are incorporated:
incorporated because they do not have SLP eg: when two or more
people come together for a common purpose, they
are regarded as company but unincorporated
because they have not registered.

Constitution of

Section 23

1. Salomon v Salomon & Co.

2. Trevor V Whitworth
3. Foss v Harbottle
4. Royn British Bank v Turquard
5. RE Duomatic
6. Prest v Petrodel Resources ltd.