CONVERSION OF COMPANIES

This has to do with a company originally registered under a particular type of company changing
its status by conversion and re-registration without incorporating a new company. This is done
by following the laid down procedures and is subject to certain restrictions. But this does not
imply that it has changed its legal personality or that its former rights and liabilities are
extinguished. Thus, all its former rights and liabilities continue with it despite the conversion. E.g.
N25billion – statutory recapitalisation meant banks changed status from private to public
companies to increase their number of shareholders

A private company can be converted to a public company by following the procedure laid down in
Section 50 of CAMA. A company limited by shares may be converted to an unlimited company –
Section 51 of CAMA. An unlimited company may be converted to a company limited by shares –
Section 52 of CAMA. A public company may be converted to a private company – Section 53 of
CAMA. A statutory corporation may also be re-registered as a Company Limited by shares.
The following types of re-registration are prohibited:
1. A private company previously re-registered as unlimited cannot re-register to a public
company: Section 50(7) CAMA
2. Where a company attained its limited liability by re-registration from unlimited status, it cannot
re-register back to unlimited. Section 51(2) CAMA.
3. A public company or a company which has previously been re-registered as an unlimited
company shall not be registered as unlimited: Section 51(3) CAMA respectively
4. A re-registered unlimited company cannot be re-registered as a Public Company or a company
limited by guarantee: Section 52 (2) CAMA.
5. There is no provision for direct conversion from Public Company to Unlimited Company. So it
therefore follows that such company must convert to a Private Company and then to Unlimited,
but it cannot re-register back to Public Company
Simply put
● If a private company changed its status to become an unlimited company before, it
can't change its status again to become a public company. It's like once you've chosen
one path, you can't go back to the other.
● If a company changed from having unlimited liability to limited liability, it
can't go back to having unlimited liability again.
● Once a company becomes a public company or changes to unlimited status,
it can't switch back to being unlimited again.
● A company that has changed to unlimited status can't change its status again
to become a public company or a company limited by guarantee.
● If a company wants to change from being a public company to an unlimited
company, it first needs to become a private company, then change to unlimited status.
It can't directly switch from being a public company to an unlimited one.
PROCEDURE FOR CONVERSION AND RE-REGISTRATION
RE-REGISTRATION OF PRIVATE COMPANY (LTD) AS A PUBLIC COMPANY (PLC) (SECTION 50
CAMA)
- Board of directors resolution proposing the conversion/re-registration
- Notice of meeting to members indicating that a special resolution is going to be passed at the
general meeting
- Special resolution of the general meeting approving the conversion/re-registration
- Consequential alterations made in the Memorandum and Articles of association e.g. Name
Clause, Type of Company Clause, Increase in Share Capital (if applicable), removal of restrictions
on transfer of shares and regulations on appointment of Director and Secretary.
- Application to CAC for re-registration with
• Form CAC 1- availability and reservation of name
• Special resolution
• Copy of Memorandum and Articles of association duly altered
• Written statement certified on oath by Directors and Secretary that paid up capital as at date of
application is not less than 25% of authorised capital
• Statutory declaration by a Director and Secretary that the resolution has been passed and that
the Company’s assets are not less than the aggregate of the paid up capital and undistributed
reserves.
• Copy of prospectus or statements in lieu of prospectus delivered within the preceding 12
months to SEC (if applicable).
• Copy of balance sheet as at date of resolution or the preceding 6 months
• Evidence of up to date annual returns
• Original Receipt of prescribed filing fees. FSMWDPBAR
If satisfied with the requirements, CAC issues a new certificate, which serves as a prima facie
evidence that all the requirements for conversion and re-registration have been complied with.
This conversion has no minority objection in the sense that there’s no provision for the minority
to oppose the resolution passed to convert the company.
CONSEQUENTIAL ALTERATIONS TO THE MEMORANDUM OF ASSOCIATION
a. Alteration of name clause to end with PLC
b. Alteration of authorised share capital clause to meet legal minimum for PLC
c. Alteration of type clause to show that it is a public company

CONSEQUENTIAL ALTERATIONS TO THE ARTICLES OF ASSOCIATION

a. The name must be changed to PLC
b. Removal of the restriction on the transfer of its shares
c. Amendment of the qualification of Directors and appointment of those above 70 years old
d. Amendment of the qualification of the company Secretary
e. Written Resolutions not to be allowed
RE-REGISTRATION OF PUBLIC COMPANY AS A PRIVATE COMPANY (SECTION 53 CAMA)
- Board of directors’ resolution proposing the conversion/re-registration
- Notice for general meeting is issued to pass special resolution
- Special resolution by the general meeting approving the conversion/re-registration
- Consequential alterations made in the Memorandum and Articles of association e.g. Name
Clause, Type of Company Clause, Increase in Share Capital (if applicable), and inclusion of
restrictions on transfer of shares.
- Wait for 28 days for any application to cancel the resolution at the Federal High Court.
Application can be brought by any member with not less than 5% of the nominal value of the
company’s issued capital or not less than 5% of the Company’s members but not by a person
who has consented to or voted in favour of the resolution.
- If no application is made after 28 days, then Company should deliver within 15 days to the CAC
an application for re-registration with the forms below
- If application is made for cancellation, and the Court (Federal High CT) rejects the application,
it is withdrawn, then the Company shall deliver to the CAC an application for re-registration
within 15 days with:
• Application in a prescribed form for the re-registration
• Copy of the Special resolution passed
• Certified True Copy of Court Order refusing cancellation of resolution (where applicable)
• Availability and reservation of Re-registration name in duly approved Form CAC 1.
• Copy of Memorandum and Articles of association duly altered
• Original receipt of payment of duly approved Form CAC 1.
• Evidence of filing of annual returns.
- If application is made for cancellation and the CT confirms the cancellation, then submit to CAC
within 15 days:
• Printed copy of the resolution
• CTC of the Ct order
If satisfied with the requirements, CAC issues a new certificate which serves as a prima facie
evidence that all the requirements for conversion and re-registration have been complied with.

RE-REGISTRATION OF PRIVATE COMPANY LIMITED BY SHARES AS UNLIMITED COMPANY

(LTD – ULTD) S. 51 CAMA
THE PROCEDURE
1. Board of directors’ Resolution proposing the conversion.
2. Subscription of the prescribed Form of Assent to the re-registration by all the members or on
their behalf.
3. Statutory Declaration by all the Directors of the company that the persons who or on whose
behalf, the form of assent is subscribed constitute the whole membership of the company and
that all persons who subscribed on behalf of a member did so with the member’s authority.
4. Pass a Special Resolution altering the Memorandum & Articles of the current status of the
company
5. Stamp the altered memorandum and articles of association
6. Apply to the CAC in the prescribed form (Form 2.7 for conversion and re-registration) signed
by the Director/the Secretary setting out the alterations in the memo

Documents to submit to CAC

a. FORM CAC 1A-Availability and reservation of new name duly approved.
b. Application in prescribed form setting out the alterations signed by a director & secretary or
two known Directors.
c. A prescribed form of Assent of members in support of the re-registration
d. A statutory declaration made by the Directors of the Company.
e. Stamped memo & articles as altered.
f. Receipt of filing fees.
g. Evidence of filing Annual Returns up to date.

RE-REGISTRATION OF UNLIMITED COMPANY AS PRIVATE COMPANY LIMITED BY SHARES

(ULTD – LTD) S. 52 CAMA
The members are still liable on previous obligations of the company-S. 52(9) CAMA
The Procedure
1. Board meeting and Resolution to propose the conversion and re-registration.
2. General meeting passes a Special Resolution to convert and re-registration as LTD.
3. The Special Resolution shall state the proposed authorised share capital and the
consequential alterations in the memo & Articles.
4. Application in the prescribed form signed by a Director and Secretary or two known
Directors.
5. Memorandum and Articles of association
6. Payment of Registration fees.
7. Evidence of filing annual returns to date
NB: A copy of the Resolution and other documents must be filed, the CAC within 15 days of
passing the Resolution.
RE-REGISTRATION OF STATUTORY CORPORATION AS COMPANY LIMITED BY SHARES
A statutory corporation could be privatised and either unbundled into small companies or re-
registered as public Limited by share:

Essential Features of the conversion.

1. The company would cease to be statutory corporation and be formally registered with CAC.
2. The company would have memorandum & articles which becomes its source governance
rather than the enabling laws which set up the corporation
3. The company ceases to enjoy status of statutory corporation being entitled to a pre-action
Notice.

The Procedure
a. Bureau of Public Enterprises (BPE) obtains a government white paper to commercialise
 and privatise the enterprise and arrange its sale.
b. BPE takes steps to incorporate the new company as a public limited liability company
with CAC. Submit all approved documents.
c. BPE hands over the new company to its core investors.
PROHIBITED RE-REGISTRATIONS/ CONVERSIONS
Note: IT IS ONLY A PUBLIC COMPANY CONVERTING TO A PRIVATE COMPANY OR VICE
VERSA THAT CAN RE-REGISTER WITHOUT ANY RESTRICTION.