1. What is the minimum number of Directors a Company is required to have?
The minimum number of Directors a Company is required to have is two.
2. What are the duties of a Director?
The Board's functions should include but not be limited to the following:
i. Strategic planning
ii. Selection, performance appraisal and compensation of senior executives
iii. Succession planning
iv. Communication with shareholders
v. Ensuring the integrity of financial controls and reports
vi. Ensuring that ethical standards are maintained and that the company complies with the laws of Nigeria.
3. Can we appoint a Company as a Director?
Previously, a company was allowed to serve as a director of a company. However, the Corporate Affairs Commission (CAC) recently issued guidelines in April 2018 barring any company from serving as a director. Details of any director who is to represent a company on the board of another company must now be reflected in the form CAC 7A to be filed; with the name of the company he is representing reflected beside his name.
4. Are Directors of private companies required to register with the Financial Reporting Council of Nigeria (FRCN)?
According to the Federal High Court in the case of Eko Hotels Limited v. Financial Reporting Council of Nigeria, (Unreported): Suit No. FHC/L/CS/1430/2012 delivered on 21/03/2014, the FRCN cannot enlarge its regulatory powers to regulate private companies. In essence, Directors of private companies which are not public interest entities are not required to register with FRCN. Section 77 of the FRCN Act defines public interest entities to mean governments, government organizations, quoted and unquoted companies and all other organizations which are required by law to file returns with regulatory authorities and this excludes private companies that routinely file returns only with the Corporate Affairs Commission and the Federal Inland Revenue Service. Please note that at the time of this publication, the decision of the Justice of the Federal High Court is on appeal at the Court of appeal.
5. Are there any particular qualifications that an individual should possess in order to be a director of a Company?
The Companies and Allied Matters Act does not provide for any formal or special education, experience, or skill an individual is required to possess in order to be appointed as a director of a company. However, we note that the evolving pattern in the selection process of a director places increasing importance on competence, experience and reputation.
The contents of this news alert are meant for the general information of our clients and friends and do not amount to legal advice. All enquiries on the subject may be made to: firstname.lastname@example.org
Adepetun Caxton-Martins Agbor & Segun
9th Floor, St. Nicholas House, Catholic Mission Street, Lagos Island, Lagos State, Nigeria.
Telephone: +234 (1) 462 2094; 462 2480; 740 6743 Fax: +234 (1) 461 3140