The Companies and Allied Matters Act (“CAMA” or “the Act) provides that every company registered in Nigeria must have a minimum of two directors at all times. The Act however allows each company the discretion to fix the maximum number of its directors . While a company’s articles of association may provide for a minimum and maximum number of directors, the minimum number of directors must not be less than the statutory minimum provided by the Act.
A company whose number of directors falls below two must within one month from the date of this event, appoint new directors. Where a company fails to appoint a director(s) in compliance with the statutory minimum within the stipulated limit, it is precluded from carrying on business until it has appointed a new director(s). The Act thus provides for situations where due to unforeseen circumstances (such as the sudden resignation or death of a director), the number of a company’s directors falls below two. It gives such companies a one -month grace period to appoint new directors.
Further, to ensure compliance with respect to the required minimum number of directors, the Act makes a director or member of a company who willfully permits the company to carry on business after the number of directors has fallen below two for a period of more than sixty days, liable for all the liabilities and debts incurred by the company during the period when it so carried on business.In order to avoid the negative consequences associated with the number of a company’s directors falling below the prescribed minimum, companies are advised to appoint at least three directors at incorporation and to ensure that the number of directors does not fall below this number at any given time. This ensures that a company can continue in business in the event of a sudden resignation, removal or death of one of its directors.
It is noteworthy that the CAMA Bill 2018 excludes small companies from the requirement to have a minimum of two directors. To this end, small companies can now have only 1 director. While the CAMA Bill is silent on the penalty applicable where a small company is left without a director (in the case of the sudden resignation or death of the existing director), it is best practice for a small company to have at least two directors at any given time.
 Cap C20 Laws of the Federation of Nigeria 2004
 Section 246(2) of CAMA
 Section 246(3) of CAMA
 Please note that the CAMA Bill is still awaiting presidential assent and is yet to be signed into law.
 The qualifying conditions for a small company include the following: (a) it is a private company; (b) its turnover is not more than N120,000,000 or such amount as may be fixed by the Commission from time to time; (c) its net assets value is not more than N65,000,000 or such amount as may be fixed by the Commission from time to time (d) none of its members is an alien ;(e) none of its members is a Government or Government corporation or agency or its nominee; and (f) in the case of a company having share capital, the directors between themselves hold not less than 51 per cent of its equity share capital.
 Section 271(1) of the CAMA Bill 2018
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