The Corporate Affairs Commission (the “CAC”) has recently modified one of its post-incorporation forms - the Form CAC 7A (the “Form”), which is the form required for filing a notice of the appointment, resignation or removal of a director at any time after the incorporation of a company. Prior to the modification, the Form was required to be signed by a newly appointed director(s) on the consent/signature column (“Section B”) of the form and by two subsisting directors in section D on the second page. While the modified form still requires the signature of incoming directors on the consent/signature column, Section D on the second page no longer requires the signatures of two subsisting directors. Section D can now be signed either by two subsisting directors, or a director and company secretary or a director and an authorized officer of the company.
We believe the Form was modified to alleviate the hardship suffered by companies which had only one director left on the Board (whether due to the resignation, removal or death of previous directors) and wished to appoint another director. In the past, such companies could not appoint an additional director because they did not have two subsisting directors to sign Section D on the Form. The only option available in such cases was for companies to approach the courts for approval to convene a court ordered meeting in accordance with the provisions of Section 223 of the Companies and Allied Matters Act(CAMA). In line with the provisions of CAMA, the court order to be sought would allow for a director to hold a meeting for the appointment of new director(s) in addition to granting ancillary orders for the signing of the Form and the filing of same with the CAC.
With the modification of the Form, companies left with one director can now appoint new directors with ease as Section D of the Form can now be signed by a director and company secretary or an authorized officer. This is however subject to the existing director obtaining a shareholders’ resolution approving the appointment of the new director(s).
The modification of the Form is a commendable effort by the CAC and is definitely another initiative for ensuring the ease of doing business in Nigeria.
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