BUSINESS

Procedures For Closing Down A Company In Nigeria

Published

1 year ago

Procedures For Closing Down A Company In Nigeria

The decision to close a business demands meticulous planning and respect to regulatory requirements. In order to ensure a seamless and legal end to business operations, Nigerian companies must be wound up in accordance with a number of stages and regulatory requirements. The goal of this article is to give business owners a thorough and in-depth overview of the process for winding down a company in Nigeria: “PROCEDURE FOR CLOSING DOWN A COMPANY IN NIGERIA.“

Meaning And Scope of A Company In Nigeria

According to the Company and Allied Matters Act (CAMA), a company in Nigeria is defined as an organization or business that has been formed as a separate legal entity from its owners or shareholders. It enables people or groups to come together for a shared goal. undertake business activities under the protection and recognition of the law.

The definition of a corporation in Nigeria is broad and encompasses a variety of businesses, including nonprofit organizations, limited liability partnerships, private companies, and publicly traded companies. Companies can carry out a diverse range of operations, such as manufacturing, selling, providing services, and investing.

Procedures For Closing Down A Company In Nigeria

Due to Nigerian businesses’ ability to conduct international business and open subsidiaries or branches abroad, the scope of an organization’s operations may also expand beyond of Nigeria’s borders. They must, however, abide by the rules and laws that apply in those areas.

The CAMA’s laws and regulations are applied to businesses in Nigeria. Along with rules governing corporate governance, shareholders’ rights, and responsibility, this also includes specifications for company creation, registration, and reporting. of officers and directors.

Companies in Nigeria benefit from things like limited liability for shareholders, which safeguards their personal assets in the event of a company collapse or indebtedness. In addition, businesses have the option of raising money through the issuance of shares and are eligible for tax breaks and government assistance programs.

Major Reasons For The Dissolution of Companies

Companies dissolve for a variety of important reasons, including:

Insolvency: Insolvency, which happens when a business is unable to pay its debts as they fall due, is one of the most frequent causes of company dissolution. Numerous circumstances, including inadequate financial management, economic downturns, rivalry, or unforeseen expenses, can lead to insolvency.
Voluntary Dissolution: On occasion, shareholders or the owners of a corporation may opt to to voluntarily dissolve a corporation for a variety of reasons, including retirement, a change in the company’s goals, a dispute between partners, or a lack of profitability. Following the legal procedures provided in the company’s bylaws and applicable legislation is usually required for a voluntary dissolution.
Non-compliance With Regulatory Standards: Businesses are required to abide by a number of legal and regulatory requirements, including completing yearly returns, keeping accurate financial records, and paying taxes. Punishments and, in some situations, compulsory dissolution by regulatory authorities may result from failure to comply with these duties.
Court Order: In some circumstances, a court order may be used to dissolve a company. This may occur if it is discovered that the business is engaging in fraudulent activity, operating illegally, or failing to uphold its duties to stakeholders.
Merger Or Acquisition: Companies may also be dissolved as a result of mergers or acquisitions. When two companies combine their operations or when one company acquires another, the acquired company may be dissolved and its assets and liabilities transferred to the acquiring entity.
Death Of A Key Individual: When a firm strongly depends on the knowledge and vision of a key individual, such as the founder or owner, their demise or disability may result in the organization’s collapse. Small firms and family-run businesses are particularly prone to this.
Successful Completion Of A Certain Project Or Venture: Some businesses are established to carry out a specific project. The corporation may be disbanded once that goal or mission is finished as it no longer serves a purpose.

Process on How To Dissolve a Company

Depending on the jurisdiction and the particulars of the organization, the procedure of dissolving a corporation can change. Here is a general breakdown of the steps in the dissolving process, though:

Determination And Shareholder Consent: Usually, the shareholders of a corporation decide whether to dissolve it. The dissolution resolution should be discussed and voted on at a meeting. a particular percentage of shareholder approval, as determined by the governing instruments of the Company and the applicable laws may be necessary.
The Consent Of The Board Of Directors: If the company has a board of directors, their consent may also be necessary. The board ought to get together to discuss and pass the dissolution resolution.
Compliance With Legal Requirements: Verify the laws and rules of the country where the business is incorporated. This could entail submitting particular paperwork and forms to the relevant government agencies. A notice of dissolution must be submitted, all permits and licenses must be revoked, and any unpaid tax debts must be settled, among other typical procedures.
Alert Interested Parties: Inform all pertinent parties about the company’s decision to dissolve, including the staff, customers, suppliers, and others. This makes the move easier and enables them to make the required preparations.
Resolve Unpaid Duties And Debts: ahead of The Company shall pay all Debts, Liabilities and Obligations hereunder prior to its dissolution. This includes settling any outstanding legal or contractual issues, paying off creditors, and shutting any bank accounts.
Distribution Of Any Remaining Assets: Any remaining assets of the firm shall be distributed among the shareholders in accordance with the company’s bylaws and any applicable laws after satisfying debts and obligations.
Official Dissolution: The business may proceed with the official dissolution if all necessary procedures and standards have been satisfied. This could entail submitting the final dissolution paperwork to the appropriate government agencies and requesting a certificate of dissolution or another type of official acknowledgment.
Cancellation Of Licenses And Registrations: In addition to the formal dissolution, it’s crucial to cancel any licenses, permits, registrations, or memberships the business may have had with organizations like tax authorities, business registers, trade groups, or professional organizations.

The Impact of Dissolution of Companies in Nigeria

In Nigeria, the impact of company dissolutions can be both good and harmful. Here are a few possible effects to think about:

Positive Impact

Reduced Market Competition: Dissolution may result in fewer businesses operating in a certain industry, which may present chances for current businesses to increase their market share. This heightened rivalry may lead to better goods and services for customers.
Reallocation Of Resources: When a business dissolves, its assets, including its human resources, may be transferred to other, more productive sectors of the economy. Increased efficiency, growth in other industries, and the creation of new businesses can all result from the redistribution of resources.
Economic Development And Entrepreneurship: The demise of one business may present chances for new startups and business owners to enter the market. They can promote economic development, innovation, and job creation as they fill the void left by the dissolved company.

Negative Impacts

Job Losses And Unemployment: The dissolution of a company often results in the loss of jobs for its employees. Depending on the size and influence of the company, a significant number of individuals may be affected, leading to job losses and an increase in unemployment rates. This can have a negative impact on the economy and cause social and financial hardships for the affected individual Impact
Economic Instability: The dissolution of a large or influential company can have a ripple effect on the entire economy, especially if it leads to a loss of investor confidence. This can result in reduced investments, decreased consumer spending, and overall economic instability.
Loss Of Tax Revenues: When a company dissolves, it ceases to contribute to government tax revenue. This loss of tax revenues can have a negative impact on public finances, potentially leading to budget deficits and reduced public services.
Supplier And Creditor Losses: When a firm dissolves, its suppliers and creditors may suffer losses. These creditors may sustain financial losses if the company owes them money to suppliers or has unpaid obligations, which can have an effect on their own operations and financial stability.

Conclusion

In order to safeguard the rights of creditors, debtors, and stakeholders, closing a business in Nigeria entails a number of legal processes. To comply with Nigerian rules and regulations, it is crucial to follow each step precisely and get professional guidance at each stage of the winding-up process. Business owners can successfully and properly wind up their firms while limiting any potential legal or financial ramifications by carefully following this approach. See

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BUSINESS

Adamawa Mortgage Bank Faces ₦10 Billion Lawsuit for Alleged Contract Breach with Wisdom Kwati Smart City

Published

2 weeks ago

Christopher

Wisdom Kwati Smart City Ltd, a prominent property development firm based in Abuja, has launched a lawsuit against Adamawa Mortgage Bank Ltd, seeking ₦10 billion in damages. The legal action follows a breach in a joint venture agreement between the two parties for a 20.5-hectare property development in Sangere Village, Yola South, Adamawa State.

Adamawa Mortgage Bank Faces ₦10 Billion Lawsuit for Alleged Contract Breach with Wisdom Kwati Smart City

The joint venture was established to transform the Sangere property into a large-scale residential development, with work already underway and over 3.5 billion invested in the construction of over 200 housing units and on the estate’s infrastructures. However, tensions arose when Adamawa Mortgage Bank publicly withdrew from the agreement, and without appropriate notice or engagement with the firm, released a statement on The Cable newspaper on November 9, 2024. In its announcement, the bank warned prospective buyers, stating:

“This is to inform the general public that Adamawa Mortgage Bank Ltd is not selling its land at Sangere-Wisdom Kwati Smart City. Anyone buying land at the property does so at his own risk. Take further notice that the bank has withdrawn from the joint venture agreement with Wisdom Kwati Smart City. Thank you. Signed Management.”

Following this statement, Wisdom Kwati Smart City Ltd, led by Chairman Mr. Wisdom Kwati, filed for both an interlocutory and interim injunction. The lawsuit names both Adamawa Mortgage Bank Ltd and its Managing Director, Dr. Noris Giscard Stanley, as defendants, alleging breach of contract and reputational harm caused by the bank’s public renouncement.

On November 14, 2024, the High Court of Justice of Adamawa State issued an interim injunction, temporarily restraining the mortgage bank from further actions related to the property until a resolution is reached. The court has ordered the defendants to respond to the claims and appear before the court within 30 days of receiving the summons.

The implications of the contract dispute are significant, given the current stage of the project. According to representatives of Wisdom Kwati Smart City Ltd, the company has invested over ₦3.5 billion in construction and developmental costs on over 200 buildings currently under construction at the site, of which over 50 units are at the finishing level of construction, and infrastructural development that are well into the third phase of the company’s five-phase development plan.

Industry observers suggest that a swift resolution of the dispute would be in the best interests of both parties and their investors, who rely on the stability of the joint venture to secure their investments. The project, originally designed to develop 317 mixed housing units, is already well past its midpoint, making it highly unreasonable for a partner to withdraw at this stage.

Wisdom Kwati Smart City Ltd has expressed a commitment to seeing the project through to completion and ensuring that stakeholders are kept informed of any significant developments in the case. Despite the legal steps taken, the real estate company has reportedly made several attempts to resolve the matter through dialogue, but the bank has reportedly not been forthcoming.

BANKING

Afreximbank Acts as Joint Lead Manager on Ecobank Transnational Incorporated’s USD 400mn Senior Unsecured Note Issuance

Published

1 month ago

Christopher

The proceeds of the note will fund general corporate purposes of the issuer, including refinancing of a USD350 million senior bridge-to-bond loan facility that was jointly coordinated by Afreximbank in March 2024.

African Export-Import Bank (“Afreximbank”) (www.Afreximbank.com) is pleased to announce that it has successfully acted as Joint Lead Manager and Bookrunner on a USD 400 million 10.125% Rule 144a/RegS senior unsecured note issuance by Ecobank Transnational Incorporated (“ETI”) due in October 2029.

The note issuance achieved peak orderbook oversubscription of 2.1x, backed by more than 70 high-quality and diverse investors comprising development finance institutions, asset managers, commercial banks and insurance companies from Africa, the UK, USA, Europe and the Middle East.

Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, commenting on the transaction, said: “We are pleased to have supported Ecobank Transnational Incorporated (“ETI”) in placing the first public Eurobond issuance by any Sub-Saharan African financial institution since 2021, following our bridge financing support earlier in the year. This transaction underscores Afreximbank’s capacity and readiness to structure innovative market access solutions for our pan-African banking partners.”

Afreximbank’s Advisory and Capital Markets (ACMA) department acted as Joint Lead Manager and Bookrunner on the issuance, working alongside international and African partners.

Distributed by APO Group on behalf of Afreximbank.

BUSINESS

Japan: African Development Bank Celebrates Three Decades of Japan-Backed Trust Fund

Published

1 month ago

Christopher

Japan: African Development Bank Celebrates Three Decades of Japan-Backed Trust Fund

Over the past three decades, Japan has contributed JPY 5.3 billion ($ 37.4 million) to the PHRDG, supporting 107 projects, with 96 completed and 11 ongoing as of September 2024

The African Development Bank Group (www.AfDB.org) has celebrated the 30th anniversary of the Policy and Human Resource Development Grant (PHRDG), a bilateral trust fund created by Japan in 1994.The initiative has contributed significantly to the development of Africa’s human capital, supporting over 100 transformational projects across various sectors.

PRST at Keizai group

Presenting a commemorative publication on the trust fund at the Ministry of Finance in Tokyo on Wednesday, 16 October, Dr Akinwumi Adesina Adesina, African Development Bank Group President said the publication highlights three decades of successful collaboration and the impactful projects funded by the Policy and Human Resource Development Grant, as well as the critical role the grant has played in Africa’s socioeconomic development.

Over the past three decades, Japan has contributed JPY 5.3 billion ($ 37.4 million) to the PHRDG, supporting 107 projects, with 96 completed and 11 ongoing as of September 2024. In recent years, the trust fund has seen a notable increase in contributions, underscoring Japan’s renewed commitment to fostering a climate-smart, resilient, inclusive, and integrated Africa.

Japan’s Vice Minister of Finance for International Affairs, Atsushi Mimura, said he was pleased the country’s partnership with the African Development Bank Group was going well. He pledged continued support, particularly for the African Development Fund, the private sector, and Japanese and African start-ups

“We look forward to deepening Japan’s relationship with the African Development Bank,” he said.

Mimura described the African Development Bank Group’s partnership with the World Bank’s plan to bring electricity to 300 million Africans (Mission 300) as a powerful narrative that draws attention to the continent’s energy needs.

Adesina commended Japan for its strong support of the African Dev?

elopment Fund, noting that the Fund has delivered impressive results. He sought the country’s support on a wide range of issues, including the 17th general replenishment of the African Development Fund, Mission 300 (http://apo-opa.co/3YcTfy2), Special Drawing Rights, the private sector, and start-ups, among others.

“We thank the people of Japan for standing in solidarity with the people of Africa,” Adesina said.

Since its establishment, the PHRDG has been a vehicle for Japan to share its expertise and experience in human resource development, empowering Africans to lead the transformation of their societies and economies. The grant has supported a wide range of projects aligned with Japan and the African Development Bank Group’s shared objective of human capital development. Officials said the projects have laid the groundwork for accelerated economic growth in Africa.

In a foreword to the Policy and Human Resource Development Grant at 30 publication, Deputy Vice Minister of Finance for International Affairs Daiho Fujii, expressed Japan’s pride in celebrating the 30th anniversary of the PHRDG.

“Japan is leading the international community’s efforts to overcome global challenges, particularly those affecting vulnerable populations. Through the PHRDG, we provide technical cooperation to develop the human resources that will drive Africa’s socioeconomic transformation. Our partnership with the African Development Bank Group is key to realizing a more resilient and prosperous Africa.”

As the Policy and Human Resource Development Grant enters its fourth decade, the African Development Bank Group and Japan have expressed eagerness to expand their partnership. With six new projects in the 2024–2025 pipeline, including initiatives in higher education, debt management, and climate-smart agriculture, the trust fund remains a critical tool for delivering impact across Africa, officials said.

Both parties pledged to continue to work hand in hand to unlock the potential of Africa’s human capital, fostering innovation and economic development for generations to come.

Japan–Africa Dream Scholarship Program: Investing in the Future

Among the most impactful PHRDG-funded initiatives is the Japan-Africa Dream Scholarship Program (JADS), launched in 2017. This program aims to develop Africa’s human capital by offering scholarships to high-achieving African students for master’s studies in fields such as agriculture, development economics, energy, and public health. To date, the program has awarded scholarships to 23 students from 10 African countries, two-thirds of whom are women.

Graduates of the JADS program have gone on to make significant contributions to their home countries. Alumni include Mary Yeboah Asantewaa from Ghana, who now works at SORA Technology in Accra, leveraging drone technology to control infectious diseases, and Glory Sibale from Malawi, who joined Tokyo’s Taiyo-Yuka recycling company, focusing on sustainable agricultural project management.

As part of his mission to Japan, Adesina also met with Nobumitsu Hayashi, the Governor of the Japan Bank for International Cooperation, to expand collaboration in key areas, including agriculture, healthcare, energy access, support for youth entrepreneurs, critical minerals, and regional corridors.

Later Wednesday, Adesina met with the leadership of the Association of African Economic and Development Japan, where both parties discussed potential collaborations for impactful projects. He continued with meetings with Kanetsugu Mike, Chairman of Mitsubishi UFJ Financial Group, and Ken Shibuya, Co-Chairman of the Global South Africa Committee of Keizai Doyukai (Japan Association of Corporate Executives).

The African Development Bank president invited business leaders to the 2024 Africa Investment Forum to be held in Rabat in December. Adesina also hosted representatives of the African diplomatic corps, development partners, and the private and public sectors, where they discussed leveraging co-creative relationships with Japanese companies and institutions.

Distributed by APO Group on behalf of African Development Bank Group (AfDB).