Formation of a company in Nigeria is one thing, to be qualified to form it is another. The desire to form a company is not just enough to automatically bring a company to life.
The person seeking to form or to join in the formation of a company must be someone who is considered qualified under the law.
Under the Companies and Appllied Matters Act, 2020, as amended, the part which deals with one’s qualification to join in the formation of a company is titled, “Capacity of individual to form company.”
This is provided for under Section 20 of the law. According to the provision of the law, an individual is not capable of joining in the formation of a company if he is not up to the age of eighteen; if he is an undischarged bankrupt or of unsound mind.
Section 20 of the law provides thus: Subject to subsection 2, an individual shall not join in the formation of a company under this Act if he is— less than 18 years of age; of unsound mind and has been so found by a court in Nigeria or elsewhere; an undischarged bankrupt; or disqualified under sections 281 and 283 of the CAMA Act from being a director of a company.
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Subsection 2 on the other hand states that a person shall not be disqualified under subsection 1 (a), if two other persons not disqualified under that subsection have subscribed to the memorandum.
The section further states that a corporate body in liquidation shall not join in the formation of a company under the Act, and that subject to the provisions of any enactment regulating the rights and capacity of aliens to undertake or participate in trade or business, an alien or a foreign company may join in forming a company. The stated section goes a long way to state the position of the law on the capacity of an individual to form a company.