FORMATION OF COMPANIES: A COMPARATIVE ANALYSIS

Abstract

Companies play a major role in every economy because they provide the much-desired goods and services to consumers, create employment opportunities, boost the economy, and bring innovation and growth. Companies carry on businesses which play a fundamental role in the economic success of every nation as companies create an enabling environment that cause development and economic welfare to thrive. The work was aimed at examining the provision of the Company and Allied Matters Act 2020 with a view to highlighting some of the novel provisions regarding the formation of companies and comparing same with other jurisdictions; South Africa, Ghana, the United Kingdom and India. This was achieved by examining the company laws of the said jurisdictions, establishing the similarities, differences and what Nigeria can imbibe from the jurisdictions compared. It was found that the major types of companies for carrying on business in the entire jurisdiction discussed are; companies limited by shares, limited by guarantee and unlimited companies which maybe a private company or a public company. In addition to the above, the Republic of South Africa and Ghana provided for external companies which are similar to foreign companies under the Indian company law. This is where a company registered in another country can carry on business in the said countries provided that such company has met the requirement of the law of the country where they are domiciled. It is recommended that a sole subscriber to the Memorandum of Association under the Company and Allied Matters Act should be made to elect a successor at the point of incorporation as this is in line with the principle of perpetual succession.