ARCHIVES
VOL. 3, ISSUE 2 (2021)
Efficacy of single-member companies under the Nigerian companies act 2020: What lessons from other jurisdictions?
Authors
Babajide S Shoroye
Abstract
In jurisdictions with statutory provisions on single-member companies, the focus is on achieving the socio-economic benefits, and simplifying the formalities and operations of this form of corporate entity. This article critically examines the newly introduced concept of single-member companies in the Nigerian Companies Act 2020, with the objective of determining whether the provisions satisfy the formal features, operational scope and socio-economic purposes of the concept as recognized and practiced in other jurisdictions. Arguably the first critical analysis of the new provisions, this article determines that the efficacy of single-member companies under the provisions is bound to be constrained by a host of formalities. The formalities have no useful value other than their cost implications for single-member companies, and this can hinder entrepreneurs and sole proprietors from taking advantage of this new corporate form. The main source of the different constraints, as identified in this article, is that the Act applies to single-member companies the formalities that go with the distinction between ownership and management of a company. Such distinction is more appropriate to multi-member private limited liability companies and not to single-member companies where ownership and management are both vested in the same sole member. As single-member companies are incorporated and operated under the provisions, this article predicts that the constraints would become sufficiently evident for necessary legislative or executive remedial action.
Download
Pages:40-48
How to cite this article:
Babajide S Shoroye "Efficacy of single-member companies under the Nigerian companies act 2020: What lessons from other jurisdictions? ". International Journal of Social Research and Development, Vol 3, Issue 2, 2021, Pages 40-48
Download Author Certificate
Please enter the email address corresponding to this article submission to download your certificate.