Legal Duties of Directors of a Nigerian Company – Part 1
How often have you bought a new gadget, opened the box, and immediately started using the gadget without reading the user manual?
All the time I bet!
Well, we are all guilty of this behavior.
Assuming the position of a director of a Nigerian company without knowing the legal duties of a director is akin to setting up a gadget without the user manual. You should read the user manual and understand your duties before you accept a director appointment.
You might think, assuming the role of a director of the Company is no biggie, but you are wrong, it is a really big deal. It requires a foundation of knowledge, a sprinkling of experience, and a topping of grit to make the tough decisions required of a director. Above all, it requires an in-depth understanding of the legal expectations for the position.
If you didn’t already know, the user manual for a director in a Nigerian company, is the Companies and Allied Matters Act 2004 (CAMA) (and the Company’s Articles of Association).
Whether you are a director of a listed company or a private company, you have the same legal duties to the company (not the shareholders). Also, a Shadow Director owes these same obligations.
Even if the shareholders place additional duties on you as a director, they cannot relieve you of the burden of the duties provided in CAMA.
There are civil (and in some cases, criminal) consequences if directors don’t meet their duties. And for some duties, the burden continues to apply even after the directorship position ends.
We will walk you through the duties you owe as a director in our forthcoming posts, so watch this space.
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