- 1 Marks
Question
In accordance with the provisions of CAMA 2020, which of the following is TRUE of a company limited by guarantee?
A. Must be owned by one person
B. N200,000 in nominal value of its share capital must have been issued
C. 55% of the issued share capital of a company must have been paid up
D. The consent of the Attorney General of the Federation (“AGF”) must be obtained before incorporation
E. It is restricted from appointing a director to hold the office of the Chairman and Chief Executive Officer of the Company
Answer
D. The consent of the Attorney General of the Federation (“AGF”) must be obtained before incorporation
Explanation:
A company limited by guarantee must seek the consent of the Attorney General of the Federation (AGF) before it can be incorporated, as stipulated by the Companies and Allied Matters Act (CAMA) 2020. This is to ensure that such companies are formed for non-profit purposes, often for promoting commerce, art, science, religion, charity, or any other purpose beneficial to the community.
- Tags: CAMA 2020, Company Limited by Guarantee, Corporate Governance
- Level: Level 1
- Topic: Business and Organizational Structures and Choices
- Series: MAY 2023
- Uploader: Theophilus