Last updated on November 29th, 2023 at 02:52 pm
Does your company want to change one of the directors on its board? Change of company director falls under several reasons according to the Corporate Affairs Commission (CAC), Nigeria’s sole agency that is responsible for the registration of businesses and companies in Nigeria.
Reasons for change of a director
- Voluntary Resignation of a director
- Replacement due to the resolution of the shareholders
- Death of a director
- Uncultured behaviour of a director
- Transfer of ownership
- An addition
Failure of a director to optimally perform their role could also call for a change of director, whichever the case may be, such replacement of change must strictly follow the stipulated laws guiding the registration of a company in Nigeria
And a special resolution must be passed by the existing directors. Such inclusion or exclusion must get the consent of the existing director.
The Board of directors may appoint new directors to fill any casual vacancy arising out of death, resignation, retirement or removal.
Section 274 (1) CAMA Act 2020, page 163
Who is a director in an incorporated company?
Chapter 11, section 269 (1) of the Company and Allied Matters (CAMA) Act 2020 defines a director of a company as someone who directs and manages the business of the company.
In general terms, directors are charged with the responsibilities of managing the financial and human resources of a company for the firm to meet its goals.
The law specifically states that only an individual and NOT a body can be appointed as a director.
The minimum number of directors a company can have
In Nigeria, the minimum number of directors a registered company can have is two, according to section 271 of CAMA. However, we’ve seen instances where a company has just one.
An addition is subject to the approval of the Corporate Affairs Commission. And could have as many as 40 directors which must be governed by the Articles of Association of the company.
Removal of company director
Section 288 (1) is very clear on how a director of a company can be removed, however, “a special notice is required of any resolution to remove a director or to appoint some other person instead of a director so removed, at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director.”
Process of removal:
The company is statutorily mandated to send a copy of the notice to the director concerned (whether or not he is a member of the company) and is entitled to be heard on the:
- resolution at the meeting.
- Application for the change of director
After this is done, you can now submit an application for the change of company director to the CAC through the post-incorporation portal of the commission.
In the past, the secretary of the company was required to fill the Form CAC 7 (Particulars of Directors) that contains the particulars of directors after the removal at the CAC within 14 days of the passage of the resolution, but since all registration and activities of the CAC has been digitalised, you can use the post-incorporation portal.
Most times, the post-incorporation portal full functionality is available to accredited agents of CAC.
This leads us to the question:
The cost implication of changing a company director in Nigeria
On the post-incorporation portal, NGN10,000 is payable to the CAC via remita, but charges by bank and payment platform could make you spend an additional NGN500.
As such, the cost of replacing a director of a company in Nigeria is NGN10,500, however, you could pay as much as NGN20K to get this done if you’re using the services of a CAC-accredited agent.
The requirements to change company director
Name of the director to be changed or replaced.
Details of the incoming director must include the following:
- First name
- Other names (if any)
- Former names (if any)
- Date of Birth
- Activate Email
- State of Contact Address
- LGA of Contact Address
- City of Contact Address
- House Number of Contact Address
- Street Name of Contact Address
- Identity type
- Identity number
- Means of ID
Duration of change to reflect on company details
Usually, it shouldn’t be more than 48 hours, but in recent times, it could take up to 14 working days due to technical glitches on the official portal of CAC. CAC officials are the determinant.
Whether you making a replacement because a director resigned or due to demise, it’s the same process.
Changing a company director is simply making modifications to registration or updating the constitution of a company notification which must be sent to the commission charged with the mandate of monitoring the activities of business names and incorporated companies in Nigeria.