Daily Law Tips (Tip 622) by Onyekachi Umah, Esq., LL.M, ACIArb(UK)
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WHO ARE THE PERSONAL REPRESENTATIVES THAT CAN TAKE OVER A COMPANY UPON THE DEATH OF SHAREHOLDERS AND DIRECTORS?
Going by the provision of the Companies and Allied Matters Act, where all shareholder and directors of a company are dying (or dead), any of the personal representatives of the dying or dead shareholders is free to apply to the court for an order to convene a meeting of all the other personal representatives of the dying or dead shareholders entitled to attend and vote at a general meeting, for them to appoint new directors to manage the company.
If the personal representatives of dying or dead shareholders of a company fail to convene a meeting, the creditors of the company are empowered to do so. Who are personal representatives of a shareholder? Unfortunately, the Companies and Allied Matters Act, failed to define the words; “Personal Representatives” although it mentioned that personal representatives under customary law are recognized.
The Supreme Court has long defined “Personal Representatives” in a 1997 case. Below are the impeccable words of the apex court.
“In addition to the definition of “personal representative” in Section 2 of the Estate Law, the expression is also defined as “executors and administrators, whether acting with regard to personal property or with regard to real property.” See The Dictionary of English Law by Earl Jowitt and the case In re Bridgett and Hayes’ Contract (1928) 1 Ch.D 163 at 168. Personal representative therefore means the executor or administrator whether acting with regard to personal property or with regard to real property of the deceased.” Per EMMANUEL OBIOMA OGWUEGBU ,J.S.C ( P. 23, paras. C-E )
Personal Representatives of a shareholder are the Executors of the WILL of a shareholder (where a shareholder left a WILL) or the Administrators of the estate and Beneficiaries of a shareholder (where a shareholder left no WILL). Where customary law is applicable, Personal Representatives will include successors appointed in respect of deceased contributories. To learn more about Personal Representatives and Inheritance in Nigeria, read my earlier five (5) works via the titles/links below; How to Recover Property of the Dead in Nigeria., “Who Can Inherit Property of a Dead Person?”, “Women Have Equal Rights to Own/Inherit Any Property in Any Part of Nigeria Irrespective of Culture/Religion.” , “Requirements of a Valid Will.” and “Can a Will be Rewritten After Death of Its Owner?”.
A company cannot and will not die (windup) because its shareholders and directors are dead rather there will be a call for change of ownership and management of the company. Truly, companies are separate legal beings different from their owners (shareholders), directors, workers and agents. Good companies often outlive their founders!
My authorities are:
1. Sections 244, 246, 248(2) and 567 of the Companies and Allied Matters Act, 1990.
2. The respective Wills Laws and also Administration and Succession (Estate of Deceased Persons) Laws in states in Nigeria.
3. The Supreme Court’s judgement (on definitions of Personal Representatives, Administrators and Executors) in the case of UGU v. TABI (1997) LPELR-3324(SC)
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