RIGHTS OF MEMBERS OF A COMPANY UNDER THE COMPANIES AND ALLIED MATTERS ACT, 2020

Abstract

This paper analyses the relevant provisions on the Rights of the members of a company as guaranteed in the Companies and Allied Matters Act 2020 (CAMA 20220). The aim is to comprehensively examine the rights of members of a company. This article adopted the doctrinal research methodology and found that the Act provides for several rights of members of a company. However, these rights are inadequate and the enforcement mechanisms are also ineffective. For instance, members are still required to notify the company of any intention to apply to court in cases of fraud or illegal transactions carried out by the Directors. Also, members at the Annual General Meeting are not empowered to increase the amount of dividend recommended by the board of directors. This article concluded that the CAMA 2020 subjected most of the members’ right to the whims and caprices of the directors. This article recommends among other things that members should be empowered to institute an action in respect of a cause of action that is vested in the company. The notification of intention to apply to court should be relaxed in cases relating to fraud and illegal transactions by the directors.