An Examination of the Legal Frameworks on Regulation and Management of Incorporated Trustees in Nigeria

Introduction

The advent of various non-profit organisations in Nigeria, such as, associations with Incorporated Trustees, Companies limited by guarantee and other non-profit organisations in Nigeria, makes it necessary to regulate and manage the activities of these organisations. Incorporated Trustees conflict community of persons bound together by custom, religion, kinship, nationality, or anybody or association of persons established for any religious, educational, literary, scientific, social, cultural, development, sporting or charitable purposes.^[1]

Incorporated Trustees in Nigeria are governed by the Companies and Allied Matters Act, registrable under Part F. Although Incorporated Trustees can operate without registration, wherein the trustees of these organisations are unregistered, they cannot take advantage of the incidences of incorporation unless they are registered.^[2]

The Companies and Allied Matters Act (CAMA), 2020 (hereinafter referred to as CAMA in this work) and its empowered Institution vis-à-vis Corporate Affairs Commission (CAC) is the foundational Legal framework for the regulation and management of incorporated Trustees under part F of the Act, though, there are other laws and institutions with matters incidental to incorporated Trustees.

The Act principally is to regulate the Operation, Formation, management and Dissolution of businesses and associations. The 2020 CAMA, no doubt was greeted with lots of controversies and challenges proceeding from few innovations and changes made therein. Incorporated Trustees, most especially Religious Bodies who were afraid of possible intrusion of the government into their activities or affairs decried over these few provisions and sections, especially section 839(1) of CAMA 2020, regarding the suspension of Trustees by CAC. These, to some, violate their fundamental right to freedom of religion and association. Others stated that it was an affront to the Constitutional powers of the court to issue orders. A Series of these controversies were complaints lodged by well-meaning members of society who by one way or another, are directly or indirectly affected by the government’s regulations and management of incorporated Trustees under CAMA, 2020.

Flowing from the above and more, the regulation and management of incorporated Trustees under CAMA 2020 have posed inevitable Challenges. Consequently, this article seeks to address the challenges and controversies faced in the regulation and management of incorporated Trustees under CAMA 2020, and examines the frameworks for the regulation and management of incorporated Trustees, as well as the prospects.

THE LEGAL FRAMEWORKS FOR THE REGULATION AND MANAGEMENT OF INCORPORATED TRUSTEES IN NIGERIA.

The Constitution Federal Republic of Nigeria, 1999(as amended)

The constitution is supreme and it provisions have binding force on all authorities and persons throughout the Federal Republic of Nigeria.^[3] Thus, everything within the ambit and territory of the country is under the supreme authority of the constitution including incorporated trustees.^[4] The constitution guarantees every citizen of Nigeria, the right to any religion of choice and the freedom to form or join any association provided that such associations do not create an infraction on public policy,^[5] this is the foundational authority of incorporated trustees. The constitution also recognises the CAMA as an existing law for the regulation and management of incorporated Trustees in Nigeria^[6], this is the basis upon which CAMA draws its validity from.^[7]

Companies and Allied Matters Act, 2020.

The Companies and Allied Matters Act (CAMA), 2020, is the principal and foundational legal framework for the regulation and management of incorporated trustees in Nigeria. The regulation and management of Incorporated Trustees is covered under part F of CAMA, between sections 823 to 850. Registration of Incorporated Trustees is regulated by CAMA.^[8]Upon being so registered by the Commission, the trustees shall become a corporate body in accordance with the provisions the Act, the body automatically comes under the regulatory powers of the CAC and CAMA.^[9]

It is abundantly clear that the hue and cry of antagonists for the purposes of regulation and management of incorporated Trustees under CAMA 2020, is the provision of section 839 which provides for the suspension of Trustees of an incorporated Trustees and the appointment of interim managers. These provision has been the most controversial, due to the power given to CAC which is not unilaterally exercisable by CAC, but still subject to court powers and upon fulfilment of conditions laid down by same section.

CHALLENGES FACING THE INCORPORATED TRUSTEES IN NIGERIA.

Religion Challenges

Religion has been a dominant factor in Nigerian politics especially in this post-independence era. On August 7, 2020, President Buhari signed the Companies and Allied Matters Bill 2020 into law to regulate the activities Incorporated Trustees which encompasses religious bodies including investigating into their finances. The controversial section of CAMA 2020, was said to have authorised CAC to act or control the hem of the affairs of the Church. However, the power of suspension is not unilaterally exercisable by the CAC but also subject to court.^[10] Flowing from the above, religious challenge has been and remains a serious impediment to the government in the regulation and management of incorporated Trustees under CAMA, 2020, and if not solved will remain.

Cultural Challenges

In Nigeria, incorporated trustees are organizations formed for religious, educational, literary, scientific, social or charitable purposes. Examples of cultural incorporated association are; Ohanaeze Ndigbo, the Arewa Consultative Forum etc. These organizations are regulated and managed by the Corporate Affairs Commission (CAC) under the Companies and Allied Matters Act (CAMA). However, the regulation and management of these incorporated trustees in Nigeria faces several cultural challenges, which are multi-ethnic and multi-religious. Many incorporated trustees are formed based on religious or ethnic affiliations. This sometimes leads to religious or ethnic sentiments affecting the regulation and management of these organizations. The CAC may be seen as biased towards or against certain religions or ethnic groups, leading to distrust and suspicion. These challenges however, requires a holistic approach that takes into account the cultural and social context of Nigeria.

THE PROSPECTS OF THE REGULATION AND MANAGEMENT OF INCORPORATED TRUSTEES IN NIGERIA.

Although, lots of challenges come with the regulations and management of incorporated Trustees in Nigeria. However, there are lots of underlining benefits that comes with regulating and managing the activities of the Incorporated Trustees. The prospects include and are not limited to the following:

1. Increase in Revenue Generation.
2. Political Stability.
3. Reduction of Communal Crisis.
4. Prevention of Illegal Associations.

Recommendations

This article having examined the Legal Frameworks for the Regulation and Management of Incorporated Trustees in Nigeria, the contention as regards the regulation of incorporated trustees in Nigeria particularly as it relates to the powers of the CAC to remove a trustee of an incorporated trustee and appoint an interim manager and also the challenges facing the incorporated trustees in Nigeria and prospects. By way of addressing the challenges facing the legal frameworks for the regulations and management of incorporated trustees under CAMA, 2020, it is therefore recommended that there is need for strengthening the regulatory frameworks of incorporated trustees, enhancing governance and financial management practices and promoting transparency and accountability in the regulation and management of incorporated trustees.

CONCLUSION.

The need to regulate incorporated Trustees cannot be over emphasised. Parts of the reasons being to prevent proliferation of illegal associations. Again, some associations might as well be operational with illegal objectives, even business ventures who do not wish to be regulated by the government can still trade under the ambit of associations and still conduct their business ventures if they are not regulated and supervised by the government. The benefits that comes with regulations of associations no doubt are glaring, although a lot of challenges comes with the regulations and management of incorporated Trustees.

Keyword: Incorporated Trustees, Regulation and Management of Incorporated Trustees, Legal Frameworks of Incorporated Trustees, challenges of Incorporated Trustees.

1. Companies and Allied Matters Act, 2020. Cap C20, Laws of the Federation of Nigeria (LFN) 2004. Section 823 ↑
2. Companies and Allied Matters Act, 2020. s. 823 ↑
3. Constitution Federal Republic of Nigeria 1999(as amended 2011) section 1(1) ↑
4. Alhaji Bani Gaa Budo Nuhu v Alhaji Ishola Are Ogele (2003)18 NWLR (Pt. 852) 251 ↑
5. CFRN, 1999(as amended), s.38 (1) & 40 ↑
6. Ibid, s.315. ↑
7. Corporate Affairs Commission v The Registered Trustees of Celestial Church of Christ (2009) 11 NWLR (pt. 1151)40 ↑
8. CAMA, 2020, s. 823 – 850 ↑
9. Ibid, s. 830 ↑
10. CAMA 2020 s. 839(1) ↑