In one of my previous articles, i already spoke about winding up petitions as a means of recovering debt as well as bringing to a close a company on several grounds.

Winding up a company can also be deemed necessary as a means of restructuring a company by carrying out a phoenix-like regeneration of a company which might have been performing badly or seeking rebranding.

In this article, we will be taking a deeper look into winding-up of companies in Nigeria, with a deeper focus on :-

– The Regulatory Framework governing winding-up of companies in Nigeria.

– The types of winding-up processes available under Nigerian law.

– Who can have a company wound up.

What makes up the Regulatory Framework governing Winding-up of companies in Nigeria?

Winding-up of companies in Nigeria is governed by :-

– The Companies and Allied Matters Act (CAMA) 2020.

– The Corporate Affairs Commission CAC

– The Federal High Court of Nigeria through the Federal High Court Act 2005

– The Federal High Court Civil Procedure Rules 2019

-Company Regulations 2021

– The Companies Winding-up Rules

– The Companies Proceedings Rules

– The Investment and Securities Act (ISA)

Who is eligible to apply for a company to be wound-up?

The following persons can apply to have a company wound up :-

– A director of the company sought to be wound-up

– A creditor of a company sought to be wound-up

– A contributory of a company sought to be wound-up

– A Receiver of a company sought to be wound-up

– An official receiver of a company sought to be wound-up

– The Corporate Affairs Commission (CAC)

What are the grounds for winding-up a company?

The valid grounds for winding-up a company are :-

– as a debt recovery measure;

– where members of a company fall below the required number of 2(Two);

– where there’s a failure on the part of a company to hold its statutory meeting or file statutory reports as required under CAMA;

– where the court deems it just and equitable to have the company wound-up.

What are the types of winding-up processes in Nigeria?

Winding-up a company in Nigeria can be either as a :-

– Court-ordered winding-up :- This is where anyone eligible to have a company wound up makes an application to the Federal High Court via a petition followed by an affidavit of verification followed by the publication of the petition note in a national daily newspaper inviting all interested parties to enter an appearance within a period (usually 15 days ).

– A Court-supervised winding-up :- This involves a company  through its board of directors/members passing a voluntary winding-up petition and then asking the court (also through a petition)  to supervise the winding-up process, although the court in this case will have the option of appointing an additional liquidator.

–A Voluntary Winding-up which can be either :- 

a). a members voluntary winding-up :- Where members of a company commence the winding-up process through a special winding-up resolution and the appointment of a liquidator to complete the winding up process.

The appointment of a liquidator would typically render defunct the powers of the board of directors except where the contrary is decided upon by the company.

b). Or a Creditors winding-up process :- Which is where the company along with its creditors decide via separate meetings to have the company wound up, followed by the notice of the creditor’s meeting being published in at least 2 daily newspapers.

This process will also be followed by the appointment of a liquidator to complete the process.

The news reported that a 56 old woman was arrested on Sunday, the 20th of November, 2022  by the NDLEA at the Murtala Muhammad International Airport, Lagos, while she was attempting to board a Saudi Arabia flight with the intent of exporting the drugs into Saudi Arabia from Nigeria. 

Due to the age of the lady, I was forced to ask myself, “what was her motivation for engaging in drug smuggling”; is it for social status (fame) or for the money; this woman has barely a few years left in her.

There is no gainsaying that those who engage in drug trafficking do that to make quick “block” cash, but the risk associated with this drug peddling is far greater than the “perceived, conceived or imagined” profitable outcome. Some countries have passed laws promulgating death sentences on anybody that is caught trying to smuggle drugs into their country or caught in possession of drugs in that country.

A report by Harm Reduction International (HRI) which was released in March 2018 stated that as of the time of the report (2018), there were at least 33 countries of the world that have prescribed the death penalty for drug-related offenses like drug smuggling and trafficking, possession of drugs in commercial quantities, sales of drugs, etc. Countries like Malaysia, China, Cuba, Saudi Arabia, Congo, Egypt, etc made that list.

In an Asian country like China, if you are caught in possession of drugs, no matter how minute the quantity you are found with is, you will be forced to attend a government-operated drug rehab for a stipulated period of time; that is if the Chinese government want to be lenient with the offender maybe because of the age of the offender or he is a first time offender, if not, death sentence will be passed on the offender. 

Whilst in some countries, (including Nigeria) that are yet to pass capital punishment for drug peddling and related offenses, the punishment for the offense of the importation or exportation of drugs (trafficking) and sales of drugs is a life sentence.

Punishments for drug-related offenses in Nigeria have been duly provided in section 11 of the NDLEA Act; drug trafficking as an offense carries the punishment of life imprisonment while possession of drugs as an offense carries the punishment of at least 25 years jail term according to S.11(d).

Before this punishment of the death penalty or life sentence, the first punishment that is melted on the offender is that the drugs found with the peddler are first seized and confiscated by the government, and every property or money owned by the peddler that can be linked to having been gotten or acquired through proceeds made from drugs trafficking is forfeited to the government, so the offender is literally left with nothing; you lose both the drugs, your money, your properties, your freedom and in most cases even your life.

This begs the philosophical question to be asked; “placing the imagined or perceived gain (which has less than one percent chance of success) side by side with dangers and risks associated with it, can we really say that the profit outweighs the risk and the people who play this gamble with their lives are really in their right mental state”?

People that engage in drug trafficking should at least take a pause and weigh their options; consider the option of how much harm drugs has done and is still doing to the society, they should also be selfish and consider the fact that they will lose everything they have ever worked for and in most cases lose their freedom and their lives if they ever get caught.