COMPANY FOR THE ACTS OF ITS DIRECTORS

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AN APPRAISAL OF THE LIABILITIES OF A

COMPANY FOR THE ACTS OF ITS DIRECTORS

ABSTRACT

A company can be described as a legal entity or a body corporate, having perpetual succession and also a common seal, as well as the ability to sue and be sued in its own corporate name. Suffice to state, also that the company upon its incorporation can acquire property in its corporation name. This corporate personality, gives the company the status of a person; albeit artificial, having all the qualities of a normal human being.

It should be noted, that a company is by virtue of the celebrated case of Salomon V. Salomon & Co. (1897) A.C. 22, an entity separate from its members having the capacity to own assets, properties, liabilities, right and obligations incidental to the activities of the company done, giving it responsibilities for all its acts and not its members and/or officers.

The effect of this, is that the members or officers of the company are not in any way under any form of liability for acts done in course of discharging their duties but the company (a legal person) bears all such liability; even though its activities are carried out by human beings whose acts are of paramount importance to the company.

At this juncture, it would not be out of place to state with particular reference to this project work that the acts of directors as officers of the company are also accruable to the company. Be that as it may; the meaning and nature of a director is without a universally acceptable definition, neither could it lend itself an easy definition and a much easier understanding. However, directors can be defined as managers of the company. They are not employed by the company and as such cannot be said to be employees of the company, servants or members there to but they can be seen as officers of the company, for the purpose inter alia of making the company vicariously liable for their acts and omissions while engaged in the business of the company.

In essence, this project work has as its sole aim; the consideration of the liabilities of a company for the acts of its agents, with particular reference and emphasis on the director of a company and it shall also consider, the position of the law, as it relates to the above issue of liability of a director with reference to a company.

TABLE OF CONTENTS

COVER PAGE…………………………………………………………………..…….I

CERTIFICATION PAGE…………………………………………..………………II

ABSTRACT……………………………………………..……………………….…III TABLE OF CONTENTS………………………………..…………………………IV

DEDICATION………………………………………………………………..……VII

ACKNOWLEDGEMENT……………………………………..………………..VIII TABLE OF CASES…………………………………..…………………………..…XI TABLE OF STATUTES………………………………………………………..…XIII

LIST OF ABBREVIATIONS……………………………………………..…….XIV

CHAPTER 1

GENERAL INTRODUCTION

1.0.0: INTRODUCTION……………………………………………………………..1

1.1.0: BACKGROUND TO THE STUDY…………………………………………3

1.2.0: OBJECTIVES OF STUDY………………………………………..…………5

1.3.0: FOCUS OF STUDY…………………………………………..………………6

1.4.0: SCOPE OF STUDY…………………………………………………….……6

1.5.0: METHODOLOGY………………………………….…….……………………….6

1.6.0: LITERATURE REVIEW………………………………….………………..7

1.7.0: DEFINITION OF TERMS……………………………………..……………8

1. 8.0: CONCLUSION…………………………..……………………………………….14

CHAPTER 2 THE DIRECTORS OF A COMPANY

2.2.0: APPOINTMENT OF DIRECTORS 20

2.3.0: POWERS OF DIRECTORS 25

2.4.0: PROCEEDINGS OF DIRECTORS……………………….………………29

2.5.0: CONCLUSION 32

2. 0.0: INTRODUCTION………….………………………….……………………15

2. 1.0: TYPES OF DIRECTORS……………………..……………………………16

CHAPTER 3 DUTIES AND RESPONSIBILITIES OF DIRECTORS

3. 0.0: INTRODUCTION………………………………………………………….33

3.1.0: DIRECTORS AS TRUSTEES AND AGENT OF THE COMPANY…….34

3.2.0: DIRECTORS CONFLICT OF INTEREST………………………………..39

3.3.0: DIRECTORS INTEREST IN CONTRACT………………………………40

3.4.0: DIRECTORS AND SECRET PROFIT……………………………………42

3.5.0: FIDUCIARY RESPONSIBILITIES………………..………………………45

3.6.0: CONCLUSION……………………..……………………………………….46 CHAPTER 4 LIABILITIES AND REMEDIES OF DIRECTORS

4.0.0: INTRODUCTION…………………………………………………………48 4.1.0: LIABILITIES OF THE COMPANY FOR THE ACT OF ITS OFFICERS AND AGENTS…..………………………………………………………………….50

4.1.1.0: CRIMINAL LIABILITIES…………………….…………………………52

4.1.2.0: CIVIL LIABILITIES……………………….……………………………55

4.2.0: REMEDIES……………………….…………………………………………56

4.2.1.0: RELIEF FROM LIABILITY…………………………………….………62

4. 3.0: CONCLUSION……………………………………….………………………….65

CHAPTER 5 GENERAL CONCLUSION

5. 0.0: CONCLUSION…………………………………….……………………….67

5.1.0: RECOMMENDATION……………………………………………………68

BIBLIOGRAPHY……………………….…………………………………………70

ARTICLES IN JOURNALS……………………….…………….…………………70

BOOKS………………………………………………………………………………..70

DEDICATION

To God Almighty for his supremacy over my life for making all things possible and bearable.

You give me a reason to strive, take all adoration and glory.

To my parents, Mr. & Mrs. Ephraim S. Essiet; wonders of my world you guys know when to push or part. I really do love you both (equally).

To my brothers what could I have asked for? A Sister? You guys are my team.

ACKNOWLEDGEMENT

To my parents, Mr. & Mrs. Ephraim Samuel Essiet I owe you a lot. Thanks for being there all through it all.

To my brothers, Eng Nsikak-abasi Essiet, Edidiong Essiet and Ime Essiet you are all I have I love you guys!

To Pastor Victoria, mummy you are a gift and blessing to our lives. May God replenish you.

To Dr. and Dr. Mrs Olarinoye, you folks are amazing. I pray God never lets you down and may angels stay guard of the kids like you have been.

To Dr. M.M. Akanbi, wonderfully and brilliantly made thanks for sharing.

Am particularly grateful to my supervisor, Mr. M.T. Adekilekun for going through my work and being supportive time after time. You are simply the best!

To Mr. Omipidan, Mr. Ijaiya, Mr. B.L. Ijaiya, Mr. Abdulkadir, Mr. Owoade for being supportive and understanding. May God bless you all.

My deep appreciation also goes to my family, friends and all my classmates who have one way or the other contributed to supporting me. May God never let you walk alone.

TABLE OF CASES

GHANA

• Regal Hastings Ltd v. Gulliver (1942)1 ALL E.R.378;(1967)2 A.C.134

NIGERIA

• Adeniji v. The State (2001) 4 NWLR, 248

• Alexander Ward & Co v. Samyang Navigation Co (1975) 1

• Allen v. Hyatt (1914)30 TLR 444

• Artra Industries Nigeria v. The Nigeria Bank for Commerce and Industry (1998)56/57LRCN 3255

• Atwool v. Merryweather (1867)L.R.5Eq 464;37 L.T.CH.35

• Automatic Self-Cleaning Filter Syndicate Co. Ltd. v. Cunninghame (1906)2 Ch 34 or 22 T.L.R.378

• Barlett v. Barclays Bank Trust Co. No.1 &2 (1980)2 WLR 430

• Belmont Finance Corporation v. Williams Furniture Ltd (No2) (1980)1 ALL ER 393

• Bissel v. Michigan Southern RR (1942)ALL ER 378

• Boston Deep Sea Fishing and Ice Company v. Ansell (1888)39 ChD 339

• Briess v. Woolley (1954) AC 333;2WLR 832

• Canadian Aero Service v. Omally (1973)40 DLR(3d)371

• Charitable Corporation v. Sutton (1972)1 WLR 19 CA

• Delta Steel (Nigeria) Ltd v. American Computer Technology Inc (1999) 4

NWLR (Pt. 597)53 at 66

Diab Nasr v. Berini Beirut Ryad (Nig)Bank Ltd (1967)NCLR 414;(1968)1 ALL NLR 274

• Ejekam v. Devon Indusries Ltd (1998)1 NWLR(Pt.533)417

• Engineer Vassil Vassilen v. Paas Ind. Ltd (2002) FWLR PT19 418CA

• Ferguson v. Wilson (1866) L.R.2.CH.77

• Firebanks Executors v. Humphreys (1885)13 QBD 54 CA

• Foss v. Harbottle (1843)2 HARE 461

• Graham v. Allis Chambers Manufacturing Co. (1963)41 Del ch.78

• Grant v. United Kingdom Switch Back Railway (1888)40 Ch.D 135 5 TLR 92

• Halcomm (Western Nig) Ltd &Ors v. Scavuzzo &another (1974)3 ALR Comm.73;

• Irvine v. Union Bank of Australia(1877)2 App Cas 366;37 L.T. 176

• Isle of Wight Railway Company v. Tahourdin (1883)25 Cd D 320

• James v. Mid motors (1978)11&12 S.C.31

• Joseph Asaboro Ltd v. Western Nigerian Finance Corporation (1974) NCLR 266

• Kalu Onwuka v. Taymani (1965) LLR 62

• Kurubo v. Zach-Motison (Nigeria)Ltd(1992)5NWLR(Pt.239)102 @ 115

• Lenard’s Carrying Company Ltd. v. Asiatic Petroleum Co Ltd (1915) A.C.705

• Lincoln Mills v. Gough VR 193

Longe v. First Bank of Nigeria Plc (2006)3 NWLR (Pt.976)228@ 261-262

Mandilas and Karaberis Ltd. v. Commissioner of police (1956)WNLR 147

Marquis v. Edmatie (1950)19 NLR 75 at 77

Mills v. Mills (1938)60 CLR 150

• Milintock v.Campbell (1919)SC 960 @980

• New Zealand Society v. Kuys (1973)WLR 1127

• Okeowo v. Migliore (1979)11 SC 138

• Pavlides v. Jensen (1956)Ch 565

• Phibbs v. Boardman (1957)2AC 46

• Perceival v. Wright (1902)2 CH 421:18 TLR 697

• Piercy v. S.Mills Co Ltd (192o)Ch.77

• R v. ICR Haulage Ltd (1944)KB 551

• Re-Ambiose Lake Tin Co. (1880)11 CHD 390

• Re-German Co. Expchipandale (1858)DL.G.M8C.19

• Selangor United Rubber Estate v. Craddocks 3(1967)1 WLR 1555

• Sheffield &South Yorkshire permanent building society v. Aizelewood (1889)2 AC 134n (H.L)

• Smith v. Anderson (1880)15 ch D 247-275CA

• Stephens v. T Pittas Ltd (1983)STC 376

• Taiwo Okeowo &Ors v. Migliore &Ors (1979) 11 SC 138

Taupo totora Timber Co v Rowe (1977) All ER 123

Tika-tore press Ltd. v. Ajibade Abina(1973)1 ALL NLR Pt.1 Pg.401

The Marquis of Butes case Re-Cardiff Saving Bank (1892)2 CH 100

Transvaal land Co v. New Beligum (transvaal) Land and Development(1914)2 ch 488 CA

• Trenco Co (Nigeria) Ltd v. African Real Estate Ltd (1978) 1 LRN 146

• Vanni v. Niger Pak Ltd (1979) 4-6 CCHCJ. 148

• Yalaju-Amaye v. AREC Ltd (1992)4 NWLR(PT.145)422 SC

UNITED KINGDOM

• Aberdeen Railway Company v. BlaikeBros. (1854) IMACQ(H.L) 461

• Bolton(Engineering)Co. Ltd. v. Graham and Sons (1957)1 QB 159

• British Syphon Co. v. Home wood (1956)2 AER 897

• Cook v. Deeks (1916)1 AC 554PC;114LT636

• Directors of Public Prosecutions v. Kent & Sussex Contractors Ltd. (1944)

K.B.146

• Elkington&Co v. Hurter (1892)2 CH 452

• Lloyds v. Grace, Smith and Co (1912) AC 716 HL

• Re City Equitable Fire Insurance Company (1925)Ch 407 @426;133L.T.520

• Re El Sombrero Ltd, (1958)Ch.910

• Re-Forest of Dean Coal Mining Company (1878)10 Ch 450

Re-Metropolitan Public carriage and Repository Co. (1873)9 Ch App. 1021

Reprinting, Telegraph & Construction company (1894)2 Ch 392

Royal British Bank v. Turquand (1856)6 E&B 327

Shaw (1935)2 K.B 113

• Tesco Supermarket Ltd v. Nattrass (1971)2 ALL E.R.127

TABLE OF STATUTES

ENGLAND

• English Companies Act 1948

NIGERIA

• Companies and Allied Matters Act 1990

• Companies and Allied Matters Act 2004

• Nigerian Company Decree 1968

LIST OF ABBREVIATIONS

• A.2d: Atlantic Report, Second Series

• A.C: Appeal Cases

• All ER: All England Reports

• All NLR: All Nigerian Law Reports

• A.L.R COMM: African Law Reports, Commercial

• BEAV: Bevan‟s English Rolls Court Report

• Cap: Chapter

• C.A: Court of Appeal

• CH.A: Chancery Appeal Cases

• Ch.D: Chancery Division

• C.P.D: Law Reports, Common Pleas Division

• D.L.R: Dominion Law Report

• E&B: Ellis and Blackburn‟s Q.B Reports(1852-8)

• EQ: Equity

• E.R: English Report

• Ex. D: Exchequer Division

• FWLR: Federation Weekly Law Reports

• H.L: House of Lords

• H&M: Hay and Marriot

• HARE: Harris English Vice Chancellor Report

• Ibid: In the same place, book or source

• JCA: Justice of the Court of Appeal

• JSC: Justice of the Supreme Court

• K.B: Kings Bench

• LFN: Laws of Federation of Nigeria

• L.R: Law Reports of the House of Lords

• L.L.R: Law Reports of the High Court of Lagos State

• LT: Law Times

• LQR: Law Quarterly Report

• NMLR: Nigerian Monthly Law Report

• NWLR: Nigerian Weekly Law Report

• Ors: Others

• P: Page

• Para: Paragraph

• P.C: Privy Council

• Per: Through, According to

• Q.B: Queen Bench

• R.P.C: Ridgeway‟s Parliament Cases

• S.C: Selected judgments of the Supreme Court of Nigeria

• SCR: South Caroline Report

• T.L.R: Times Law Report

• W.A.C.A: West African Court of Appeal

• W.L.R: Weekly Law Report

• W.R.N.L.R: Western Region of Nigeria Law Reports

• V : Versus, Between

• Vol.: Volume

CHAPTER ONE

GENERAL INTRODUCTION

1.0.0 INTRODUCTION

The need to keep pace with the realities of commerce and industry and comply with the stipulations of the law may result in the carrying out of commercial activities or business ventures by more than one person. This, when done in the main with a view to profitability, which naturally results from the pulling together of resources; money or money‟s worth by investors, the creation of an entity, a vehicle called the company is underscored.

Although one person can profitably carry on business alone, it is however not guaranteed that the business would long continue especially if he becomes incapacitated or dies . The threat to the continuity of even the most viable business in an economy as a result of death, inability to raise necessary funds, incapacity of mind or other frailties of the sole proprietor recommend the incorporation of a company which ensures ownership and participation in the management of the business by more than one person for mention. The reasons for the preference of a company to other forms of business organizations hinge extensively on the fact that a company is an artificial person recognized by law. It is within the limits of law detached from those hinge extensively on the fact that a company is an artificial person recognized by law. It has its duties, rights and obligations, which it attends to, through the instrumentality of natural persons. To this end, the law recognizes any company formed in accordance with the law of the land.

Furthermore, it is essential to note that when a Director acts as an agent on behalf of a company, he is, like any other agent, not personally liable on the contract. This is an application of the general principle of agency. On the whole a company can only be liable for the acts of its Directors when he has duly acted on behalf of the company even if the company‟s failure to carry-out the contract is due to the fault of the Directors. The Directors may be liable personally where he contracts in such a way as to assume liability

The Companies and Allied Matters Act has commendable provisions on how accounts of the company are to be controlled as well as how Directors who manage the affairs could be controlled. Furthermore, liability and penalty have become enshrined statutorily as a means of checking erring directors and officers of a company.

Therefore, this long essay will address the liabilities of a company for the acts of its directors especially on issues relating to the Directors, in carrying out his duties and responsibilities as a company Director.

1.1.0: BACKGROUND TO THE STUDY

A company, being a corporate entity, can sue and be sued in its corporate name. As a matter of law, it has separate existence, identity from the brains, minds, and hands operating it to commercial functionality. The law therefore draws a clear cleavage between the company as the artificial person and the natural persons with life and limb who can operate it.

This is because a company, being an artificial person, can only act through its human agents and officers. This position was adopted in Lennnard’s Carrying Co v. Asiastic Petroleum Co Ltd by Lord Viscount Haldane in a passage quoted with approval by Aniagolu, J.S.C in Trenco (Nigeria) Ltd. v. African Real Estate Ltd where he said, inter alia „…a corporation is an abstraction.it has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody for some purpose may be called an agent but who really is the directing mind and will of the corporation, the very ego and center of the personality of the corporation…‟

In Bolton (engineering) Co Ltd v. Graham and sons , Denning, LJ characterized the position as follows

A company may in many ways be likened to a human body.it has a brain and nerve center which controls what it does.it also has hands which hold the tools and act in accordance with directions from the center. Some of the people in the company are mere servants and agents who are nothing more than hands to the work and cannot be said to represent the directing mind and will of the company, and control what it does

in Delta Steel (Nigeria) Ltd v. American Computer Technology Inc, Aderemi,JCA, referring to acts imputed to the company, explained as follows „In cases where the law requires the personal acts or faults of an individual so as to make a legal fiction like a company to be liable, the directors, the manager or the managing director are, in the eyes of the law, the directing mind and the will of the company; they control what the company does; the state of mind of this special class of employees is the state of mind of the company‟.

Also clear distinctions between company as the artificial person and the natural person are mentioned in the case of Adeniji v. The State and also in James v. Mid motors ,

1.2.0 OBJECTIVES OF THE STUDY

The objectives of this essay is to extensively discuss the duty and study the position of the law as stated in the Companies Allied Matters Acts,2004 on the powers and the proceedings of Directors and their personal liabilities. The duties and responsibilities of directors etc, would be discussed, with a view to letting the directors know the extent to which the company can be liable.

This project work would also aim at ensuring that the company is liable for the acts of its directors during the operation of carrying out duties. Furthermore, it is also aims at ensuring the position of CAMA, 2004 as it relates to when the company would be liable for the acts of its Director and why?

1.3.0: FOCUS OF THE STUDY

This long essay will focus very importantly on the liabilities of a company for the acts of its officers and agents for acting on its behalf, and also instances when the company will not be liable for such acts of its agents and officers.

1.4.0: SCOPE OF THE STUDY

The long essay will give account of the origin of company law, definition of a company, types, formation and the sources of powers of a company. Reference will also be made to the study of directors of a company, their types, appointment, powers, proceedings as well as their liabilities. Not leaving out the main purpose of the study which is the liabilities of a company on the acts of its directors (both civil and criminal liabilities).

1.5.0: METHODOLOGY

This write up, which has its motivation mostly from lectures delivered by my lecturer on company law as well as the personal interest of the writer, It will be based on primary and secondary sources. The primary source will include the Companies And

Allied Matters Act Cap 20 LFN 2004.The secondary source which would include lecture notes, journals and relevant law reports on the subject matter and issues to be addressed in the course of completing the project work.

1.6.0: LITERATURE REVIEW

The essence and needfulness of the project work is to examine the liabilities of a company for the acts of its directors. It should be noted that various views of various authors such as E.O.Akanki, J.Olakunle Orojo, Robert.R.Pennington etc. will be put into consideration amongst many others.

According to E.O.Akanki on Essays on Company Law, he is of the view that the law regulating the liability of the company for the acts of the various organs of the company and the agents and the officers of such company is divided into two

(a) The acts of the primary organ of the company i.e. The general meeting and the board of directors which are regarded as the acts of the company itself, and

(b) Those acts of its agent and officers, duly authorized, in respect of which the company is liable on the basis of respondent superior.

Also, J.Olakunle Orojo ; is of the view that when a director contracts as agent on behalf of the company, like any other agent, he is not personally liable on the contract. This is the application of the general principle of agency. So also under those principles, the director may be personally liable where he contracts in such a manner as to assume personal liability. Where the director expressly makes himself liable, no difficulty arises, but he may be liable without express assumption of liability as where he contracts in his own name without disclosing that he is acting for a principal, in which case, he is personally liable to third parties on the contract as in the case of Elkington and Co v. Hunter9.

Even where he contracts as a director but without using words that bind the company, he will be personally liable.

Furthermore, Pennington’s Company Law by Robert.R.Pennington10 is of the

view that the company will be liable for the acts of its agents and officers if their acts are in utmost good faith i.e. in the benefit of the company and not in the officer‟s interest then the liability will be that of the company‟s.

1.7.0: DEFINITION OF TERMS

Considering the fact that the main focus of this essay is company law; it is trite at this

time to define the following viz. company, liability, director, act etc.

Pg 247

9 [1892]2 Ch.452

10 Quoting with approval Pennington‟s ‘Company law’ (7th Ed,Butterworths,London,1995). Pg.247

The word “Company” is generally used to refer to a body or an association of persons with distinct legal personality. Sometimes, however, it is used to refer to a body without legal personality such as a partnership.

Therefore, Lord Justice James defines a Company as an association of persons formed for a common object.

Lord Lindley in his own contribution defines a company as a voluntary association or an organization of many persons who contribute money or money‟s worth to a common stock and employ it in some trade or business and who shares profit or loss arising therefrom.

Felix C. Amadi defines company as a business entity with clear objects made up of a body or association of persons who contribute to the capital of the business with a view to, generally speaking, making profit or in rare cases, where they so choose, pursuing only the promotion of the objects but in whichever case sharing in the loss of the organization.

Learners Dictionary12 simply defines a company as “A number of persons united for business or commerce whose partners are not named in the title”.

Black’s Law Dictionary further puts it as a „Joint stock union or association of persons for carrying on a commercial or industrial enterprise, a partner‟s corporation, association or company‟.

Company according to L.C.B.Gower13 implies an association of a number of people for some common objects the number need not be more than two and the interest of one need not be more than nominal as in the so called one man company.

Liability can be described according to the Osborn’s Concise Law Dictionary14

defines liability as subjection to a legal obligation; or the obligation itself. The person who commits a wrong or breaks a contract or trust is said to be liable or responsible for it. Liability is civil or criminal according to whether it is enforced by the civil or criminal courts.

The term director does not have a precise and accurate definition owing to complexities of legal definitions. However, owing to various definitions given to a

12 6th Ed. Pg.226.(2000)

13 “Gower ‘Principles Of Modern Company Law’ 6th Ed.

14 9th London Sweet &Maxwell 2001

director, it becomes therefore pertinent to examine this term under three heads, broadly grouped thus by the courts, by statutes and the legal writers.

CHARLSWORTH AND CAIN states that since a company has no physical but

only a legal existence, it becomes imperative to entrust the management of its affairs to human instrument who are called “directors”, whose exact position in relation to the company is rather hard to define. Furthermore, they asserted that directors are not servants of the company, but that they are rather managers who in some certain circumstances may be said to be in a position of quasi trustees and agent of the company. To buttress this point Lord Johnstone’s dictum was cited in Milintock v. Campbell where he stated that, “the directors‟ functions are in one vein those of an agent and in another, those of a trustee” but the former predominates over the latter.

Vincent Power and Smith hold the view that a director, as the name implies, is one who directs. Although, they used short Oxford dictionary as basis of their definition offered therein is a member of a board appointed to direct the affairs of a commercial corporation.

Blackburn defined director as a person appointed, elected according to law. Authorized to manage and direct the affairs of a corporation or company.

On the other hand Orojo defined directors simply as those who direct the affairs of the company.

Almost all the case law definitions of director tends to say the same thing put in different ways, but the following dicta embrace almost all the principles to be derived from others:

Lord Cranworth L.C. in Aberdeen Railway Company v. Blaike Bros. stated thus, the directors are a body to whom is delegated the duty of managing the general affairs of the company. However, the most instructive definition of director is one offered by Sir Jessel M.R. in Re Forest of Dean Coal Mining Company thus Directors have sometimes been called trustees or commercial trustees and sometimes they have been called managing partners. It does not matter what you call them so long as you understand what their true position is, that they are commercial men managing a trade for the benefit of themselves and all other shareholders of the company.

According to the Osborn’s Concise Law Dictionary21, a director is a person charged with the management of a company‟s money and property, and having fiduciary

position.

Statutory definition on the other hand tends to adopt the same approach in dealing with the above questions Section 650 of the Act defines „Director‟ as including „Any person occupying the position of the director by whatever name called.‟

Section 244(1) provides that „Directors of a company registered under the Act are persons duly appointed by this company to direct and manage the business of the company‟ . Where a person is not duly appointed a director as such, his acts do not bind the company. But where the company describes a person as a director, there is in favor of any dealing with the company, a rebuttable presumption that all persons, who are described as directors, whether as sales, executive or otherwise, have been duly appointed

A conglomeration of all the above definitions shows that the directors maintain quite a unique and enviable position in the company and are to be regarded as the framework within which the company stands. Company directors are in a privileged position within the companies, the reasons being that they have numerous and wide powers of management of the companies.

1.8.0: CONCLUSION

The law recognizes that although a company is a living person, it has no natural body or organs, thus, an artificial person. As an artificial person, a company can only act through the instrumentality of human beings who constitute the organs, officers and agents of the company. In Trenco (Nigeria) Ltd v. African Real Estate Ltd , The

Supreme Court recognized this position by observing „…a company, although having a corporate personality is deemed to have human personality through its officers and

agents.‟

It is no doubt therefore, that for the company to carry out its activities, it needs a living person to act on its behalf. The acts of such persons during the operation of carry out its functions or duties, where liability comes to play such company would be liable for the act as if he carried out the act himself. As long as the person i.e. director can prove the act was done in the process of carry out his duty.

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