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Home » Nigeria CAMA 2020 » Section 58 Companies and Allied Matters Act 2020

Section 58 Companies and Allied Matters Act 2020

Section 58 CAMA 2020

Section 58 Companies and Allied Matters Act is about Requirements as to net assets. It is under Chapter 2 (Re-registration Of Companies) of PART B (INCORPORATION OF COMPANIES AND INCIDENTAL MATTERS) of the Act.

Requirements as to net assets

(1) A company applying to re-register as a public company shall obtain—

(a) a balance sheet prepared as at a date not more than seven months before the date on which the application is delivered to the Commission ;

(b) an unqualified report by the company’s auditor on that balance sheet ; and
(c) a written statement by the company’s auditor that, in his opinion at the balance sheet date, the amount of the company’s net assets was not less than the aggregate of its called-up share capital and undistributable reserves.

(2) Between the date of the balance sheet and the date on which the application for re- registration is delivered to the Commission, there shall be no change in the company’s financial position that results in the amount of its net assets becoming less than the aggregate of its called-up share capital
and un-distributable reserves.

(3) In subsection (1) (b), an “unqualified report” means—
(a) if the balance sheet was prepared for a financial year of the company, a report stating without material qualification the auditor’s opinion that the balance sheet has been properly prepared in accordance with the requirements of this Act ;

(b) if the balance sheet was not prepared for a financial year of the company, a report stating without material qualification the auditor’s opinion that the balance sheet has been properly prepared in accordance with the provisions of this Act which would have applied if it had been prepared
for a financial year of the company.

(4) For the purpose of an auditor’s report on a balance sheet that was not prepared for a financial year of the company, the provisions of this Act apply with such modifications as are necessary.

See also  Section 19 Companies and Allied Matters Act 2020

(5) For the purposes of subsection (3), a qualification is material unless the auditor states in his report that the matter giving rise to the qualification is not material for the purpose of determining (by reference to the company’s balance sheet) whether at the date of the balance sheet, the amount of the company’s net assets was not less than the aggregate of its called-up share capital and un-distributable reserves.

(6) In this Part—
(a) “net assets” means the aggregate of the company’s assets less the aggregate of its liabilities, and
(b) ‘‘un-distributable reserves’’ are its—
(i) share premium account, and
(ii) capital redemption reserve ;

(c) the amount by which its accumulated or unrealised profits (so far as not previously utilised by capitalisation) exceed its accumulated or unrealised losses (so far as not previously written off in a reduction or reorganisation of capital duly made) ; and
(d) any other reserve that the company is prohibited from distributing by any enactment (other than one contained in this Part) or by its articles.

(7) The reference in subsection (6) (c) to capitalisation does not include a transfer of profits of the company to its capital redemption reserve.

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