MECHANISMS FOR ADDRESSING INSOLVENCY MATTERS IN NIGERIAN COMPANYLAW PRACTICE

Abstract

Insolvency invokes sentiments from citizens of any country. The reason is simple, it is usually not a pleasant music to the ears and souls of citizenry as it has adverse effects on both individuals and body corporates. One of the notable grounds for winding up of a company in Nigeria and elsewhere is insolvency, otherwise referred to as inability to pay debt. This paper adopts the doctrinal research methodology in this work. Primary Statutes like the Constitution of the Federal Republic of Nigeria 1999 and others like the Companies and Allied Matters Act (CAMA) 2020, Investment and Securities Act 2025 among others are utilized. Textbooks, Journals and other secondary sources will equally be relied upon. Two theories are adopted to buttress this legal research. Fiction Theory which describes a
company as a legal fiction. In company law, once a company is incorporated with the commission, it acquires separate legal personality which depicts its new nature. The second is The Legal Positivist
Theory of Law which views law as authority backed by sanction. It is well known that where a company
defaults in paying debt, insolvency sets in and can lead to winding up of such company. There are findings and recommendations in this research work which include establishment of Insolvency Tribunal to administer insolvency and related matters thereto and the need for a separate institution to administer insolvency matters other than Corporate Affairs Commission.