Disqualification Criteria for Directors under the Companies and Allied Matters Act 2020: AnAbsurd Addendum

Abstract

Regulating company directors is important towards achieving good corporate governance indices. The
Companies and Allied Matters Act 2020 (CAMA) was enacted in part to improve accountability in the
management of companies. Although a significant portion of the earlier 1990 law of the same name was
retained, the new legislation nonetheless made notable changes with respect to many aspects of
company law, including those relating to the qualification of directors, with which this paper is
concerned. The Business Facilitation (Miscellaneous Provisions) Act 2022 (BFA) coming after it,
further made significant amendments to the new CAMA. While both laws have not been in force long
enough for any significant judicial analysis of their provisions, a superficial reading of section 283(c)
CAMA, which introduced an addendum to the previously known list of disqualifying criteria for
directors, so that directors removed by the company under section 288 CAMA, are now also disqualified,
suggests absurd conclusions and thus, raises certain questions which warrant careful study. While
employing the medium of doctrinal analysis, involving primary and secondary literature, this paper
examined this new addendum relating to the disqualification of directors, with the aim of determining
its limits and potential, and further providing insights that could inform future improvements to the law.
The paper found that the said section 283(c), in spite of its amendment by the BFA, leaves the law open
to absurd interpretations and, on that note, must be amended to limit the disqualification on reasonable
terms, and further provide for a register of disqualification for directors.