The Nigerian Companies and Allied Matters Act, 1990 had not been significantly changed for thirty years, until President Buhari assented to the Companies and Allied Matters Act, 2020 on 7 August 2020. The much needed developments aim to address the rapidly transforming corporate landscape in Nigeria.
Company and business name disputes in Africa are not novel. These disputes arise primarily due to the register of trade marks not being reconciled with the register of companies, when corporate names are assessed and accepted. Fortunately, apart from High Court proceedings, there are mechanisms in place to address infringing corporate names.
Whilst the Companies and Allied Matters Act, 1990 did stipulate that a company name would be deemed undesirable if "in the opinion of the Commission would violate any existing trade mark or business name registered in Nigeria...", no provision was made for the protection of well-known unregistered trade marks or user rights in the context of conflicting corporate or business names. In this regard, application was made to the Registrar of the Corporate Affairs Commission, where the results were unpredictable and often unhelpful.
However, the newly established Administrative Proceedings Committee will now adjudicate over corporate name disputes. The grounds of objection to a company name have now been expanded to make provision for company name objections based on the goodwill of the Applicant. This proves to be a valuable auxiliary avenue for Applicants who have not secured trade mark protection in Nigeria. Section 852(1)(d) provides that an Applicant can object to a corporate name on the basis that it is:
“(a) the same as a name associated with the applicant in which he has goodwill; or
(b) sufficiently similar to such a name that its use in Nigeria would be likely to mislead by suggesting a connection between the company, limited liability partnership, limited partnership, business name or incorporated trustee and the applicant."
The most notable change relates to the powers of the Administrative Proceedings Committee. Section 851(4)(c) directs that the Administrative Proceedings Committee shall "impose administrative penalties for contravention of the provisions of this Act..." Further, Section 851 (10) details the sanctions which may be imposed by the Administrative Proceedings Committee and includes, inter alia, the suspension or revocation of a company's registration.
Previously, if the infringing company did not comply with the order of the Registrar, the successful Applicant would have to incur further costs by approaching the High Court for further relief. In the event that the infringing company still failed to change its name, the order made by the Registrar is, ultimately, of no effect in that the company will simply continue to exist on the companies' register under its offending name, to the detriment of the earlier rightsholder. The Registrar had no authority to remove the company from the register. Of course, this leads to an untenable situation.
Section 851 (10) now opens the door for infringing corporate names to be revoked from the register of companies, which should offer an effective remedy to trade mark proprietors.
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