COMPANIES AND ALLIED MATTERS ACT 2020 : THE ''CONTROVERSIAL" SECTION

 Dear readers, 

Growing up, I have heard people say "Knowledge is Power" but do you think knowledge not put into use is also power? Lets put into use our knowledge so it becomes power to us.

I will be discussing the Companies and Allied Matters Act 2020 assented by President Muhammad Buhari especially the "controversial" Section 839  which has received knock from Religious leaders. Section 839 subsection (1) empowers the commission to suspend trustees of an association and appoint interim managers to manage the affairs of the association where it reasonably believes that-

(a) There is or has been misconduct or mismanagement in the administration of the association.

(b) where it is necessary or desirable for the purpose of (i) protecting the property of the association, securing a proper application for the property of the association towards achieving the objects of the association, the purpose of the association of that property or the property coming to the association and most importantly to protect public interest.

The Commission wont just wake up one day to take over an association such as Church, Mosque, Non Governmental Organization or even Street Association by suspending the trustees except by a court order upon petition to the commission or members consisting of one-fifth of the association, and the petitioners shall present all reasonable evidence as requested by the court in respect of the petition .

All the above conditions are prerequisite to taking over an association by the commission.

Lastly, on the issue of payment of tax, where an incorporation under the Non Governmental Organization engage in business such business is taxable .Please find below an illustration:

ABC Chapel an NGO establish a pure water business , buys material ,water at N1,000:00 after selling to members and its immediate community makes a total of N1,800:00 such NGO has made profit of N800:00 and becomes taxable. 

One fundamental feature of an NGO is not to make profit, where it engages in profit making then it becomes taxable.

Thank you .

Cremelawyer