Regulation of Merger of Associations in Nigeria

Abstract

A notable provision in the Companies and Allied Matters Act (CAMA) 2020 is the merger of associations. Section 849 provides that 'Two or more associations with similar aims and objects may merge under terms and conditions as the Commission may prescribe by regulation.' This novel provision sets the wheels in motion for the merger of associations under Nigerian law. Curiously, the procedure for merger of associations pursuant to section 849 appears not to cut the mustard, as it is particularly silent on certain key issues such as the content of the scheme of merger, treatment of liabilities, and rights of dissenting members; these issues being features of mergers of companies. The paper examines the procedure for merger of associations under the CAMA 2020, comparing same with the procedures for similar mergers in the UK and South Africa respectively. The paper, among other things, recommends that the procedure for merger of associations in Nigeria be modified to address the essential elements which it omitted so as to promote due diligence and best practices, ensure fairness of the scheme of merger, and hold trustees liable for their actions.