The businessman is a part of the community.Law exist to bind conflicting interest of groups of individual.For example, the law should give to the businessman the right to set up his own business and necessary incentives which will yield a fair return for his investments. On the other hand,The law must control the activities of the businessman to ensure that the interest of the community are not endangered.This control is justified for technical,health,safely or other reasons beneficial to the community generally. To completely the balancing process, the law must also protect the businessman from the activities of the community and protect businessmen inter se. Thus, in this process of balancing the equities, the law protect both the businessman and the community by controlling and coordinating the activities of the different groups.We shall now consider certain aspect of the law relating to the businessman and the community.
A proprietor of a business may trade in his own name or with others in the name of a firm.But more often than not,the individual businessman prefer to incorporate his business.To large extent,therefore, business enterprise today is corporate enterprise.The companies decree 1968 makes provision for the incorporation,regulation and winding up of companies. it protects the businessman by putting a corporate shell has a two-fold advantage for the businessman. it is a separate and district entity from the businessman, whose personal and private property is not liable for the debts of the company may be limited.
This concept of limited liability is also a warning to potential creditors.
The decree contains provisions for the protection of the community. One of the aims of the decree is to ensure that as much information as reasonably required shall be made available to the shareholders, the creditors of the company and to the general public. such public accountability is secured by a compulsory disclosure of the company's financial position in its account and the maintenance of various registers.
Certain document are field with the registrar of companies from whom members of the community may obtain information about the company.There are also detailed provisions regulating the duties and liabilities of directors .These ensure full publicity of the particulars of full publicity of the particulars of director and their interest in the company.
An oppressed minority may apply to the court for redress instead of bringing a petition for winding up the company. The winding up of a company serves a dual purpose. I t is a means of redress for members of the community against companies which cannot meet their liabilities or continue with their object satisfactorily. It also relives the businessman of a company which is insolvent.
There are also the safeguards for the community in the case of those who trade as partnership.The registration of the business Name Act 1961 makes registration compulsory for a firm (or an individual) having a place of business in the country and carrying on business under a business name which does not consist of the true surname of all partners (or his true surname). The mutual right and duties between the partner are generally provided for in the agreement between the parties or in the articles of partnership.Third parties cannot inspect the articles of partnership as they can a company's memorandum and articles of association.However, a partner is regarded as an agent of the firm and has unlimited liability for what is done on behalf of the firm by the other partners, unless the articles of partnership otherwise provide.
Another safeguard for the community is the prohibition by law of large partnerships.Partnership or associations consisting of more than ten persons in the case of banking and twenty persons in the case of any other business formed for the acquisition of gain must be registered under the companies Decree.
The absence of a bankruptcy law' however,present a big gap in the protection on the community.The community therefore has no sanction against the individual proprietor as it has in winding up of companies.
The Law further gives protection to the community by controlling the establishment of enterprises in certain vital areas of the economy.such enterprises must obtain licenses before commencing operations.
No banking business is to be transacted in Nigeria except by a company duly incorporated in Nigerian and which is in possession of a valid license granted by the commissioner authorizing it to do so. A bank may be granted a license if its paid-up share capital is not less than #600,000 in the case of a bank which is not directly or indirectly controlled from abroad and not less than #1,500,000 in the case of one which directly or indirectly controlled from abroad.
The Insurances Companies Act 1961 makes it necessary for insurance companies to register their business in order discourage fraudulent insurers and safeguard the interest of the insured. It also gives power to the ministry to present a petition for the winding up an Insurance company in the same way as a which is unable to pay its debts.
The Petroleum Decree 1969 in Nigerian empower the commissioner to grant oil exploration licenses, oil prospecting Licences and oil mining leases for the purposes of exploring,Prospecting or searching for petroleum respectively .Such licenses for importing,storing,selling or distributing any petroleum or petroleum products in the country.
The Nigerian Enterprises promotion Decree 1972 marks a revolutionary step in the protection of businessman inter-Se. Schedule 1 enterprises are reserved for those who can be classified as Nigerian citizens and associations. This schedule cover areas in the which the government believes that there is available sufficient domestic capital, entrepreneurship and technical know-how.Nigerian citizen and association can also engage in the schedule 2 enterprises but those who cannot be classified as such can only engaged in those enterprises upon certain conditions. The schedule 2 enterprises are in the areas where it is not possible for indigenous enterprises alone to generate rapid economic growth.
The implementation of the Nigerian Enterprises promotion Decree brought an increase in dealings in shares and in the activities of Lagos stock exchange .The need therefore arose for the protection of the interest of the community.
Stock Exchange
The company making an offer for subscription must seek permission for subscription must seek permission for the shares to be quoted on a recognized stock exchange. It must comply strictly with the current regulation of the stock exchange.Its memorandum and articles of association may have to be altered to comply with those regulations. A capital issues commission was set up with effect from 16.1973 and it replaced the capital issues committee established in 1962. A public company wishing to sell its shares to the public or to issues a prospectus inviting the public to buy shares or debentures must obtain the mirror approval of the combination as regards the pricing,the timing and amount of sale. The aspect of the decree is socialistic.It makes for a fair distribution of wealth among member of the community.
The federal government has introduced several measures to protect the national economy.These measures not only protect the businessman but the whole community as well. They consist of legislation relating to:
- Government participation in business
- financial aid to business
- Schemes for training and research, and
- The control of non-citizens.
In the field served by these corporations, government policy is to prohibit or limit participation by the private sector.The monopolistic tendency of government in these areas stems from a desire that the nation should not be held to ransom by a few member of the community. the nation should have a say in the operation of vital or essential services.The policy is to protect the community as a whole against a few individuals who may wish to operate these services.
However it is regrettable that this policy has not achieved its objectives in this regard.
The efficiency of some of these statutory corporations leaves much to be desired.We have a situation where the businessman's efficiency has exceeded the efficiency of these utilities. To take a few examples,The Nigerian Electric Power Authority cannot guarantee or supply the businessman with electricity twenty four hours a day.The Nigerian Airway cannot guarantee or do not strive to help the businessman his appointment in Benin,Kano or Maiduguri. This inefficiency results in low production and an increase in cost which eventually have to be passed on to the consumer.
The community looks to the business man for cheaper goods but the inefficiency of these public corporation increases the costs of production.Here, we see an identity of interests between the businessman and the community. I believed that these public corporations have been over-protected for too Lon. it is time to make these public corporations liable in damage for clear cases of negligence.
The federal government has also established various organization in the commercial field in competition with the private sector.These include the National Insurances Corporation of Nigerian and the Nigerian National Oil Corporation. The state government are also engaged in commercial in competition with the private sector.
The federal government has associated itself with various schemes of industrial development and several legislation have been passed to aid the businessman. The Federal loans Board is Charged with the function of Promoting Industrial development by the granting of loans to businessmen.
The Revolving Loans Fund may also provide loans for the establishment,expansion and modernization of industrial enterprise and the provision of services. The federal or a state government may aid an approved investor by participating in the project or granting loans in respect of it.
Government may also guarantee loans made to publicly held companies.
The Nigerian Bank for commerce and Industry, which is wholly owned by the federal government and the central Bank of Nigerian , provides capital and loans for medium and long terms investment to indigenous persons and bodies engaged in Industry and commence.The financing of development projects may also be undertaken by the African development bank or the Nigerian industrial development bank limited.
The Industrial development (income tax relief ) Decree 1971 encourages the establishment of commercial enterprises in Nigerian by granting relief from income tax in respect of pioneer Industries for a period of three years which may be further extended.
An application for pioneer status can only be made if the cost of the qualifying capital expenditure to be incurred by the company , on or before it commences production,is not less than #50,000 in the case of an ingenuously controlled company and #150,000 in the case of any other company.
A company may also be granted ''approved status'' which means that the company will be permitted to repatriate its capital or dividend.
The federal government may,as occasions demands prohibit the importation of certain goods or increase the importation of certain goods or increase the import duties thereon in order to protect locally produced goods A manufacturing company,under the ''approved'' user'' status may have relief from import duties in respect of certain commodities.
The federal government has initiated legislation to encourage training and manpower development in industry and commerce.The programmed of training is designed to provide adequate and skilled manpower to the industries and which will be beneficial both to the business man and the community.
The industrial training fund Decree 1971 established an industrial fund comprising of sums provided by the federal government and contribution from employers. The fund is utilized to promote and encourage the acquisition of skills in the industry or commerce with a view to generating a pool of indigenous trained manpower sufficient to meet the needs of the economy.
The cent-re for management development established under the aegies of the Nigerian council for management education and training services the industrial tanning fund in all matters concerning management development and supervisory training with a view to a joint development of policies.
A petroleum technology development fund has also been set up by the federal government for the power of training Nigerian to qualify as graduates,professionals, technicians and craftsman in the field of engineering,geology,science,and management in the petroleum industry in Nigerian or abroad.
The government's programmed of training complements very extensive schemes of researched in agriculture,industry,science, and technology.The Nigerian Researched institution Act 1964 established four research institutes in respect of cashew,cocoa,coffees and cola,oil palm,rubber etc.They undertake research into and provide information and advice relating to these products.
The Nigerian council for science and technology was established on April 1 1970 to consider and advise on all scientific activities including the application of the results of research,The transfer of technology into agriculture and industry,scientific and technical manpower, scientific re-search and technology.
This council is also to advice on suitable organizational arrangements for planning managing and co-coordinating scientific activities at various levels including the setting up of new research councils.To the end. the industrial research council of Nigeria,the agriculture researched council of Nigerian have been set up to encourage.promote and co-ordinate researches into industrial programmed of all kinds.agricultural sciences and natural science respectively.
The federal government has also regulated the entry of aliens into the country and their employment therein.Under the immigration Act of 1963,any person who is not a citizen of Nigerian and who is not desirous of talking employment (not being employment with the federal or a state government)or engaging in a business or profession requires the consent the chief federal immigration officers unless that person has been exceeded from such requirement by the commissioner for internal affairs. The employment of non-citizen is done through expatriate quota system which stipulated that a business enterprises must have a ''quota ''for each non-citizen it employs.
The Individual property legislation are all aimed at preventing unfair practices among businessmen.
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