NNNGO Newsletter on Understanding the Companies and Allied Matters Act – May, 2019

The new amendment to the Part F of the Companies and Allied Matters Act (CAMA) supports the suspension of an organisation’s board of trustees, in cases where there is perpetration of misconduct and fraudulent management of organisational affairs.

The suspension of trustees can only be made legal after a petition has been made to a court of law and evidences presented to the court by one-fifth of the organisation’s members. The Corporate Affairs Commission (CAC) then enforces the court’s judgment of suspension after the individuals have been found guilty.

The law states that in such cases, an interim manager could be appointed to manage the affairs of the organisation, pending when all matters are resolved. It becomes necessary to appoint an interim manager to ensure the protection of the organisation’s interest and physical properties of a nonprofit organisation. In these cases, the powers and duties of the board of trustees shall be transferred and performed by the interim manager to the exclusion of the trustees under the supervision of the CAC.

It is important to note that the law does not tolerate deliberate and unsubstantiated accusations and petitions of misconduct or fraudulent dealings by Nonprofits. Nonprofits are advised to avoid disputes and issues that can bring discord within their organisation and the wider nonprofit community at large.

To achieve the avoidance of organisational discord, it is advised that nonprofit organisations ensure that their operations and financial management activities are guided by the values of ethics and culture of transparency and accountability.

This newsletter is supported by the Commonwealth Foundation. However, the ideas and opinions presented in this document do not necessarily represent those of Commonwealth Foundation, NNNGO or any other organisations mentioned.