23rd December 2020
BURDEN OF PROOF OF INCORPORATION OF A COMPANY: IS ADDING "LTD" OR "PLC" TO THE NAME OF A COMPANY SUFFICIENT?
By the general rule of evidence, the burden of proof in a suit or proceedings is divided into two. There is a constant legal burden of proof on a Plaintiff which must be discharged to succeed in an action on the balance of probabilities. This evidentiary burden of proof of any particular fact in issue may oscillate between parties to a given proceeding.2 In civil cases, the burden of proof of any fact in issue is ostensibly on the party that asserts in the affirmative.3 Therefore, in proceedings where a defendant challenges the incorporation status of a Plaintiff-company, what is the acceptable proof of the company's incorporation? In this article, the writer examines the legal requirement for the successful proof of incorporation/registration of a company and interrogates the question whether adding the suffix "Ltd" to the name of a company is sufficient proof?
BURDEN OF PROOF
It is trite that the burden of proof lies on that person that will fail if no evidence is adduced on either side.4 The law is also settled by both statutory and case law that the evidential burden of proof of any fact in issue is generally on the party that asserts in the affirmative. This burden is not static and can validly shift from one party to the other in the same proceedings depending on who is alleging the existence or truth of a particular fact.5 Section 136 (1) Evidence Act provides: "The burden of proof of any particular fact lies on that person who wishes the court to believe in its existence unless it is provided for by any law that the proof of the fact shall lie on any particular person, but the burden in the course of a case may be shifted from one side to the other."
The Supreme Court of Nigeria in the case of IROAGBARA v. UFOMADU6 interpreted this statutory provision and held as follows:
"In civil cases, the likes of the one under consideration, on the burden of proof on the pleadings, the rule is that the burden of proof rests on the party (whether plaintiff or defendant), who substantially asserts the affirmative of the issue. When it is said that onus of proof shifts from Plaintiff to Defendant and vice versa from time to time as the case progresses, it means no more than the burden of proof may shift depending on how the scale of evidence preponderates. However, subject to the scale of evidence preponderating, the burden of proof rests squarely on the party who would fail if no evidence at all, or no more evidence as the case may be, were given on either side. However, let me quickly say that if a Plaintiff on whom always rests the onus of proving that affirmative of what he asserts, no burden shifts to the Defendant unless he has counter-claimed."
From the Iroagbara's case, it is thus clear that the legal burden of proof generally in civil cases is on the Plaintiff who is expected to discharge same on the balance of probabilities. Where however, it is the defendant that affirmatively asserts the existence of a fact, the burden of proving that fact will equally lie on him.
PROOF OF INCORPORATION OF A COMPANY
In court proceedings involving companies, there may arise a dispute as to the registration of a company. Usually, the objection raised in this manner is to challenge the capacity of the company to enter into a legally enforceable agreement or contract which can crystalize into a valid claim (in case of a dispute) before any court in Nigeria.
The Supreme Court has thus held, relying on Section 36(6) of the Companies and Allied Matters Act,7 that the conclusive manner of proving the incorporation of a company is by the production of its certificate of incorporation. In the case of NNPC v. LUTIN INVESTMENT LTD & ANOR,8 the apex court held: "... it is trite law that the only way incorporation of a company can be established in any proceeding is by tendering the certificate of its incorporation."
The pertinent question then arises as to whether the fact that a company on its writ of summons or originating process adds the suffixes "Ltd" or "Plc" to its name creates the presumption of incorporation in its favour?9 Though, it is settled law that facts admitted needs no further proof,10 when on the state of the pleadings, the objector has used the terms "Ltd" and "Managing Director" in describing the Claimant or its officers, does this amount to an admission that indeed the company is incorporated?
These were the questions the Court of Appeal, Abuja Division, was confronted with in the case of ILYAMUS TRUST NIGERIA LIMITED v. ASIPITA ZAINAB.11 The brief facts of the case are that, at the trial court parties have joined issues on the pleadings regarding the incorporation status of the Appellant company. The Appellant failed to tender its incorporation certificate at the trial court. It argued at the appellate court however, that despite not tendering the certificate of incorporation, the Respondent had admitted the incorporation status of the Appellant by using the descriptions "Managing Director" and "Ltd" in its pleadings. Rejecting this contention, the court held:
"At this point, and at the trial, the first burden/or initial onus is therefore on the Appellant to produce her certificate of incorporation to prove it's assertion that it is a registered or incorporated company. The law is settled that only the production of a Certificate of Incorporation can be used to prove the incorporation of a company... Similarly, in the case of NDUKA V. EZENWAKU (2001) 6 NWLR (PT. 709) PAGE 517 cited with approval in the case of ADAMA BEVEARGES LTD VS. GALLEON (2016) LPELR 40314 (CA) PAGE 32-34 PARAS E-B this Honourable Court held thus:- "Where the juristic status of a defendant company is put in issue, the Plaintiffs must prove that legal personality by producing the Company's certificate of incorporation... The appellant failed to prove the incorporation... I must add, in agreement with the submission of Respondent, that the addition of "Ltd" or "Plc" to the name of the firm Commerce Lords Nigeria Ltd would not necessarily mean that it had been incorporated under CAMA." Applying the above authorities to the facts leading to this appeal, I hold the view that the incorporation of the Appellant has been put in issue before the lower Court, and the Appellant having failed to produce its certificate of incorporation, has therefore failed to prove that it is a registered body capable of suing and being sued in essence, I submit with respect that effect of the failure of the Appellant to prove her juristic personality is fatal to her case... In the light of the above, I hold that the Appellant was not proved to be an incorporated body before the lower Court and as such, the learned trial Judge was in order to have held as he did that the Claimant was not a competent party before it."12
From the Ilyamus' case above, it is clear beyond any iota of doubt that the mere addition of "Ltd" or "Plc" to the name of a company would not suffice or create any presumption of registration in favour of that company. The moment the incorporation of a company is put in issue on the pleadings, nothing short of the production of the certificate of incorporation would suffice to prove the registration of the company. To hold otherwise would suggest that the hood now makes the monk.
Generally, to prove the incorporation of a foreign company in Nigeria, it will be sufficient, in the writer's view, to show that the foreign company is incorporated under the laws of the foreign state, recognized by Nigeria.13 So, if a defendant disputes the incorporation of a foreign company on the pleadings, the onus will lie on the foreign company to produce its certificate of incorporation under the laws of the foreign state. Just as it was held in NNPC v. LUTIN INVESTMENT LTD & ANOR,14 nothing short of the production of the Certificate of incorporation would be acceptable. Therefore, all things being equal, the same standard of proof that applies to a Nigerian company will equally apply to a foreign company in the circumstance.
In the writer's humble view, the Court of Appeal decision of ILYAMUS TRUST15 correctly applied the law in holding as it did that the registration of a company can only be proved by tendering the incorporation certificate in court. The use of the suffixes "Ltd" or "Plc" would not be sufficient to discharge this burden. Names or titles are irrelevant in finding whether a company is registered or not. By parity of reasoning, a popular Nigerian musician is called "Barrister", does that make him a person properly called to the Nigerian bar? When a lawyer is challenged to prove that he is licensed to practice law in Nigeria, only the production of his Call to Bar certificate would discharge the burden. The qualifying "Esq." title boldly inscribed after his last name is of no moment.
2 OKOYE & ORS v. NWANKWO (2014) LPELR 23172 (SC) per PETER-ODILI, J.S.C (pp. 25-26, paras. F-E).
3 Section 136 (1) of the Evidence Act, Cap E14 Laws of the Federation of Nigeria 2011.
4 Section 132 of the Evidence Act, Cap E14 2011.
5 GBAFE v. GBAFE (1996) 6 NWLR (Pt. 455) 417 at 432 paras D-F.
6 (2009) LPELR 1538 (SC) per ADEREMI, J.S.C (pp. 13-14, paras. E-B).
7 Cap C20 Laws of the Federation of Nigeria 2004.
8 (2006) LPELR 2024 (SC) per ONNOGHEN, J.S.C (p. 22, para. E).
9 A.C.B. PLC & ANOR v. EMONSTRADE LTD (2002) LPELR 207 (SC) per KALGO, J.S.C (pp. 17-18, paras. F-B).
10 Section 123 of the Evidence Act, 2011.
11 (2018) LPELR 46464 (CA).
12 Per IDRIS, J.C.A (pp. 19-21, paras. C-D).
13 SAEBY JERNSTOBERI MASKINFABRIC A/S v. OLAOGUN ENTERPRISES LTD. (1999) 14 NWLR (Pt. 637) 128 at 146, paras E-G.
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