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| 13955961572 | What are the regulatory bodies for floatation of securities? | 1. Corporate affairs commission 2. The securities and exchange commission 3. The Debt Management Office 4. Central bank of Nigeria 5. Nigerian Stock Exchange | 0 | |
| 13955966631 | What are the regulatory laws that govern the flotation of securities? | 1. Companies and allied matters act 2. Investment and Securities Act 3. Securities and Exchange commission Rules 4. Debt management office act | 1 | |
| 13955974923 | What is a prospectus | Document with which the application and registration of securities are presented Document used to float securities and present them to the investing public | 2 | |
| 13955995537 | Other types of prospectus | 1. Deemed prospectus 2. Abridged prospectus 3. Statement in lieu of prospectus | 3 | |
| 13956000405 | What are issuing houses? | Present documentation for approval e.g stock broking firms, members of the Nigerian stock exchange | 4 | |
| 13956081670 | Explain these terms: Issuing house, Rights issue, Bonus issue, Capital Market Operators and Primary and Secondary Market, IPO | 1. Issuing house presents documentation for approval e.g NSE, Stock broking firms registered with SEC 2. Rights issue: when companies offer to existing shareholders securities so they can maintain the share percentage in the company 3. Bonus issue: shares given to the exiting shareholders for free 4.Capital market operators: Stock brokers and other professionals that are engaged to represent others in the capital market 5. Primary market: New issues market where the companies offer the securities to the public and the proceeds go to the company, the issuing authority 6. Secondary market; where investors (shareholders) sell and buy securities already issued in the primary market and the proceeds go to the shareholders 7. IPO - first time a company offers its shares to the public, coming into the capital market for the first time . | 5 | |
| 13956228040 | Roles and functions of the capital market | 1. Allows for borrowing of funds for long term loans 2. Provides avenue for marketing of securities and shares 3. Encourages inflow of foreign capital 4. Helps government with privatisation projects 5. Helps the growth of companies 6. Reduces over reliance on the corporate sector for funds for long term and short term projects 7. Gives opportunity to individuals to invest and participate in the corporate sector 8. Makes investors liquid 9. It registers securities of public quoted companies and public unquoted companies and collective investment schemes | 6 | |
| 13956270590 | Section 54(1) ISA Section 54(5) ISA Section 54 (6) | All securities of public companies, government and investment trust companies shall be registered bu SEC No securities can be sold without the prior registration by SEC Where securities are offered to the public without registration there is a fine of N 1million or 3 years imprisonment or both | 7 | |
| 13957295343 | Methods of offering securities to the public | 1. Direct Public Offer - Company securities are still issued through issuing house yet the company still bears the risk. The company may underwrite to protect itself from risk 2. Offer of sale - this is when the company sells the securities to an issuing house who then sells to the public. The risk is Bourne by the issuing house. 3. Placement: This is a private means of sale. It is not offered to the public at large but to institutional investors | 8 | |
| 13957396799 | Public companies and Private Placement | Requirement that public company obtain approval from SEC before it can offer securities by private placement - Rule 340(1) SEC rules | 9 | |
| 13957412164 | What are the conditions for the approval of a public company offering securities through private placement | R 340(2) 1. Company must be in dire need of fresh funds and must show the commission that private placement is the only viable option of obtaining those funds 2. The securities must not be offered to more than 50 subscribers 3. The resolution approving the placement must be special resolution and shall state the number of shares to be offered and the price 4. Publication of the notice of the general meeting authorising the placement in 2 national daily newspapers and the evidence of the publication shall be filed with the commission 5. The total number of shares that must be offered through private placement by a public quoted company shall 30% of its existing issued and paid up share capital 6. The price of the securities of the company is quoted shall be on technical suspension during the period of placement 7. The offer shall be for a period as proposed by the issuer and approved by the commission but shall not exceed 10 working days 8. All subsequent capital raising shall be approved only upon satisfactory account of utilisation of previous issue proceeds | 10 | |
| 13957607145 | How does the SEC ensure that private placement is kept private? | Rule 340(3) says that private placements shall not be advertised, mentioned and or discussed in the print and electronic media Penalty for doing so may be suspension or withdrawal of approval | 11 | |
| 13959750925 | Do private companies need to inform the SEC of private placements | No, unless the shares would eventually get into the hands of the public | 12 | |
| 13959846183 | Electronic offer and transfer of securities | S. 345 gives the company an option to opt for electronic transfer of securities as long as where an investor elects to have a certificate for his securities the company will issue him one. | 13 | |
| 13959878024 | What is the procedure for registration of a prospectus with the SEC | 1. Prepare a draft copy of the prospectus 2. Issuing house sends a copy of the prospectus to the NSE. If it is an IPO then approval of the NSE is needed, if not then a letter of exemption is given 3. Draft is given to the SEC along with application for registration who make comments and give it back to the issuing house 4. Consent of experts who made reports and statements contained in the prospectus 5. print the final copy of the prospectus and have it signed by all the directors named in it 6. Give the final printed copy to the SEC for registration and a copy to the NSE and the CAC for records 7. Publication of the prospectus and invitation to the public to invest in the securities | 14 | |
| 13959960165 | S 80. ISA | No prospectus shall be issued without first being registered with the SEC | 15 | |
| 13959978946 | What is the effect of a false statement made in the prospectus? | Civil and Criminal liability | 16 | |
| 13959858100 | What is the maximum duration of a public offer of securities | 28 working days | 17 | |
| 13960089292 | What is the civil liability for false statements made on a prospectus | s 85 (1) ISA persons who subscribe are entitled to compensation for the loss or damage that they suffer as a result of their reliance on the false statement | 18 | |
| 13960099465 | Who are the persons to bear this civil liability? | 1. Directos of the company at the time of the issue of the prospectus 2. Any person who consented to be named and is named in the prospectus as a director 3. Any employee of the company who participated in or facilitated the production of the prospectus 4. The issuing house and their principal officers S 85(3) | 19 | |
| 13960121849 | What is the criminal liability for untrue statements in prospectus | Any director or officer of the company who authorised the issue of the prospectus or any person who authorised the delivery of the statement in lieu of prospectus for registration commits and offence and is liable to a fine of 1 million Naira or 3 years imprisonment or both | 20 | |
| 14033569002 | S 18 CAMA | 2 or more people are needed to form a company | 21 | |
| 14033573703 | S 19 | (1) 2- 20 people can form an association greater than 20 need to form a company (2) Exceptions to this: Co operative societies., Law firms, accountants | 22 | |
| 14033592639 | S 20 | (1) Persons who cannot join a company: Children under the age of 18, persons of unsound mind, bankrupt people (2) A child can join in the formation of the company if 2 or more adults subscribe to the memorandum (3) a company in liquidation cannot join in the formation of a company (4) Aliens can form a company subject to provisions of any enactment regulating them | 23 | |
| 14033698718 | S 21 | 3 types of company 1. Limited By shares 2. Limited by guarantee 3. Unlimited They can either be public or private | 24 | |
| 14033711561 | s 22 | Private company limited liability company 1. Cannot invite the public to subscribe to shares or debentures 2. Cannot invite the public to deposit money for fixed periods or payable at call 2. Must state so in the memo 3. Restrict transfer of shares in its articles 4. 2- 50 members | 25 | |
| 14033758949 | 23 | Effect of default in compliance with provisions of private company company shall cease to be entitled to privileges of a private company | 26 | |
| 14033772835 | 24 | If a company is not a private company then it is a public company and it must state so in its memorandum | 27 | |
| 14033780955 | 25 | Unlimited companies 1. Must be registered with share capital | 28 | |
| 14033797745 | 26 | Companies limited by guarantee (1). Where a company is being formed for the purpose of art science religion sports culture education charity or similar objects and all income goes to the promotion of its objects with no portion going to its members (2). company limited by guarantee is not registered with share capital (3) every provision purporting to give a person the right to participate in the profits of the company is void (4) company limited by guarantee shall not be registered for the purpose of carrying on business to make profit for distribution to its members (5) Authority of the AG is needed for the registration of a company limited by guarantee (6) Penalty for distributing profits to members is liability for the payment and discharge of the debts of the company incurred as a result of carrying on such business and officers and members liable to a fine of 100 per day of carrying on such business (7) The total liability of the members of a company limited by guarantee to contribute to the assets of the company in the event of its being wound up shall not at any time be less than N10,000. (10) If, upon the winding up of a company limited by guarantee, there remains after the discharge of all its debts and liabilities any property of the company, the same shall not be distributed among the members but shall be transferred to some other company limited by guarantee having objects similar to the objects of the company or applied to some charitable object and such other company or charity shall be determined by the members prior to the dissolution of the company | 29 | |
| 14033935712 | 27 | Requirements of memorandum of association - name - registered office - objects - restrictions if any on the company - type of company - liability of members - authorised share capital - subscription box (2) Subscribers need to take on at least 25% of shares in the company (4) memorandum of association of a company limited by guarantee has to have the special clause in it And that every member guarantees in the event of winding up of the company to contribute (at least ) 10 000 to its assets | 30 | |
| 14033975593 | 29 | Ltd - private plc - public ultd - unlimited ltd/gte - limited by guarantee | 31 | |
| 14034083103 | 30 | Restricted and Prohibited Name | 32 | |
| 14034090847 | 31 | Compulsory change of name | 33 |
