A foreign company has been defined by section 567(1) of the Companies and Allied Matters Act, 1990 (CAMA) as a company incorporated elsewhere than in Nigeria. This means that although a company may have been incorporated, once it was not incorporated in Nigeria, such a company will be referred to as a foreign company. Generally, for a foreign company to carry out business in Nigeria, such a company must be registered in Nigeria just like any other Nigerian company. There are, however, exceptions to this general rule as contained in section 56(1)(a)-(d) CAMA.
By section 54, subject to sections 56 to 59 of the Act, a foreign company with the intention of carrying on business in Nigeria shall take all necessary steps to obtain incorporation as a separate entity in Nigeria for that purpose. Until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company. It shall also not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Act. By this provision, a foreign company not registered in Nigeria cannot enjoy any of the privileges of incorporation, neither can it have an address in the country for business or for the service of documents or processes except such documents or processes necessary for incorporation. This provision does not, however, affect the right of a foreign company to sue or be sued in Nigerian courts. The Supreme Court has held that it is not every corporate body that comes before the court that must be registered under the Nigerian law (BANK OF BARODA v. IYALABANI CO. LTD. (2002) 13 NWLR (Pt. 948) 551 @ 588 ). This is an accepted principle of common law, which states that a foreign corporation may sue or be sued in our courts. See also EIIA v. CIE LTD. (2006) 4 NWLR (Pt. 969) 114 @ Pg. 125.
What then amounts to "carrying on business" under the Act? Although the Act did not define the expression, recourse may be had to secondary sources of the law. In the case of SMITH v ANDERSON (1880) 15 Ch. 247, Brett, LJ observed:
the expression "carrying on business" implies a repetition of acts and excludes the case of an association formed for doing one particular act which is never to be repeated...
Also, in RITZ PUMPERFABRIK GMBH & CO AG v TECHNO CONTINENTAL ENGINEERS & ANOR. (1999) 4 NWLR(Pt. 598) 298, Muntaka-Coomasie, JCA quoted page 194 of the 5th Edition of Black's Law Dictionary which defines "carrying on business" as "to conduct, prosecute or continue a particular vocation or business as a continuous operation or permanent occupation. The repetition of acts may be sufficient." From the foregoing, it is safe to say that for a foreign company not registered in Nigeria to be "carrying on business" in Nigeria, it must be shown that it is performing some business activities in Nigeria on a continuous basis as a single act will not ordinarily amount to "carrying on business".
The relation the company has with the business activity must also be taken into consideration. Where a foreign company, in conjunction with a Nigerian company, engages in business activities, such a foreign company has to be registered. Where, however, the foreign company together with a Nigerian company incorporates a new company under our laws for business purposes, such a foreign company cannot be said to be in contravention of the provisions of CAMA as it is the newly incorporated company that is carrying on the business.
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