Understanding Your Organization's Constitution and Why Revision is Necessary

Greetings from BusinessHelp CONSULT! As a registered organization with the Corporate Affairs Commission (CAC) in Nigeria, whether you are a company, an association, a church, or a non-governmental organization (NGO), your constitution (often called Memorandum and Articles of Association for companies, or simply Constitution for Incorporated Trustees) is your foundational legal document. It's like the rulebook that guides everything your organization does, from its objectives and governance structure to membership rights and financial management.

Over time, organizations evolve. What was relevant five or ten years ago might not fully capture your current mission, operational realities, or even comply with new legal requirements. This is where the need for a 'Revised Constitution' comes in. A revised constitution updates your organization's internal laws to reflect its present state and future aspirations.

Common Reasons Why Organizations Revise Their Constitution:

  • Change in Objectives or Mission: As your organization grows, its focus might shift, requiring an update to its stated aims and objectives.
  • Update in Governance Structure: You might need to change the number of Trustees/Directors, redefine their roles, or alter the process for their appointment and removal.
  • Compliance with New Laws: The Companies and Allied Matters Act (CAMA) 2020 introduced significant changes. Your old constitution might need to be updated to align with these new legal provisions.
  • Membership Criteria Changes: Your organization might decide to expand or narrow its membership base, or change the rights and responsibilities of members.
  • Relocation of Registered Office: While often a separate filing, sometimes a change of address might trigger other constitutional amendments.
  • Correction of Errors: Original constitutions might contain typographical errors, ambiguities, or clauses that are difficult to interpret.
  • Financial Provisions: Changes in how funds are raised, managed, or audited might necessitate amendments.
  • Dissolution Procedures: Updating how the organization would be wound up, and how its assets would be distributed, is also a common amendment.

Preparing a 'clean' revised constitution for CAC submission means ensuring it is well-drafted, accurate, legally compliant, and properly supported by all necessary internal approvals. A messy or incomplete submission can lead to delays, queries from CAC, and unnecessary costs.

For organizations registered under Part C of CAMA (Incorporated Trustees, such as NGOs, churches, mosques, clubs, associations), the process of amending your constitution is specifically governed by the Companies and Allied Matters Act (CAMA) 2020. The CAC is the regulatory body responsible for overseeing these amendments.

It is crucial to understand that any amendment to your constitution is a serious legal matter. It cannot be done whimsically. It requires strict adherence to both your existing constitution's amendment procedures and the requirements of CAMA 2020, as enforced by the CAC.

Step-by-Step Guide to Preparing Your Revised Constitution for CAC Submission

This section provides a detailed, practical guide to help you navigate the process of revising your constitution and getting it approved by the CAC.

Step 1: Internal Review and Decision Making

Before you even think about drafting, the decision to revise your constitution must come from within your organization, following due process.

  1. Convene a Board/Trustees' Meeting:

    The first step is usually for the Board of Trustees (or equivalent governing body) to meet and discuss the proposed amendments. This meeting should:

    • Identify the specific clauses that need amendment.
    • Discuss the rationale behind each proposed change.
    • Appoint a committee or an individual (often with legal expertise) to draft the initial proposed revisions.
    • Set a date for a general meeting where these proposed changes will be put to a vote.

  2. Call for an Extraordinary General Meeting (EGM) or Annual General Meeting (AGM):

    Most constitutions require that significant changes, especially to the constitution itself, be approved by a special resolution of the general membership or a higher percentage of the Trustees. You will need to:

    • Issue a formal notice of the meeting, clearly stating the purpose of the meeting (i.e., to consider and approve amendments to the constitution).
    • Ensure the notice period complies with your existing constitution (e.g., 21 days' notice).
    • Circulate the proposed revised constitution (or at least the specific proposed amendments) to all eligible members/trustees before the meeting, allowing them time to review.

  3. Pass a Special Resolution:

    At the EGM/AGM, the proposed amendments must be put to a vote. For constitutional amendments, CAMA typically requires a 'Special Resolution,' which means at least three-quarters (75%) of the members present and voting must approve the changes. Ensure you:

    • Properly record the voting process.
    • Document the exact wording of the resolution passed.

  4. Document Meeting Minutes:

    Detailed minutes of both the Board/Trustees' meeting and the EGM/AGM are crucial. These minutes must clearly show:

    • Date, time, and venue of the meeting.
    • List of attendees (with signatures).
    • The agenda discussed.
    • The specific resolutions passed regarding the constitutional amendments.
    • The voting results (especially for the special resolution).
    • The names and signatures of the Chairman and Secretary of the meeting.

Step 2: Drafting the Revised Constitution

This is where the actual legal text is prepared. It's highly recommended to engage a legal professional (a lawyer or a corporate consultant like BusinessHelp CONSULT) for this stage to ensure compliance and avoid future issues.

  1. Review the Existing Constitution:

    Go through your current constitution clause by clause. Identify which sections need to be deleted, modified, or added.

  2. Draft the Amendments:

    Carefully draft the new clauses or modified wordings. Ensure clarity, precision, and avoid ambiguity. Every change should serve a clear purpose.

  3. Ensure Consistency and Clarity:

    The revised constitution must be consistent internally. For example, if you change the number of trustees in one section, ensure all other sections referencing trustees reflect this new number. The language should be simple, direct, and easy to understand.

  4. Compare Old vs. New Clauses:

    It is good practice to create two versions of the revised constitution:

    • Track Changes Version: This clearly shows all deletions, additions, and modifications from the original document. This helps the CAC easily identify the changes.
    • Clean Version: This is the final, polished document without any track changes marks, representing the new, approved constitution.

  5. Incorporate CAMA 2020 Provisions:

    Ensure that the revised constitution is fully compliant with the latest provisions of CAMA 2020, especially regarding Incorporated Trustees. This might include provisions on financial reporting, meetings, and trustee duties.

Step 3: Formatting and Presentation

A professionally presented document speaks volumes about your organization's seriousness and attention to detail.

  • Professional Appearance: Use a clear, readable font (e.g., Times New Roman, Arial) and appropriate font size (11 or 12).
  • Clear Headings and Subheadings: Organize the constitution with logical headings and subheadings (e.g., 'Name and Address', 'Objects', 'Membership', 'Trustees', 'Meetings', 'Financial Provisions', 'Dissolution').
  • Numbering of Clauses: Ensure all clauses are sequentially numbered for easy reference. Sub-clauses should also be clearly identified (e.g., 1.1, 1.2, 2.1a, 2.1b).
  • Cover Page: Include a clear cover page stating the full name of the organization and indicating that it is a 'Revised Constitution' and the effective date.
  • Table of Contents: A table of contents at the beginning makes the document easy to navigate.

Step 4: Required Supporting Documents for CAC Submission

Once the revised constitution is drafted and internally approved, you need to gather all the necessary documents for submission to the CAC. Missing even one document can cause significant delays.

  1. Application Letter:

    A formal letter addressed to the Registrar-General, Corporate Affairs Commission, stating your intention to amend the constitution and listing the attached documents.

  2. Original Constitution:

    A copy of your organization's previously approved constitution.

  3. Revised Constitution (Two Versions):

    • The 'Track Changes' version, clearly showing all amendments.
    • The 'Clean' version, which is the final, approved document.

  4. Minutes of Meetings:

    Certified True Copies (CTC) of the minutes of the Board/Trustees' meeting and the EGM/AGM where the amendments were discussed and approved. These must be signed by the Chairman and Secretary of the meetings.

  5. Special Resolution:

    A CTC of the Special Resolution passed by the members/trustees approving the amendments. This should be a separate document from the minutes, though it will be referenced in the minutes.

  6. Trustees' Declaration (if applicable):

    If there are changes to the Trustees (new appointments or removals) as part of the constitutional amendment, relevant CAC forms (e.g., CAC/IT.10 for change of trustees) and declarations might be required.

  7. Evidence of Public Notice (if required):

    For some types of amendments (e.g., change of name, change of objects), CAMA requires a public notice in two national newspapers. If this applies to your amendment, evidence of publication (newspaper cuttings) must be submitted.

  8. CAC Form:

    You will need to complete the relevant CAC form for amending the constitution of an Incorporated Trustee. This is typically an application for 'Amendment of Constitution' or 'Change of Objects' (if that's the primary amendment). This is usually done directly on the CAC online portal.

  9. Payment of Prescribed Fees:

    The CAC charges statutory fees for constitutional amendments. Ensure these fees are paid accurately and proof of payment is available.

    10. Key Elements of a Well-Drafted Constitution: A Checklist

    To help you ensure your revised constitution is comprehensive and covers all essential aspects, here is a checklist of key elements that should typically be included for an Incorporated Trustee.

    Section/Clause Key Content to Include Remarks/Considerations for Revision
    1. Name of the Organisation Full legal name as registered with CAC. Ensure consistency with CAC records. If changing, follow specific name change procedures.
    2. Registered Office Address Physical address of the principal office in Nigeria. Must be a physical address, not a P.O. Box. Update if the office has moved.
    3. Aims and Objectives Clear, concise, and specific statements of the organization's purpose and activities. Align with current activities. Ensure they are charitable/non-profit for ITs. Avoid overly broad or commercial objectives.
    4. Trustees (Governing Body) Number of Trustees, eligibility criteria, tenure, appointment/removal procedures, duties, powers, quorum for meetings. Review minimum/maximum number of Trustees (CAMA sets 2 minimum). Update on succession planning.
    5. Membership Categories of members, eligibility, admission process, rights, duties, termination of membership. Clarify voting rights, if any. Ensure fair and transparent processes.
    6. Meetings (General & Board) Frequency of meetings (AGM, EGM, Board meetings), notice period, quorum, voting procedures, minutes keeping. Ensure compliance with CAMA 2020 on notice periods and quorums.
    7. Financial Provisions Sources of funds, bank accounts, financial year, auditing requirements, budget approval. Emphasize transparency and accountability. Align with CAMA 2020 audit requirements.
    8. Common Seal Custody and use of the common seal. Standard clause, but ensure it reflects actual practice.
    9. Amendment of Constitution Procedure for amending the constitution (e.g., special resolution, notice period). Crucial for future changes. Ensure it aligns with CAMA and is practical.
    10. Dissolution Conditions for winding up the organization, distribution of assets (must be to another similar non-profit entity). Strictly adhere to CAMA 2020 for non-profit asset distribution.
    11. Indemnity Protection for Trustees/officers acting in good faith. Standard legal protection clause.

    Common Pitfalls to Avoid During Constitution Revision and Submission

    Even with the best intentions, organizations sometimes make mistakes that can prolong the CAC approval process. Be mindful of these common pitfalls:

    • Incomplete Documentation: Submitting an application with missing minutes, resolutions, or forms is the quickest way to get a query from CAC.
    • Lack of Proper Internal Approval: Failing to follow the procedures for amendment laid out in your *existing* constitution and CAMA (e.g., not obtaining a special resolution).
    • Discrepancies Between Old and New Versions: The 'Track Changes' version must clearly match the 'Clean' version. Any inconsistencies will raise flags.
    • Failure to Pay Prescribed Fees: Always confirm the current CAC fees for amendments and ensure timely payment.
    • Not Seeking Professional Advice: Attempting to draft complex legal documents without legal or corporate secretarial expertise can lead to errors, ambiguities, and non-compliance.
    • Using Outdated Forms or Information: CAC's requirements and forms can change. Always use the latest versions available on their portal.
    • Unclear or Ambiguous Wording: Vague language in the constitution can lead to internal disputes and make it difficult for CAC to approve.
    • Non-Compliance with CAMA 2020: Your revised constitution must align with the current corporate laws. Old clauses that contradict CAMA 2020 will not be approved.

    The CAC Submission Process (Brief Overview)

    Once all your documents are prepared and verified, the actual submission to CAC typically follows these steps:

    1. Online Filing:

      Most CAC applications, including constitutional amendments for Incorporated Trustees, are now primarily done through the CAC's online portal (e.g., using the 'post-incorporation' services). You will need to create an account or log in with your existing organization's details.

    2. Upload Documents:

      Scan and upload all the required supporting documents (minutes, resolutions, original and revised constitutions, etc.) in the specified formats (usually PDF).

    3. Pay Fees:

      Make the necessary payment online through the portal.

    4. Submission and Tracking:

      Submit your application. You will receive an application number which you can use to track the status of your submission on the CAC portal.

    5. Addressing Queries:

      CAC officials will review your application. If there are any discrepancies, missing documents, or issues, they will raise a 'query' on your application. You will need to address these queries promptly and accurately by providing the requested information or making necessary corrections.

    6. Approval:

      Once the CAC is satisfied that all requirements have been met, your revised constitution will be approved, and you will receive formal notification, usually in the form of a 'Certificate of Amendment' or an updated registration document.

    Conclusion: The Importance of a Clean and Compliant Constitution

    Revising your organization's constitution is more than just a bureaucratic exercise; it's a critical process for ensuring your organization remains relevant, compliant, and well-governed. A 'clean' revised constitution, meticulously prepared and accurately submitted, is a testament to your organization's commitment to good corporate governance and legal adherence.

    While the process can seem daunting with its legal and procedural intricacies, taking a structured, step-by-step approach – and not hesitating to seek professional guidance from experts like BusinessHelp CONSULT – will ensure a smooth and successful submission. A well-drafted and approved constitution provides clarity for your members, protection for your trustees, and a solid legal foundation for your organization's continued impact and growth in Nigeria.

    Don't let the complexities deter you. With careful planning and the right support, your organization can achieve a fully updated and compliant constitution, ready for the challenges and opportunities ahead.