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  1. Private companies
  2. Public companies

Private companies


Private company is defined by section 22 of CAMA 1990 as a company, which by its articles limits the number of its members to fifty and restricts the right to transfer its shares. Example of this is Obasanjo Farms Nig. Ltd.


  1. It must be specifically stated in its memorandum of association that it is incorporated to be a private company.
  2. Private companies restrict the right to transfer shares to outsiders.
  3. The required membership is a minimum of two and a maximum of fifty.
  4. Its shares are not quoted on the stock exchange market.
  5. It does not invite the public to subscribe to its shares.
  6. The name of the company must end with “Limited”.
  7. It has a simple way of appointing its directors.


  • According to section 22 of CAMA 1990, give a simple definition of Private company.
  • List 5 distinguishing characteristics of a private company.

Lesson tags: Financial Accounting Lesson Notes, Financial Accounting Objective Questions, SS2 Financial Accounting, SS2 Financial Accounting Evaluation Questions, SS2 Financial Accounting Evaluation Questions Second Term, SS2 Financial Accounting Objective Questions, SS2 Financial Accounting Objective Questions Second Term, SS2 Financial Accounting Second Term
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