SHADOW DIRECTORS: RECOGNITION, LIABILITIES AND DUTIES

Abstract

There are different categories of persons involved in the execution of the company's affairs, however the capacity to bind the company as the embodiment of the company itself is limited to a few. Those who exercise acts of management and control over the company's business are usually referred to as the directors. Where persons who satisfy the statutorily prescribed qualification standard and are duly appointed by the shareholders to exercise control and manage the affairs of the company function in that capacity, they are de jure directors. However, the law in protecting individuals who are dealing with the company recognises persons who act as directors even where there is no such appointment, or irregular appointment, not duly appointed as de facto directors. It is difficult to identify a defacto director where the subject company's director is a corporate body. This paper examines the concept of shadow directors who are defacto directors under Nigerian company law the doctrinal methodology is used in this research. The main objective of this study is to analyse the duties and the legal principles for identifying a shadow director it is recommended amongst others that these principles be adopted as used in other jurisdictions.