COMPANY LAW ā Name Reservation ā Discretionary Nature of Section 32(1) of CAMA
Principle Statement
The Commission may, on written application and on payment of the prescribed fee, reserve a name pending registration of a company or a change of name by a company. The above is clear and unambiguous, it did not say or use the word 'must'. In effect, the respondents have or had a discretion in such a circumstance.
Ratio Decidendi (Source)
Per Ogbuagu, JSC, in Amasike v. Registrar General, CAC & Anor (2010) NLC-2042005(SC) at p. 29; Paras DāE and p. 30; Paras AāB.
"The Commission may, on written application and on payment of the prescribed fee, reserve a name pending registration of a company or a change of name by a company. The above is clear and unambiguous, it did not say or use the word 'must'. In effect, the respondents have or had a discretion in such a circumstance."
Explanation / Scope
This principle establishes that name reservation under Section 32(1) of CAMA is discretionary, not mandatory. The word “may” indicates discretion. The Commission can decide whether to reserve a name. The principle applies where name reservation is sought. It ensures that the Commission’s discretion is recognized. The principle reflects the permissive nature of the provision. It prevents parties from demanding reservation as of right. The court must respect the Commission’s discretion. The principle provides guidance on the interpretation of “may”.
