Are company directors personally liable in Nigeria? Discover the legal duties of directors, risks of misconduct, and how to avoid personal liability under CAMA.
Understanding Director Liability Under Nigerian Law
Being appointed a company director in Nigeria comes with prestige—but also significant legal responsibilities. Many directors, especially in SMEs or family businesses, are unaware that missteps can lead to personal liability, fines, or even imprisonment.
Understanding the scope of director liability in Nigeria helps you protect yourself and run your company ethically.
Who Is a Director Under Nigerian Law?
According to CAMA 2020, a director is anyone appointed to direct and manage the affairs of a company. This includes executive directors, non-executive directors, and shadow directors (those who influence decisions behind the scenes).
Fiduciary Duties of a Company Director
- Act in Good Faith
- Always in the best interest of the company—not personal gain.
- Avoid Conflicts of Interest
- Must not exploit company opportunities for personal benefit.
- Act With Care and Skill
- Negligence can result in liability.
- Compliance with Laws
- Tax, environmental, labor, and corporate filings must be adhered to.
When Can Directors Be Held Personally Liable?
- Fraudulent trading
- Breach of fiduciary duties
- Illegal dividend declarations
- Failure to remit taxes or pension
- Negligence in insolvency or liquidation
Protecting Yourself as a Director
- Keep accurate board minutes
- Seek legal advice on complex issues
- Ensure proper insurance (e.g., Directors & Officers insurance)
- Stay involved—don’t act as a passive director
Final Thoughts
Serving as a director in Nigeria is a position of trust. Understanding your legal obligations isn’t optional—it’s a safeguard against reputational and financial ruin.
