Questions & Answers
Responsibility of partners for bounced cheques signed by the company manager
Do the local sponsors have financial responsibility for bounced cheques from the company that they are sponsored?
If I got cheques but they were bounced and the person who signed the cheques (managing director) left the country. Company is in labor zone, retail, 2 operating shops.
Dear Sir/Madam,
Please note that my response to your question will be purely from an academic point of view based on the limited preliminary information that has been provided. Therefore, it should not be treated as a legal opinion for the want of adequate knowledge and review of relevant documents when read with the applicable laws.
A situation where a cheque is dishonoured attracts both criminal and civil liability. Under Article 401 of Federal Law No. 3 of 1987, the signatory of the dishonoured cheque would be liable for criminal prosecution if the beneficiary of the dishonoured cheque files a complaint. The Public Prosecutor may then refer the case to the court who may pass the judgment, which if the signatory is found guilty, may result in a fine, detention or both. In addition, a travel ban may also be imposed at any time on the signatory of the dishonoured cheque.
Furthermore, even if the signatory is convicted of criminal liability and has served the jail term, the beneficiary of the dishonoured cheque could then file a complaint in the civil court for the unpaid amount. The signatory would then either have to repay the beneficiary or, alternatively, serve a jail term, which once served would leave the signatory free.
We understand that the cheque was signed by the managing director of the company. It should be noted that according to Article 23 of Federal Law No.2 of 2015, a company may be bound by the acts of its managing director if it arises upon the usual management of the business. Therefore, we would recommend that you call us to further discuss this matter, as the Memorandum of Association and other company related documents will need to be reviewed to provide you with adequate advice.
We look forward to hearing from you.
