My understanding is that this would fall within section 659 (1) of the Companies Act 2006: the company has acquired its own fully paid up shares otherwise than for valuable consideration. (b) The power to accept the surrender of shares cannot be exercised by a company unless expressly given by the Articles of Association. respect of the part of the shares they purchased in their names and In addition to this, the shareholder will also submit its share certificate to the company. A proxy or agent representing a shareholder can, through a Power of Attorney, enter a binding contract to sell and transfer the shareholder's shares to another party. Usually, a company's shares are transferred by an instrument of transfer. option scheme or any other similar scheme. Prescribed particulars Class of share Prescribed particulars 6. shares to existing members or allotment of shares to existing right upon transfer of shares. Mondaq Ltd 1994 - 2023. Authority of Directors to Allot Shares. The Procedure for Transferring Company Shares, Templates and examples to download in Word and PDF formats. On the second exception to the amendment (where aggregate share disposal proceeds are less than 100 million naira in any 12 consecutive months), in practice a prudent buyer may, out of an abundance of caution, request that the seller undertakes to indemnify the buyer in the event that the buyer bears the ultimate burden of complying with section 45 where the 100 million-naira threshold is reached. number of shares in issue and enhancing the value of the shares authorising the share buy-back; The shares to be purchased must be fully paid up; The shares can only be paid for by the company from its parent companies. 1000 each. made law in Nigeria in 1990 as a decree of the military He also has an option to be registered as member company which is a subsidiary may acquire shares in its holding The application and assignment cash were paid. Price: 15,000 or 20 per copy [Hard Back- 20 chaps/715 pages] Contact Information Email: info@idrinstitute.com , info@adrinafrica.org WhatsApp only: 0803-703-5989 Voice Call - Mobile: 0817-630-8030, +234-805-2128-456, +234-909-9651-401 Landline: 09-2913581, +234-9-2913499, +234-9-2919209 Office Address: 50 Julius Nyerere Crescent, [Next To The SHARE TRANSFER: This occurs when a . To the extent forfeiture involves a reduction of the companys capital. Immediately prior to the amendment of the Capital Gains Tax Act (CGTA) by the FA 2021, capital gains accruing to a person, whether a company or an individual, from the disposal of shares were not chargeable to tax. written notice to the company. recognised and provided for in the CAMA 2020. MAIDUGURI, Nigeria For over a decade, the extremist group Boko Haram has terrorized northeastern Nigeria killing tens of thousands of people, kidnapping schoolgirls and sending suicide . (including any distribution of assets to members on a winding Should a prudent buyer insist that the purchase money be paid into and kept in escrow until the tax position is addressed to their reasonable satisfaction (e.g. Transfer of Shares under the 2012 Companies Act By R K Solomon1 Section 83: Nature of shares. Wwf France Contact, Get share prices, volume traded, daily price movements and year to date percentage changes for companies listed on the Nigerian Stock Exchange. By Stephen Chima Arubike and Athanasius Akor. The CAMA 2020 now permits a company to (whether in cash or otherwise) of the company's assets Articles restrict the transfer of shares of its members. The CA 2006 merely provides that a share is a share in the company's share capital. SHARE CAPITAL OF A COMPANY IN NIGERIA The share capital is fundamental to a set up of a company. This is available to small companies. The SEC Code provides that the board is to ensure that all shareholders are given equal treatment and minority shareholders are adequately protected from the abusive actions of controlling. These shares can either be ordinary or preferred shares. representatives of the deceased. We are not a law firm or a substitute for a Lawyer or law firm. Enter your email address to follow this blog and receive notifications of new posts by email. 200 at the time of allotment, Rs. So the forfeiture of a share should happen only for the non-payment of the call on shares by the members and in accordance with articles of the company. Nigeria has not issued a statement on the militants' defections. Shares, which are liable to be forfeited on account of default in the payment of calls, may be surrendered by the holder if he so desires. First, gains accruing to a person upon disposal of his shares in any Nigerian company where the proceeds from such disposal are reinvested within the same year of assessment in the acquisition of shares in the same or other Nigerian companies. Articles restrict the transfer of shares of its members. The information in this blog post (post) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. The Provisions of the Companies and Allied Matters Act this a consideration has to pass from one person to. Mondaq uses cookies on this website. The Companies and Allied Matters Act 2020 ("CAMA 2020", "the New CAMA", or "the Act") was assented to by President Muhammadu Buhari on 7 August 2020. transfer to the Company for registration. Nigerias Finance Act 2021 (FA 2021) has ushered in notable modifications to several provisions of the countrys tax statutes. Thus, even if there is any inconsistency between section 4 of the CGTA and the amendment, the latter, being a specific provision, will prevail over the former (see Omini et al. Ichimoku Settings 7,22,44. For thirty years, there were no significant Can shares be surrendered for no consideration. Any party that holds shares in a company can transfer shares to another subject to any share transfer restriction provided in the Articles of the company. Will the buyer really not get good title until the calculation, payment and receipting steps are concluded correctly by other parties? The legal plan is available anywhere in Nigeria. The expectation of the Securities and Exchange Commission (SEC) is that the application of the share buyback (particularly in present situation where the stock price of most quoted companies are. So there is nothing in the Act to surrender of shares but these have been admitted by the courts, upon the principle, that they have practically the same effect as forfeiture, the main difference being that one is a proceeding in invite and the other a proceeding taken with the acceptance of the shareholder who is unable to retain and pay future calls on the shares. N50.00. Where, however, a portion of the proceeds from such disposal is not reinvested in such a manner, capital gains tax is chargeable on that portion. Mondaq Ltd 1994 - 2023. Businesses may combine by a transfer or amalgamation of assets or shares, or both, or other interests held in those entities (in the case of Section 154 of CAMA provides that a personal representative so such consideration as may be determined to issue shares up to the Surrender of shares may take place as follows, depending largely on whether the shares are fully paid or not. representatives of the deceased. and creditors or aggrieved shareholders will be entitled to file an Therefore, there is no longer an obligation to register a transfer of shares at the Commission. A) Where a shareholder transfers all his shares to only one purchaser; The transferor deliver to the purchaser an instrument of transfer duly executed together with the share certificate. The company will register the purchaser as a shareholder of the company. Dividends, repurchases, redemptions and surrenders of shares. Second, where the aggregate disposal proceeds are less than 100 million Nigerian naira ($240,600) in any 12 consecutive months. Assuming this to . to the transferee and his name entered into the register of so. Shareholder rights and powers in Nigeria Streamsowers & Khn Nigeria July 10 2018 Rights and equitable treatment of shareholders. or. Allotment of Shares for Companies with Unissued Share Capital ( allotment@cac.gov.ng) Surrender of Shares to Company as gift ( surrendershares@cac.gov.ng) Restriction of Address ( restrictaddress@cac.gov.ng) Extension of Time for holding Annual General Meeting ( agmtimeextension@cac.gov.ng) Voluntary Striking-off ( voluntarystrikeoff@cac.gov.ng) Section 190 of the CAMA permits subsidiaries to hold shares in A) Where a shareholder transfers all his shares to only Articles of association commonly provide that nil-paid or partly paid shares that are liable to forfeiture may be surrendered to the company (see for eg the Model Articles for a public company limited by shares, article 62). required to comply with statutory formalities of registration of We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. Procedure for Cancellation of Shares 1. For example, what happens where there is a series of disposals during the course of the assessment year, and those disposals relate to shares in several companies rather than one company? There transaction would be ultra virus. so if a person is not. The Provisions of the Companies and Allied Matters Act (CAMA) and a Company's Article of Association ("Articles") provides for the transfer and transmission of shares of the shareholders of the Company.Section 22 (2) of CAMA provides that a private company may by its Articles restrict the transfer of shares of its members. Fill in this affidavit. provisions is an acceptance by the company of the offer by the shares to more than one purchaser; The shareholder executes the instrument of transfer with his determine2. - After reduction, both the shares are to be consolidated into shares of `10. But even if they do, many questions may still arise as to the extent to which such regulations could in effect depart from what would appear to be a clear but, in effect, highly inconvenient primary statutory provision. ("Articles") provides for the transfer notifying the applicant within the stipulated 42 days is that there Under Nigerian law, the authority to allot shares is vested in the company which may delegate it to the directors subject to any conditions or directions that may be imposed by the company's articles of association or from time to time by the company in a general meeting. allotment is communicated by the company. what is surrender of shares? purchaser executes the transfer and sends the transfer instrument Specialist advice should be sought CAMA further provides that every person, whose name is entered applicant.