Shareholders Agreement Nigeria

In Nigeria, shareholder agreements are generally governed by contract law and the Companies and Allied Matters Act (CAMA) 2004. The CAMA regulates the scope of the shareholders` agreement, while other issues lie to a large extent in the area of contracts. The CAMA also contain provisions governing the activities of Nigerian companies and the mandatory provisions of the Law cannot be amended in the context of a shareholders` agreement[2]. A well-developed shareholders` agreement should therefore pay tribute to the provisions of the CAMA and the general laws on contracts. The company`s board of directors should approve the movement of shares. In most cases, shareholder agreement is essential for the sale of shares in a private company. The 7 considerations and clauses above already allow you to see why your startup urgently needs a shareholders` agreement. Below are 4 things that a shareholders` agreement will help you: 3. Amendment: The process for amending a company`s articles of association is rigid, and such a change must be notified to and approved by the Commission des affaires d`entreprise (CAC). But the modification of the shareholders` agreement is less costly, less formal and more flexible than the articles of association.

The Companies and Allied Matters Act now provides remedies to prevent such unfair behaviour towards a minority shareholder. Despite this, these corrective measures can be extremely costly, so it is much better to avoid the situation from the outset. In this regard, a shareholders` agreement becomes useful and necessary. Sometimes entrepreneurs start businesses with friends and family and don`t think about protecting their interests in the business until it`s often too late. While it`s legitimate to trust friends and family in business, it`s not advisable to leave your startup unprotected. Although the articles of association (articles of association of the company) and the founding agreement undoubtedly offer certain guarantees to your startup, a shareholders` agreement is clearly aimed at certain risks best covered by a shareholders` agreement. These risks relate to shareholders` rights and liabilities, including their shares, dividends, preferential subscription rights, share transfer rights, voting rights and other important matters that could constitute or break up a startup. You realize the need to have a shareholders` agreement for your startup and that it happens before or immediately before the creation of your startup. .