Investment And Shareholders Agreement for Nigeria

Investment And Shareholders Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that establishes the terms and conditions of an investment into a company and regulates the relationship between shareholders. This document combines elements of an investment agreement and a shareholders' agreement, outlining the investment terms, share allocation, governance structure, shareholder rights and obligations, and exit provisions. It ensures compliance with Nigerian corporate law, including the Companies and Allied Matters Act (CAMA) 2020 and relevant investment regulations, while providing mechanisms for protecting investor interests and maintaining effective corporate governance.

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What is a Investment And Shareholders Agreement?

The Investment And Shareholders Agreement is a crucial document used when new investors are joining a Nigerian company or when existing shareholders are reorganizing their relationship. It serves dual purposes: documenting the terms of the investment and establishing the ongoing relationship between shareholders. This agreement is particularly important in the Nigerian business context, where it must comply with local corporate law while meeting international investment standards. It typically includes detailed provisions on share subscription, payment terms, warranties, board composition, shareholder rights, transfer restrictions, and exit mechanisms. The document is essential for both domestic and foreign investments in Nigerian companies, providing clarity and protection for all parties while ensuring compliance with Nigerian regulatory requirements, including those under CAMA 2020 and various investment protection laws.

What sections should be included in a Investment And Shareholders Agreement?

1. Parties: Identification of all parties including the company, existing shareholders, and new investors

2. Background: Context of the investment, company history, and purpose of the agreement

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and interpretation rules

4. Investment Terms: Details of investment amount, share class, valuation, and payment terms

5. Completion Mechanics: Steps for completing the investment, conditions precedent, and timing

6. Warranties and Representations: Standard warranties from the company, existing shareholders, and investors

7. Board Composition and Governance: Board structure, appointment rights, and corporate governance provisions

8. Shareholder Rights and Obligations: Voting rights, dividend rights, and general obligations of shareholders

9. Reserved Matters: Decisions requiring special majority or investor consent

10. Share Transfer Restrictions: Limitations on transfer of shares and process for permitted transfers

11. Pre-emption Rights: Rights of first refusal on new share issues and share transfers

12. Tag and Drag Rights: Co-sale rights and forced sale provisions

13. Information and Reporting Rights: Financial and operational information to be provided to shareholders

14. Confidentiality: Protection of company and shareholder confidential information

15. Term and Termination: Duration of the agreement and termination provisions

16. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law

What sections are optional to include in a Investment And Shareholders Agreement?

1. Anti-dilution Protection: Include when investors require protection against future down rounds

2. Founder Commitments: Include when founders are key to the business and need specific obligations

3. Strategic Rights: Include for strategic investors requiring specific commercial rights

4. Employee Share Scheme: Include if company plans to implement employee share options

5. Environmental and Social Requirements: Include for investments with specific ESG requirements

6. Local Content Requirements: Include when Nigerian local content laws apply to the business

7. Technology Transfer Provisions: Include for investments involving significant IP or technology

8. Multiple Closing Provisions: Include when investment will occur in multiple tranches

9. Put Option Rights: Include when investors require exit guarantees

10. Non-Compete and Non-Solicit: Include when restrictive covenants are required for founders/key shareholders

What schedules should be included in a Investment And Shareholders Agreement?

1. Capital Structure: Details of share capital, shareholders, and shareholding percentages

2. Completion Requirements: List of documents and actions required for completion

3. Company Warranties: Detailed warranties about the company's business and affairs

4. Board Regulations: Detailed procedures for board meetings and decisions

5. Business Plan: Initial business plan and key milestones

6. Reserved Matters List: Detailed list of matters requiring special approval

7. Form of Deed of Adherence: Template for new shareholders joining the agreement

8. Accounting and Reporting Requirements: Specific requirements for financial reporting

9. Key Management Contracts: Terms of employment for key executives

10. Share Transfer Procedures: Detailed procedures for implementing share transfers

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Nigeria

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology

Financial Services

Manufacturing

Agriculture

Healthcare

Real Estate

Energy and Natural Resources

Telecommunications

E-commerce

Education

Infrastructure

Consumer Goods

Professional Services

Media and Entertainment

Transportation and Logistics

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Risk Management

Board of Directors

Executive Management

Corporate Secretariat

Strategy

Business Development

Mergers and Acquisitions

Investor Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Secretary

Investment Director

Managing Director

Board Director

Investment Manager

Legal Counsel

Company Secretary

Compliance Officer

Finance Director

Private Equity Manager

Venture Capital Manager

Corporate Development Manager

Strategy Director

Business Development Director

Risk Manager

Portfolio Manager

Shareholder Relations Manager

Industries
Companies and Allied Matters Act (CAMA) 2020: The primary legislation governing company formation, operation, and management in Nigeria. It provides the framework for shareholder rights, corporate governance, and company administration.
Investment and Securities Act 2007: Regulates the securities market and provides for the protection of investors. Relevant for share transfers, securities offerings, and investment regulations.
Nigerian Investment Promotion Commission Act: Governs foreign investment in Nigeria, including investment protections, guarantees against expropriation, and repatriation of capital.
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: Regulates foreign exchange transactions and international money transfers, crucial for foreign investments and profit repatriation.
Companies Income Tax Act: Governs the taxation of company profits and dividends, including provisions for withholding tax on dividends and other distributions.
Stamp Duties Act: Requires certain documents, including share transfer instruments and shareholder agreements, to be stamped and appropriate duties paid.
Federal Competition and Consumer Protection Act 2018: Regulates competition and may be relevant for investment transactions that could raise competition concerns.
Arbitration and Conciliation Act: Provides the framework for alternative dispute resolution, often included in shareholder agreements for conflict resolution.
Industrial Property Act: Relevant if the investment involves intellectual property rights or technology transfer.
Central Bank of Nigeria Act and Guidelines: Important for investments in the financial sector or transactions involving significant foreign exchange components.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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