Memorandum Of Understanding Shareholders Agreement Template for Nigeria

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Key Requirements PROMPT example:

Memorandum Of Understanding Shareholders Agreement

"I need a Memorandum Of Understanding Shareholders Agreement for my Nigerian tech startup, which will have three shareholders: two local founders holding 60% jointly and a Singapore-based venture capital firm holding 40%, with specific provisions for technology transfer and IP protection."

What is a Memorandum Of Understanding Shareholders Agreement?

The Memorandum Of Understanding Shareholders Agreement is a crucial preliminary document used in Nigerian corporate structuring to establish the foundation of shareholder relationships before finalizing a full shareholders' agreement. It is particularly valuable during company formation, restructuring, or when bringing in new shareholders, providing a framework for negotiating and documenting key terms while maintaining flexibility. The document addresses essential aspects such as shareholding structure, management rights, share transfer restrictions, and dispute resolution mechanisms, all within the context of Nigerian law, particularly CAMA 2020. This type of agreement is especially relevant for companies seeking investment, joint ventures, or those planning significant corporate changes where shareholders need to align their interests and expectations before proceeding with more detailed, binding arrangements.

What sections should be included in a Memorandum Of Understanding Shareholders Agreement?

1. Parties: Identification of all shareholders and the company, including their full legal names and addresses

2. Background: Context of the agreement, including company formation status and purpose of the MOU

3. Definitions: Key terms used throughout the agreement

4. Purpose and Scope: Clear statement of the MOU's objectives and extent of the agreement

5. Shareholding Structure: Details of share ownership, classes of shares, and shareholding percentages

6. Capital Contributions: Initial and future capital contribution requirements and mechanisms

7. Management and Control: Decision-making processes, board composition, and voting rights

8. Transfer of Shares: Rules and restrictions regarding share transfers, including right of first refusal

9. Dividend Policy: Agreement on profit distribution and dividend declaration

10. Confidentiality: Protection of company and shareholder confidential information

11. Duration and Termination: Term of the MOU and circumstances for termination

12. Dispute Resolution: Procedures for resolving conflicts between shareholders

13. Governing Law: Specification of Nigerian law as governing law and jurisdiction

14. Execution: Signature blocks and execution requirements

What sections are optional to include in a Memorandum Of Understanding Shareholders Agreement?

1. Tag-Along Rights: Used when minority shareholders need protection to join in sale of majority shares

2. Drag-Along Rights: Include when majority shareholders may need to force minority shareholders to join in a sale

3. Anti-dilution Provisions: Important when future capital raising is anticipated

4. Foreign Investment Provisions: Required when foreign shareholders are involved, addressing NIPC requirements

5. Intellectual Property Rights: Include when the company owns or will develop significant IP

6. Non-Compete Clauses: Used when shareholders may have competing business interests

7. Dead-Lock Resolution: Important for 50-50 ownership structures

8. Put and Call Options: Include when shareholders want rights to buy out or sell to other shareholders

9. Corporate Social Responsibility: Include when company has specific social or environmental commitments

What schedules should be included in a Memorandum Of Understanding Shareholders Agreement?

1. Schedule 1 - Shareholder Information: Detailed information about each shareholder including contact details and shareholding

2. Schedule 2 - Company Information: Company registration details, registered address, and business activities

3. Schedule 3 - Share Capital Structure: Detailed breakdown of share classes, rights, and current allocation

4. Schedule 4 - Reserved Matters: List of decisions requiring special majority or unanimous consent

5. Schedule 5 - Business Plan: Initial business plan and strategic objectives

6. Appendix A - Share Transfer Procedures: Detailed procedures and forms for share transfers

7. Appendix B - Voting Procedures: Detailed voting mechanisms for shareholder and board decisions

8. Appendix C - Dividend Policy Details: Specific formulas and procedures for dividend calculations and distributions

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

Relevant legal definitions
Clauses
Relevant Industries

Technology

Oil and Gas

Financial Services

Manufacturing

Agriculture

Real Estate

Telecommunications

Healthcare

Education

Retail

Mining

Construction

Professional Services

Entertainment

Energy

Transportation

Relevant Teams

Legal

Corporate Secretariat

Compliance

Finance

Corporate Affairs

Investment Relations

Risk Management

Board Secretariat

Corporate Governance

Executive Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Manager

Business Development Director

Board Member

Managing Director

Compliance Officer

Corporate Governance Officer

Investment Analyst

Shareholder Relations Manager

Risk Manager

Strategic Planning Director

Corporate Affairs Manager

Industries
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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