Shares Agreement for Nigeria

Shares Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law, particularly the Companies and Allied Matters Act (CAMA) 2020, that establishes the terms and conditions for share ownership, transfer, and management within a company. This agreement outlines shareholders' rights and obligations, share transfer restrictions, corporate governance provisions, and protection mechanisms for both majority and minority shareholders. It incorporates specific requirements of Nigerian corporate law while addressing practical aspects of shareholding relationships, including pre-emptive rights, board composition, and dividend policies. The document serves as a crucial framework for managing shareholder relationships and corporate governance in the Nigerian business context.

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What is a Shares Agreement?

The Shares Agreement is a fundamental document used in Nigerian corporate transactions to regulate the relationship between shareholders and establish clear protocols for share ownership and transfers. It is essential when setting up new companies, admitting new shareholders, or formalizing existing shareholder arrangements. The agreement must comply with the Companies and Allied Matters Act (CAMA) 2020 and other relevant Nigerian legislation, including the Investment and Securities Act where applicable. This document typically includes provisions for share transfer restrictions, pre-emptive rights, corporate governance, dividend policies, and dispute resolution mechanisms. It's particularly crucial in private companies where shares are not publicly traded and in situations involving foreign investment, requiring compliance with Nigerian Investment Promotion Commission regulations. The agreement serves to protect both majority and minority shareholder interests while ensuring smooth corporate operations and governance.

What sections should be included in a Shares Agreement?

1. Parties: Identifies and provides details of all parties to the agreement including the company and shareholders

2. Background: Sets out the context of the agreement, including current shareholding structure and purpose of the agreement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Share Capital and Shareholding: Details the company's share capital structure and each shareholder's holdings

5. Consideration: Specifies the payment terms and consideration for the shares

6. Completion: Sets out the completion mechanics, timing, and deliverables

7. Share Transfer Restrictions: Establishes restrictions on transfer of shares and process for permitted transfers

8. Pre-emptive Rights: Details shareholders' rights of first refusal on share transfers or new issues

9. Board Composition and Management: Outlines corporate governance structure and board appointment rights

10. Shareholder Meetings and Voting: Specifies procedures for shareholder meetings and voting requirements

11. Reserved Matters: Lists decisions requiring special majority or unanimous shareholder approval

12. Dividends and Distributions: Sets out dividend policy and distribution of profits

13. Information Rights: Details shareholders' rights to company information and financial reports

14. Confidentiality: Establishes obligations regarding confidential information

15. Termination: Specifies circumstances and process for terminating the agreement

16. Governing Law and Jurisdiction: Confirms Nigerian law as governing law and jurisdiction for disputes

What sections are optional to include in a Shares Agreement?

1. Tag-Along Rights: Include when protecting minority shareholders' right to join in sale of majority stake

2. Drag-Along Rights: Include when majority shareholders need right to force minorities to join in sale

3. Anti-dilution Protection: Include when protecting shareholders from dilution in future funding rounds

4. Put and Call Options: Include when parties want rights to force sale/purchase of shares in specific circumstances

5. Non-Compete and Non-Solicitation: Include when shareholders are also employees or have access to sensitive information

6. Deadlock Resolution: Include when equal shareholding exists to resolve potential management deadlocks

7. Share Valuation: Include when specific valuation methodology needed for share transfers

8. Foreign Investment Provisions: Include when foreign shareholders are involved to ensure NIPC compliance

What schedules should be included in a Shares Agreement?

1. Schedule 1 - Share Capital and Shareholding Structure: Detailed breakdown of share capital and shareholding percentages

2. Schedule 2 - Completion Obligations: List of actions and documents required for completion

3. Schedule 3 - Reserved Matters: Comprehensive list of decisions requiring special approval

4. Schedule 4 - Company Information: Key company details including registration number, registered office

5. Schedule 5 - Form of Share Transfer Notice: Template for notice of intention to transfer shares

6. Schedule 6 - Deed of Adherence: Template for new shareholders to become bound by the agreement

7. Appendix A - Board Resolutions: Pro-forma board resolutions approving share transfers

8. Appendix B - Share Certificates: Copies of share certificates or specimens

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

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Technology

Manufacturing

Oil and Gas

Real Estate

Agriculture

Telecommunications

Healthcare

Mining

Retail

Professional Services

Construction

Education

Entertainment

Energy

Transportation

Relevant Teams

Legal

Finance

Corporate Secretariat

Compliance

Corporate Affairs

Investment Relations

Board Secretariat

Risk Management

Corporate Development

Executive Leadership

Relevant Roles

Chief Executive Officer

Managing Director

Company Secretary

Legal Counsel

Corporate Lawyer

Chief Financial Officer

Finance Director

Investment Manager

Compliance Officer

Board Director

Shareholder Relations Manager

Corporate Governance Officer

Investment Analyst

Business Development Manager

Risk Manager

Corporate Affairs Director

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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