Share Transfer, Share Allotment & Share Surrender

Share Transfer, Share Allotment & Share Surrender

August 25, 2022

There are various forms by which the shares of a company can be distributed to members or other interested parties, such as investors. Though they achieve the same purpose, they are quite different procedures.

SHARE SURRENDER: Share surrender occurs where a shareholder voluntarily returns or relinquishes the shares allotted to him/her by the Company back to the company. The shares are surrendered back to the Company, where the Shareholder desires not to hold the shares of the company anymore. He/She ceases to be liable as a contributor to the liabilities of the company except for past liabilities. The articles of a company must permit the company to accept a surrender of shares. To complete this process, a share surrrender form along with a signed resolution is to be filed with the Corporate Affairs Commission (CAC). The Shareholder must also write a Letter of Surrender in favour of the Company.

SHARE TRANSFER: This occurs when a shareholder gives out his/her interest in a company by way of transfer. This could either be by way of sale (where the articles of association/shareholder agreement of a company authorise such), transmission (which is an operation of law, in cases where a shareholder dies or is bankrupt) or by gift. This is done through an instrument of transfer usually executed by both the transferor and the transferee. A share transfer is complete where a share certificate is issued to the new shareholder by the company and his/her name included in the register of members. Under the CAMA 2020, share transfers do not need to be filed with the CAC but must be reflected in the company’s next filing for Annual Returns.

SHARE ALLOTMENT: This occurs either at incorporation or where the company issues or creates new shares, which can either be issued to new or existing members of the company or new investors. The shares can be allotted in exchange for cash or other consideration or as bonus shares to existing members. A private company would file a return on allotment of Shares with the CAC to register the allotment. Share allotment is often times a company’s technique to expanding its business partners or to ensure liquidity

Team 618 Bees

 

 

 

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. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.
  • Do I need a Company Secretary?

    A limited liability company (LLC) must not have a company secretary.
  • What is a testimonium clause in an agreement?

    This is the part of the agreement where the witness attests to have witnessed the execution of the agreement.
  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.
  • What is data protection?

    Data protection is a legal process of protecting sensitive data.
  • What is the importance of registering a patent?

    The main reason to register a patent is to ensure that the inventor is able to exclusively commercially exploit an invention. The rights to a patent are vested in the “Statutory Inventor” i.e. the first person to file and register the patent.
  • What will happen if I buy the wrong category of forms with NAFDAC?

    Nothing, the purchased form will be in your account for future use.

     
  • How many directors do I need to start a company?

    A minimum number of one (1) adult director is required to form a company.
  • Does a trademark search automatically reserve my trademark name?

    No, a trademark search does not automatically reserve that which is sought to be trademarked. A search ascertains whether that which is sought to be trademarked is available or violates any existing trademark.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp