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

  • Why must I file Annual Returns?

    It is a mandatory statutory requirement under the Companies and Allied Matters Act to file Annual Returns yearly. 
  • What’s the difference between a business name and an LLC?

    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 
  • What is an execution clause in a contract?

    This is the section in which the parties sign the contract or agreement.
  • If I have NAFDAC Registration number, do I still need SON registration number?

    SON Product Registration scheme is mandatory for all SON’s regulated products as mandated by SON Act 56 of 1971, 20 of 1984, 18 of 1990 as amended.

    This is irrespective of the registration done by NAFDAC
  • What is data protection?

    Data protection is a legal process of protecting sensitive data.
  • Who benefits from copyright protection?

    The creator of a copyright work, usually referred to as the “author” of the work owns the copyright in the work in the first instance. However, the author is at liberty to transfer his rights to a third party. In such a case, the person who has obtained the right by transfer or other legal means becomes the owner of the copyright.
  • 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.
  • How many shareholders do I need to start a company?

    A minimum of one (1) adult shareholder is required to form a company.
  • What do I need for a trademark search in Nigeria?

    To do a trademark search you will need the name or/and logo (device) of the trademark to be searched and the Class of the trademark that accurately describes it.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp