Investor Presentaiton
The Country and its
institutions
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial
Services Industry
Tax System
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods Exportation of Goods
COVID-19 Economic
and Fiscal Measures
2.5
2.4.3
2.4.4
2.4.5
Prospectuses
A public company wishing to raise funds from the public must generally
prepare a prospectus. CAMA defines a prospectus as "any prospectus,
notice, circular, advertisement, or other invitation, offering to the public for
subscription or purchase of any shares or debentures of a company."
Every prospectus issued by or on behalf of a company or company
promoter must include certain information unless the company obtains a
certificate of exemption from the Nigerian Stock Exchange.
Publication of Name
In addition to stating a company's name in its Memorandum and Articles
of Association, the name of the company is required to be displayed
conspicuously outside its office or place of business.
A company's name must also be engraved in legible characters on its
common seal and must appear on all notices, advertisements and other
publications, bills of exchange, invoices, receipts and similar documents.
In addition, all trade circulars and business letters in which the company's
name appears must bear the incorporation number of the company, and
the forenames (initials) and surnames of the directors (together with their
nationality, in the case of non-Nigerians).
Statutory Report and Meeting
Public companies are required to hold a general meeting of the company
(otherwise called "statutory meeting") within six (6) months from the date
of incorporation or the end of the financial year, as appropriate. A statutory
report is presented at this meeting setting out certain significant facts
about the company, such as capital structure, formation, expenses, and the
names and addresses of the directors.
Members, Shareholders and Types of Shares
For companies limited by shares, the terms 'shareholder' and 'member' are
synonymous for all intents and purposes.
A company must maintain a Register of Members showing names and addresses
of all shareholders, the number of shares and other particulars. Transfer of
ownership of shares is not accomplished by simple delivery of a share certificate.
The company secretary must enter a notation of the transfer in the Register of
Members and this entry is conclusive evidence of the legal ownership of the shares
and of membership. Upon transfer, the old share certificate (of the transferor) is
cancelled and a new one is issued to the transferee.
Transfer of shares in publicly quoted companies is subject to the requirements
of the Nigerian Stock Exchange and the Securities and Exchange Commission.
Besides redeemable preference shares, a Nigerian company may not, except
as authorised by CAMA and the Securities and Exchange Commission Rules
and Regulations, purchase its own shares or those of its parent company,
notwithstanding anything to the contrary in its Memorandum and Articles of
Association.
Furthermore, upon meeting certain conditions, a company may give financial
assistance to anyone to enable such person to purchase its shares.
2.5.1
2.5.2
2.5.3
Share Premiums and Discounts
When a company issues shares at a premium, the premium must be
transferred to a share premium account that may be used only for the
following limited purposes, namely, to:
•
•
pay up unissued shares of the company to be issued to members of the
company as fully paid bonus shares;
write off preliminary expenses of a newly incorporated company;
write off the expenses of, or the commission paid on any issue of
shares; or
• provide for any premium payable on the redemption of redeemable
preference shares.
The account may not be used for payment of cash dividends and can be
extinguished only by a reduction of capital.
It is unlawful for a company to issue shares at a discount.
Ordinary Shares
Ordinary shares carry a right to a share in the profits of a company after
shareholders with preference rights have been satisfied. Similarly, after all
the creditors and preferred stockholders have been satisfied on liquidation,
the remaining assets are distributable to the holders of ordinary shares.
Preference Shares
Preference shares may be issued in several classes, such as cumulative
or non-cumulative as to dividend, participating or non-participating as to
surplus profits, preferential as to income or capital, or convertible or non-
convertible as to ordinary shares. Redeemable preference shares may be
redeemed only if they are fully paid-up and must be redeemed only out of
accumulated earnings or out of the proceeds of a new issue of shares.
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Investment in Nigeria Guide - 8th Edition
KPMGView entire presentation