BECOMING A MEMBER
The shares can be purchased if a promoter invites a prospective member through a private invitation – for a private company – or through the public advertisement of the prospectus for a public limited company.
. REGISTER OF MEMBERS
The company shall maintain a register of shareholders and of debenture holders and this shall be kept at the registered office or elsewhere as notified to or agreed with the ORG .
These registers should be available for inspection by the members.
The register shall record the shares and their holders.
The format of this register shall be determined by the Registrar General.
RIGHTS, OBLIGATIONS AND LIABILITIES OF MEMBERS
Rights and Obligations of Shareholders
The term shareholder is employed loosely to designate the participants (owners) in all types of commercial companies A company shall issue shares in return for the shareholder’s contribution. Such shares shall represent the shareholder’s rights and shall be referred to as ‘shares’.
Company shares are personal property and shall confer on their holders the following rights and obligations:
- A right to a share of company profits whenever they are distributed;
- A right to the company’s net assets when shared following the dissolution of the company or where the company’s share capital is effectively reduced;
- The obligation to share in the company’s losses to the limit of the par value of the shares held
- The right to participate in and vote on the collective decision of the shareholders.
And every company shall issue to a shareholder, on request, a statement that sets out:
- the class of shares held by the shareholder,
- the total number of shares of that class issued by the company and the number of shares of that class held by the shareholder;
- the rights, privileges, conditions and limitations, including restrictions on transfer, attaching to the shares held by the shareholder;
- the rights, privileges, conditions and limitations attaching to the classes of shares other than those held by the shareholder.
Note that the quota (portion) of each shareholder in the profits and losses is within the exception of General and Limited partnerships proportional to his or her contribution. This, notwithstanding the partnership deed may provide for the distribution of profits and losses based on the proportion of a partners share contribution. In addition, any clause, which attributes to one or some of the shareholders all the profits, is void. Similarly, any clause, which immunise one or some of the shareholders against the losses, is void. Note that it is unlawful to be paid dividends if a company does not make profits. Further more, the share of a partner’s dividends whose contribution is in the form of services is equivalent to that of a partner who has the least contribution in cash or in kind. However, the partnership agreement may vary this requirement.
In the event where several persons are co-owners of a share, the company is at liberty to suspend the rights conferred on thei holders, until such a time that the co-owners can designate a joint representative. However, the co-owners remain jointly and severally liable for the obligations attached to the shares. On the other hand where a share is an object of a usufruct the company has a right to suspend the rights attached to the share(s) until such a time that the bare owner and the usufructuary designate a joint representative. However both the bare owner and the usufructuary remain jointly and severally liable for the obligations attached to the shares.
Usufruct: The right to use and enjoy the profits and advantages of something belonging to another as long as the property is not damaged or altered in any way.
Further, where a share is given as a collateral (security) the owner continues to exercise the rights attached to the shares. In addition the eventual payment of any outstanding contribution is the responsibility of the owner.
. TERMINATION OF MEMBERSHIP
Membership is ended when the share is sold and the register is updated with the name of the new member who has acquired or purchased those shares or when the company has reacquitred the sahares and the register has been accordingly updated
Membership is also ended when the company is dissolved or officially put into liquidation