The Companies and Allied Matters Act, 2020 (“CAMA 2020”) has introduced the concept of significant control reporting into Nigerian company law. Persons with significant control in any company are now required to disclose to the company the particulars of such control within 7 (seven) days of acquiring such significant control. Companies, must in turn, notify the Corporate Affairs Commission (“CAC”) within 1 (one) month of receipt of the information, disclose the information in their annual returns to the CAC and update their registers of members with the appropriate details.
A significant control arises where a person:
- Directly or indirectly holds at least 5% of the shares or interest in a company or limited liability partnership;
- Directly or indirectly holds at least 5% of the voting rights in a company or limited liability partnership;
- Directly or indirectly holds the right to appoint or remove a majority of the directors or partners in a company or limited liability partnership;
- Has the right to exercise significant influence or control over a company or limited liability partnership; or
- Has the right to exercise significant influence or control over the activities of a trust or firm whether it is a legal entity but would itself satisfy any of the first four conditions if it were an individual.
Substantial shareholders in public companies, who either by themselves or by their nominees, hold shares that entitle them to at least 5% of the unrestricted voting rights at any general meeting must notify such companies in writing within 14 (fourteen) days of becoming aware of their substantial shareholder status. A public company is required to notify the CAC of a substantial shareholder within 14 (fourteen) days of receiving notice of such a shareholder.
CAMA 2020 requires a person who ceases to qualify as a substantial shareholder in a public company to notify the company in writing within 14 (fourteen) days of ceasing to be (or of becoming aware he is no longer) a substantial shareholder in the company. The company, shall in turn, notify the CAC within 14 (fourteen) days of receipt of the notice from the shareholder or of becoming aware that such person has ceased to be a substantial shareholder.
Shareholders and companies that fail to comply with the above reporting obligations are liable to such fines as the CAC may prescribe by regulation.
We are available to advise and support your company on all statutory and regulatory compliance matters.
For further information, please contact Companysecretary@aluko-oyebode.com