NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi and Toluwalase Oliver-Jude, Jackson, Etti & Edu
4.2 Role of Shareholders Role of Shareholders and Matters Reserved for Their Approval Shareholders are generally not involved in the day- to-day management of a company; this responsibility is vested in the board of directors in accordance with applicable law and the company’s articles of asso - ciation. However, certain fundamental decisions are reserved exclusively for shareholder approval, typi - cally including but not limited to: • the appointment and removal of directors; • the determination of directors’ remuneration; • the appointment and remuneration of auditors; • alteration of the company’s share capital; • amendment of the memorandum and articles of association; • conversion of the company (eg, private to public, limited to unlimited, and vice versa); • change of the company’s name; • making the liability of directors unlimited; • the appointment of a director over 70 years of age in a public company; • the sale or transfer of major company assets; • the winding up of the company; • an application for striking the company from the CAC register; and • the declaration of dividends. Shareholders exercise these powers through resolu - tions passed at general meetings. However, under CAMA, private companies may also pass written reso - lutions without convening a meeting, provided such resolutions are signed by all shareholders. 4.3 Shareholder Meetings CAMA provides for two principal types of sharehold - ers’ meetings: the Statutory Meeting and the Annu - al General Meeting (AGM). A Statutory Meeting is required to be held within six months of incorpora - tion and applies only to public companies. The AGM, however, is mandatory for all companies except small companies and single-member companies, and must be held annually unless otherwise exempted by law. Under CAMA, no more than 15 months should elapse between one AGM and the next. The CAC may grant an extension for holding an AGM, provided such
extension does not exceed three months. Notice of an AGM must be given at least 21 days in advance, although shorter notice is permissible where all share - holders entitled to attend and vote so consent. Statutory and Annual General Meetings are generally required to be held within Nigeria. However, they may be conducted electronically, provided such arrange - ments are consistent with the company’s articles of association. Business transacted at AGMs is classified into ordi - nary and special business. Ordinary business includes the declaration of dividends, the presentation of finan - cial statements, directors’ and auditors’ reports, the election of directors in place of those retiring, and the appointment, remuneration or removal of auditors and directors. Special business refers to any matters out - side the scope of ordinary business. At general meetings, resolutions are ordinarily decided by a show of hands, unless a poll is demanded by the chair, at least three members present in person or by proxy, or members representing not less than one-tenth of the total voting rights of those present and entitled to vote. In addition, private companies may pass written resolutions without convening a meeting, provided all members entitled to vote sign the resolution. The mechanism offers greater flexibility in corporate deci - sion-making while maintaining full shareholder con - sent. 4.4 Shareholder Claims As a general rule, only the company itself is entitled to institute proceedings in respect of any breach of duty or wrongdoing committed against it by its direc - tors. The rule reflects the principle of separate legal personality and majority rule in corporate governance. However, CAMA provides a structured set of excep - tions that allow shareholders to bring claims against the company or its directors in appropriate circum - stances, particularly to protect minority interests and prevent the abuse of power.
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