NIGERIA Law and Practice Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Onyinyechi Chima and Edidiong Antai, ǼLEX
NGN150,000 (approximately USD110), as well as the introduction of new charges, such as annual renewal fees of NGN50,000 (USD37) for business registrations and penalties for abandoned applications. From 1 January 2025, companies with foreign partici - pation are required to renew their NIPC registration annually by paying the prescribed fee. Failure to renew may result in a loss of registered status with the NIPC, which could impact a company’s ability to benefit from investment incentives and regulatory protections. 3.2 Significant Changes to Takeover Law There have been no significant changes to takeover law in the past 12 months. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Under Nigerian law, stakebuilding prior to making a takeover bid or a mandatory offer is not prohibited and is not considered unusual. 4.2 Material Shareholding Disclosure Threshold Under Nigerian law, there are material shareholding disclosure thresholds and filing obligations under the CAMA 2020, the rules of SEC (“SEC Rules”) and the Rulebook of the Nigerian Exchange (NGX). Under the CAMA 2020, any person holding shares directly or indirectly in a public company that entitle them to exercise 5% of the unrestricted voting rights at a gen - eral meeting (a “Substantial Shareholder”) is required to give notice in writing to the company within 14 days of becoming aware that they are a Substantial Share - holder. Upon receipt of the notice, the company is required to also give notice to the CAC within 14 days. Any person with significant control over a company is also required, within seven days, to give notice of this fact to the company, following which the company must itself give notice to the CAC within one month of receipt of the notice from the shareholder with sig - nificant control. A person with significant control is defined under the CAMA 2020 to include any person directly or indirectly holding at least 5% of the shares, interest or voting rights of a company or limited liabil -
ity partnership (LLP); or holding the right to appoint or remove a majority of the directors or partners of a company or LLP; or having the right to exercise or actually exercising significant influence or control over a company or LLP. SEC also mandates the disclosure of the particu - lars of holders of 5% or more of the shares of public companies to SEC and the NGX. The Rulebook of the NGX contains a similar disclosure requirement in rela - tion to listed companies. Under the Rulebook of the NGX, a listed company is required to notify the NGX of any transaction that brings the beneficial ownership in the company’s shares to 5% within ten business days after such transaction. A listed company is also required to disclose, in its annual report, details of the holders of 5% or more of the shares of the company. 4.3 Hurdles to Stakebuilding A company’s Articles of Association (“Articles”) may prescribe a lower reporting threshold for shareholder disclosures, but it cannot establish a higher threshold through its Articles. If a lower threshold is adopted, the company will not be required to notify the CAC. Aside from the above, the potential cost and timing implications of regulatory processes in stakebuilding could pose challenges. The Merger Review Regula - tions and Guidelines necessitate notifying the FCCPC of transactions involving the acquisition of a minor - ity shareholding that grants the acquirer material influence over a company. Under these regulations, acquiring a 25% shareholding in a company leads to a rebuttable presumption of material influence. Any subsequent transaction resulting in de facto or legal control will create a new relevant merger situation, requiring FCCPC approval once more. 4.4 Dealings in Derivatives Dealings in derivatives are permitted in Nigeria subject to compliance with the derivatives market rules of the relevant exchange, the SEC Rules on the Regulation of Derivatives Trading (“SEC Rules on Derivatives”) and the Rules on Central Counterparty, and the CBN’s Guidelines for FX Derivatives in the Nigerian Financial Markets.
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