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Home Blog Page 3938

Shares Under The Companies and Allied Matters Act (CAMA) 2020 Nigeria

By
Emmanuel Ifeanyi Ogbuka
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0
CAC

Part 1: 

Shares are basically units of equity ownership of a company and constitute a major benchmark of rights for company members under Nigerian Corporate Law. Governed by the Companies and Allied Matters Act (CAMA) 2020 through the Corporate Affairs Commission (CAC), shares will be constituting the focus of this article, particularly regarding the topics of :-

– The rights and liabilities attached to shares.

– The transferability of shares

– Non-voting and weighted shares

– The issuance of shares

– The validation of improperly issued shares.

What are the rights and liabilities attached to shares under CAMA 2020?

– Subject to the relevant provisions of this act, the rights and liabilities attached to the shares of a company or any class thereof shall :-

a). Be dependent on the terms of issue or the company’s articles, and

b). Notwithstanding anything to the contrary in the terms of the articles, include the right to attend any general meeting of the company and vote at such a meeting.

What does the act say on the transferability of shares as property?

The act provides that shares or other interests of a member in a company are personal property transferable in the manner prescribed in the articles of association of the company.

What are the provisions of the act on non-voting and weighted shares?

The act provides that :-

– Unless otherwise provided by any other enactment, any share issued by a company shall carry the rights on a poll at a general meeting of the company to one vote in respect of each share.

– No company may by its articles or otherwise authorise the issue of shares which carry more than one vote in respect of each share or which don’t carry any right to vote.

– If a company contravenes any of the provisions of the act on non-voting and weighted shares, the company and any other officer in default shall be fined to an extent as the CAC shall specify and any resolution passed in contravention of this section shall be void.

– The provisions of CAMA 2020 on non-voting and weighted shares will not affect any right attached to preference shares .

What are the provisions of the act regarding the issue of shares?

The act provides that:-

– Subject to any limitation in the articles of a company with respect to the number of shares which may be issued and any pre-emptive rights prescribed in the articles in relation to the shares, a company has the power, at such times and for such consideration as it shall deem to issue shares.

What are the provisions of the act regarding the pre-emptive rights of existing shareholders?

The act provides that a company shall not in any event allot newly issued shares unless they are offered in the first instance to all existing shareholders of the class being issued in proportion as nearly as may be to their existing holdings. 

What does CAMA 2020 say about the issuance of class shares?

A company can, where authorized by its articles to do so, issue classes of shares and these shares shall not be treated as being of the same class unless they rank equally for all purposes.

The act also provides that any share in a company may be issued with such preferred, deferred or other special rights or such restrictions, whether with regard to dividend, return of capital or otherwise as the company may determine.

What does the act say about the issuance of shares at a premium?

– The act provides that a company’s shares may be issued at a premium.

– The act also states that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on those shares shall be transferred to a “share premium account”.

– The provisions of the act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid-up share capital of the company. 

– The share premium account may  be applied by the company in :-

a). Paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.

b). Writing off the preliminary expense of a newly incorporated company.

c).Writing off the expenses of, or the commission paid on any issue of shares of the company.

d). Providing the premium payable on redemption of any redeemable share of the company.

It should however be noted that it is unlawful under the act for a company to issue shares at a discount.

Also, no company limited by shares shall, after the commencement of this act, issue any preference shares which are irredeemable.

What are the provisions of the act on the validation of improperly issued shares?

The act provides that:-

-Where a company has purported to issue or allot shares and the issue or allotment of those shares was invalid by reason of any provision of this Act or any other enactment, of the articles or the terms of issue or allotment were inconsistent with or unauthorized by any such provision, the company may within 30 days of an application made by a holder, mortgagee of those shares or by a creditor of the company, and by special resolution, validate the issue or allotment of those shares or confirm the terms of the issue and allotment, as the case may be.

– Where a company refuses to validate the issue or allotment of the shares or confirm the terms of the issue and allotment, the Court may, upon application made by a holder, a mortgagee of those shares or by a creditor of the company, and upon being satisfied that in all the circumstances it is just and equitable to do so, validate the issue, allotment of those shares or confirm the terms of the issue and allotment, as the case may be.

-In every case where the court validates an issue, allotment of shares or confirms the terms of an issue or allotment in accordance with the provision mentioned above, it shall make, upon payment of the prescribed fees, an order which is proof of the validation or confirmation and upon the issue of the order, those shares are deemed to have been issued or allotted upon the relevant terms of issue or allotment.

Corporate Law :- Shares Under the Companies and Allied Matters Act (CAMA) Part 2

This article installment will be focused on the topic of shares in areas that include :-

– Shares Allotment

– The method of making applications for share allotments under CAMA 2020

– Allotments as contractual considerations

– Irregular allotments

– Obtainable returns on allotments

Who has the authority to allot shares under CAMA 2020?

-The power to allot shares is vested in the company, and, in relation to a private company, this power may be delegated to the directors, subject to any condition or direction that may be imposed in the articles or by the company in general meeting.

-The power to allot shares of a public company is subject to the provisions of the Investment and Securities Act.

-The powers to allot the shares of a company are not exercised by the directors of a company unless express authority to do so has been vested in the board of directors by :-

(a) the company in a general meeting ; or

(b) the company’s articles.

What is the prescribed method of application and allotment regarding shares under CAMA 2020?

The act states that without prejudice to the provisions of the Investment and Securities Act, the following provisions apply in respect of an application for an allotment of issued shares of a company:-

(a) in the case of a private company or a public company where the issue of shares is not public, there shall, if so required by the company, be submitted to the company a written application signed by the person wishing to purchase shares indicating the number of shares required ;

(b) in the case of a public company, subject to conditions imposed by the Securities and Exchange Commission where the issue of shares is public, there shall be returned to the company a form of application as prescribed in the company’s articles, duly completed and signed by the person wishing to purchase the shares; and

(c) upon the receipt of an application, a company shall, where it wholly or partly accepts the application, make an allotment to the applicant and within 42 days after the allotment notify the applicant of the fact of allotment and the number of shares allotted to him.

An applicant under this section shall have the right at any time before allotment, to withdraw his application by written notice to the company. 

What does the act say about allotments as an acceptance of contract?

An allotment of shares made and notified to an applicant in accordance with section 150 is an acceptance by the company of the offer by the applicant to purchase its shares and the contract takes effect on the date on which the allotment is made by the company.

What are the provisions of the act on voidability of allotments and the effect of irregular allotments?

– An allotment made by a public company before the holding of the statutory meeting to an applicant in contravention of the provisions of this Act, is voidable at the instance of the applicant:-

(a) within one month after the holding of the statutory meeting of the company and not later, or  

(b) where the allotment is made after the holding of the statutory meeting, within one month after the date of the allotment, and not later : Provided that the allotment shall be so voidable notwithstanding that the company is in the course of being wound up.

The act also provides that If any director of a company knowingly contravenes, permits or authorizes the contravention of any of the provisions of this Act with respect to allotment, he is liable to compensate the company and the allottee respectively for any loss, damages or costs which the company or the allottee may have sustained or incurred thereby, but proceedings to recover any such loss, damages, or costs shall not be commenced after the expiration of two years from the date of the allotment.

What are the obtainable returns regarding allotments as required under the act?

When a company limited by shares makes any allotment of its shares, the company shall within one month thereafter deliver to the Commission for registration:-

(a) a return of the allotments in the prescribed form, stating – 

(i) the number and nominal value of the shares comprised in the allotment,

(ii) the names, addresses and description of the allottees, and

(iii) the amount, if any, paid or due and payable on each share, whether on account of the nominal value of the shares or by way of any premium payable in relation to such shares ;

(b) in the case of shares allotted as fully or partly paid up otherwise than in cash :-

(i) a contract in writing, constituting the title of the allottee to the allotment together with any contract of sale, or for services or other consideration in respect of which that allotment was made, such contracts being duly stamped,

(ii) a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up, and the consideration for which they have been allotted, and

(iii) with respect to public companies, particulars of the valuation of the consideration in accordance with section 162 of the act ; and

c) any other document as may be required by the Corporate Affairs Commission (CAC).

What are the provisions of the act regarding the prohibition of payments of commissions and discounts from shares and capital?

– Except as provided in section 156 of the act, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any share in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any share in the company, whether the shares or capital money are so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or any such money is paid out of the nominal purchase money or contract price, or otherwise.

-Nothing in this section affects the payment of any brokerage or agency fees agreed between the company and a broker or agent of the company, for services provided by such broker or agent in connection with the raising of the capital by the company.

– A vendor to, promoter of, or other person who receives payment in money or shares from a company, shall have and is deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been legal under this section

What are the provisions of the act on the power to pay commissions in certain areas? 

The act provides that a company may pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any share in the company or procuring or agreeing to procure subscription, whether absolute or conditional, for any share in the company if :-

(a) the payment of the commission is authorized by the articles , and if (b) the commission paid or agreed to be paid does not exceed 10% of the price at which the shares are issued or the amount or rate authorized by the articles, whichever is lesser.

What are the provisions of the act regarding calls on & payments for shares? 

-Subject to the terms of the issue of the shares and of the articles, the directors may make calls upon the members in respect of any money unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment of the shares made payable at fixed times provided that no call shall exceed one fourth of the nominal value of the share or be payable at less than one month from the date fixed for the payment of the last preceding call.

A call is deemed to have been made at the time when the resolution of the directors authorizing the call was passed, and may be required to be paid by installments.

Regarding payment for shares, subject to the provisions of sections 161 and 162, the shares of a company and any premium on them shall be paid up in cash, or where the articles so permit, by a valuable consideration other than cash or partly in cash and partly by a valuable consideration other than cash.

The act also provides that shares are not deemed to have been paid for in cash except to the extent that the company shall have actually received cash for them at the time of, or subsequently to, the agreement to issue the shares. 

Musk Said Fight with Zuckerberg will Happen in “Epic Location” in Italy

By
Samuel Nwite
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0

The proposed fight between X (Twitter) owner Elon Musk and Meta’s CEO Mark Zuckerberg is nearing its day, according to a post made by Musk on Friday.

The world’s richest man said contrary to some media reports, the fight will be managed by his and ‘Zuck’s foundations’, not the UFC.

Musk said that he has spoken to the PM of Italy and the Minister of Culture. “They have agreed on an epic location.” He added that the fight will be livestreamed on X (Twitter) and Meta (Facebook or Instagram). 

“Everything in camera frame will be ancient Rome, so nothing modern at all,” he said. 

The fight which started like a joke followed Meta’s plan to launch Threads, a text-based platform that copied Twitter. Zuckerberg said he created the copycat platform because there is a need for a bigger platform for real-time conversation.

“It will take some time, but I think there should be a public conversation app with 1 billion+ on it. Twitter has had the opportunity to do this but hasn’t nailed it. Hopefully, we will,” he said on Threads.

In response to Threads’ launch, Twitter had in early July, threatened to sue Meta – accusing the social media behemoth of engaging in “systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.”

In June, Musk responded to a tweet about Meta’s plan to launch Threads saying: “I’m sure Earth can’t wait to be exclusively under Zuck’s thumb with no other options.” He followed up with a tweet teasing a cage fight with Zuckerberg.

The Meta’s chief executive, posting a screenshot of Musk’s tweet overlaid in an Instagram story, fired back with the caption: “Send Me Location.”

Since then, speculations have circled the seriousness of the American tech billionaires, especially as Musk, in his usual way, has been making posts of humor about the fight.

“For fighting preparation, I’ll use technique of famous Inspector Clouseau & have Cato attack me at random moments,” he said in July.

The fight story was revitalized last week when Musk started posting about his preparatory workout.

He said last week that he’s “lifting weights throughout the day, preparing for the fight” because he doesn’t have “time to work out, so I just bring them to work.”

Full details of the fight are yet to be announced by Musk and Zuckerberg’s foundations.

Last month, a picture of Zuckerberg training with kickboxing champions Israel Adesanya and Alexander Volkanovski surfaced online. Zuckerberg 39, is trained in martial arts and recently won gold and silver medals at his very first Brazilian jiu-jitsu tournament in Redwood City, California. 

Musk 52, is taking other steps in preparation of the fight. He said Friday that he spent 3 hours in an MRI machine on Monday.

“Bottom line is that my C5/C6 fusion is solid, so not an issue,” he said.

“However, there is a problem with my right shoulder blade rubbing against my ribs, which requires minor surgery. Recovery will only take a few months,” he said.

The Waves of News Pranking in Nigeria’s Digital Sphere

By
Mutiu Iyanda
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0

In the bustling world of information and media, where digital platforms have rewired the very fabric of news production and consumption, a curious trend has taken root in Nigeria’s evolving landscape – the rise of “news pranking”. This novel phenomenon introduces a fresh perspective on news dissemination, challenging traditional norms and raising crucial questions about the role of media, the authenticity of information, and the empowerment of citizen voices in this digital era.

Picture this: news stories that are not just informative, but are also laced with satire, parody, and exaggeration. This is the essence of news pranking, a departure from the traditional reporting that aims to present events as they unfold. In the realm of alternative voices and citizen journalism, news pranking has found its foothold, disrupting the established order and offering a new lens through which to view the world. Meanwhile, beneath this captivating trend lies a labyrinth of implications and nuances that deserve our attention:

Imagine a world where the lines between factual news and satirical content blur almost imperceptibly. In the deluge of information, audiences often find it challenging to distinguish between genuine news stories and those crafted with prank strategies. The result? A potential breeding ground for misinformation, where facts and fabrications intermingle freely.

News pranking thrives on engagement and the allure of clickbait. By sensationalizing headlines and amping up the drama, content creators draw in more clicks, shares, and likes. This, in turn, fuels the virality of pranked news stories, driving conversations and discussions across the digital realm. However, this intriguing evolution of news delivery poses its own set of dilemmas, especially in a nation like Nigeria

Journalistic integrity, a cornerstone of responsible reporting, faces a new set of challenges. News pranking often invites the infusion of personal opinions, biases, and perspectives, detracting from the objective nature of traditional journalism. This blending of news and commentary risks eroding the credibility of the information presented.

The trust that the public places in media institutions is under siege. As news pranking muddles the waters between reality and illusion, people might turn to less-than-reliable sources for information, deepening the already existing quagmire of misinformation.

This narrative of news pranking isn’t just a story; it’s a lesson and a reflection of the transformative power of digital platforms. It beckons us to rethink how we approach information, media, and society in a world where everyone can be a content creator:

Media literacy emerges as an indispensable skill in this era of news pranking. As individuals, we must equip ourselves with the tools to critically assess sources, discern truth from satire, and navigate the labyrinth of information.

The journalistic world, anchored in its principles of objectivity and verification, must adapt to this evolving landscape. By maintaining rigorous standards of responsible reporting, traditional media outlets can remain steadfast in the face of prank-driven competition.

The ongoing discourse about content regulation and ethical standards gains newfound urgency. Striking a balance between artistic expression and credible content is a delicate art that demands careful consideration, as misinformation becomes an ever-present threat.

Amidst this shifting landscape, the democratization of voices remains a vital narrative thread. While news pranking ushers in a diversity of perspectives and ideas, content creators bear the responsibility of weaving creativity and accuracy into a cohesive fabric that enriches public discourse.

In the grand tapestry of Nigeria’s digital sphere, news pranking is a vivid and complex thread. It’s a testament to the power of innovation and the need for tradition. As citizens, creators, and institutions embark on this uncharted voyage, the destination – a well-informed society where truth is paramount – remains the guiding star.

Pathway to Revitalization of the Education System: The Role of the New Student Loan Act 2023 in Nigeria

By
Dr. Adesola A. Ikudayisi
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0

In a bid for an inclusive education for all, in particular at the tertiary level, the Nigerian government heralds the Student Loan Act 2023. With a widespread consensus that education represents a critical component in the human capital development process, this initiative is a welcome development. However, advancement in the digital landscape is reshaping the educational space, which calls for a synergy of purpose for the successful delivery of mandates in this sector.

Productivity and economic prosperity of any nation are in tune with its level of technological development vis-à-vis the inherent innovation capability of its citizens, who, of course, reside across all tiers of educational level. However, this pathway to the supposed delivery has been hampered by poor funding, which is essential for equitable enrolment and learning in academic institutions. As a result, the new Student Loan Act is a positive step forward. The Student Loan (Access to Higher Education) Act, 2023, promises easy access to higher education for indigent Nigerians through interest-free loans from the Nigerian Education Loan Fund. A promise waiting for fulfilment in the minds of our tertiary students.

The Key Highlights from the Act

The Nigeria Education Bank Fund promises inclusive access to education at any public institution of higher learning in Nigeria with an equal right to access to qualified students without any discrimination arising from gender, religion, tribe, position, or disability of any kind. This minimizes the cost of tertiary education as the financial assistance will increase the enrolment of indigent students constrained by funds to pursue their higher education. Critical to the application procedure are certain terms and conditions inherent in a loan portfolio.

The eligibility criteria are that the applicant’s income or family income must be less than N500,000 per annum, while the guarantor system to access the funds includes civil servants of at least level 12 in the service, experienced lawyers, judicial officers, or justices of peace. Although inclusive literacy and advocacy with financial advice on educational matters for stakeholders (institutions of higher education, parents, and educational investors) are stated, a common platform to initiate this remains a question. The disbursement window period of within 30 days’ dictates a timely use of funds; provision for accountability in the terms of appropriation of applicants rules for disqualification (exam malpractice, fraud, criminal convictions, drug offenses, and the like) is established.

The student loan scheme offers proper monitoring of the academic records of grantees of the loans to obtain information on their year of graduation, national service, and employment and to ensure that grantees of the loans commence repayment of the loans as soon as they are due. The informed repayment process starts two years after the completion of the National Youth Service Corps program with a direct deduction of 10% of
the beneficiaries’ salary at source by the employer and credited to the Fund. Provisional defaulters are liable on conviction to a fine of N500,000, imprisonment for a term of two years, or both.

Appropriating the Act 2023 for long-term, sustainable delivery

Key aspect of this game-changing policy on higher education will increase the enrolment rate and foster inclusive learning. This provision encourages more individuals to pursue higher education, leading to an increase in the number of educated professionals across fields of study. Increased literacy in the nation through the tertiary educational system will also drive human capital development geared towards social and economic growth. Improved skilled professionals will deliver impact initiatives to drive sustainable economic growth and, subsequently, increase returns on quality education. The scheme promotes diversity and inclusivity within educational institutions, fostering a vibrant and enriched learning environment through sustainable access to funding.

However, a number of critical questions come to mind from the New Student Loan Act. Firstly, is there a chance of being gainfully employed afterwards for repayment purposes, and is there a specific limit to years of loan taking, even with students having extra years of study due to uncertainties? In another way, is the student loan fund a means to an end or an end in itself in the education ecosystem? What role will digital technology play in the application process for seamless operation within the fund management space? Although the disbursement process is underway, answers to these questions on the New Student Loan Act might be tailored into the amendment process for long-term delivery. Meanwhile, as a way of thinking, considering the high unemployment rate in the country, are there any prospects for innovation and entrepreneurship to scale startups and spinouts in tertiary institutions towards meeting loan repayment periods?

I suggest revitalization of the educational system for long-term human capital development should focus on innovation-centered interventions. A cursory look at digital advancement shows that technology and innovation play a pivotal role in transforming the educational landscape. For instance, support for edTech initiatives presents innovative digital tools and platforms, enhancing teaching methods and enriching the out-of-classroom learning experience.

This support can also incorporate interactive multimedia, robotics, and artificial intelligence (AI) into the educational curriculum, fostering engagement, critical thinking, and creativity among students. Investment in science, technology, engineering, and mathematics (STEM) has enormous opportunities and closely connects all fields of study across all tiers of education (primary, secondary, and tertiary). Aside from this fact, the addition of another acronym, I-innovation, (STEMI) thus suggests the strategic position of innovation as a propelling force towards an inclusive educational sector. The perception should complement the ultimate goals of the new Student Loan Act.

In conclusion, the Student Loan Act of 2023 presents a catalyst for an inclusive tertiary education ecosystem. There is a need to factor in technological and innovation enhancement strategies needed for sustained growth, which are critical to the loan scheme’s long-term viability. Appropriating the identified gaps will enable students from all backgrounds to leverage technology for research, collaboration, and skill development, bridging the digital divide and promoting the human capital and economic development that the educational sector upholds.

Telecom Operators in Nigeria Generated A Total of N53.6 Billion From SMS in 2022

By
Ojukwu Emmanuel
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0

Data from the Nigerian Communications Commission (NCC), revealed that telecommunications operators in Nigeria, comprising MTN, Airtel, Glo, 9Mobile, and Smile Communications, generated a total of N53.6 billion from SMS in 2022.

The NCC disclosed that a total of 14.08 billion text messages were sent by subscribers on all the networks in 2022. At a fixed rate of N4.00 per SMS, this amounts to approximately N56.3 billion for the operators.

NCC data also reveals a significant 48.8% surge in the number of text messages exchanged by subscribers last year. This surge saw an increase from 9.46 billion SMS in 2021, to an impressive 14.08 billion in 2022.

Correspondingly, the volume of text messages received experienced an 11.06% boost to reach 11.8 billion, ultimately culminating in a combined tally of 25.9 billion SMS sent and received during the year.

Check Out NCC Data Insights on How Each Telecommunications Company Performed

MTN stood as the leader, recording the largest number of SMS sent and received locally within the year. The number of SMS sent and received on the telco’s network stood at 8.3 billion and 8.7 billion respectively. The company raked in N33.3 billion from the messages sent.

Globacom occupied the second position with 3.6 billion SMS sent over its network, amounting to N14.5 billion and 777.2 million received in 2022.

The third largest operator by subscriber number, Airtel, recorded 1.8 billion sent messages at N7.5 billion and 2 billion messages received.

On 9 Mobile, the total SMS sent on the network in 2022 stood at 234.8 million (N93.9 million) while a total of 235 million messages were

received.

Smile Communications recorded the least SMS count, as 173,607 (N694,428) messages were sent and 766,588 received on the network in the year under review.

As regards international SMS, all the operators recorded a total of 518.9 million in international SMS in 2022. This comprised 59.5 million sent messages and 459.3 million received SMS.

With the proliferation of Over The Top (OTT) services such as WhatsApp, Facebook Messenger, Telegram and other messaging platforms, telecom operators in Nigeria have expressed concern over the decline in revenue from calls and SMS.

The rise of these social media platforms and messaging apps, has indeed changed the way people communicate, and this shift has had an impact on traditional SMS usage and pricing.

As people have increasingly turned to these platforms, the demand for SMS has declined. This change in communication habits has led to some adjustments in SMS pricing and plans by telecommunications providers in some regions.

However, industry analysts noted that while the rate at which telecom subscribers use SMS might have reduced due to the embrace of OTTs, its use cannot be completely taken over by the free messaging platforms.

Despite the rise of messaging apps, SMS remains relevant for various purposes, such as sending messages to individuals without internet access, and sending and receiving verification codes, amongst other uses.

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