REVIEW OF THE RIGHTS OF SHAREHOLDERS TO TRANSFER SHARES UNDER THE COMPANIES AND ALLIED MATTERS ACTS, 2020

Abstract

The Company’s Article of Association reserves the rights to determine how the shares of a company registered under the Companies and Allied Matters Acts 2020 are allotted or distributed among the shareholders. Despite the rights to transfer shares as contained in section 139 of the CAMA, the right to do so is not absolute, according to the Court in Okoya v Santilli. Where the court stated that shares are in the nature of personal property and are transferable in the manner allowed by the company’s Articles of Association and as contained in Section 22(2) of the CAMA 2020, where the company through its Article has the right to restrict and determine who shall be allotted despite meeting other qualifications and requirements. The question that must be asked at this juncture is what option is left for any stakeholder whose right to acquire shares has been denied? Though, restriction on the allocation of shares is not applicable under public companies but does it mean allocation or allotment of shares to members is automatic under public companies? This paper has however undertaken the review of the rights to transfer shares among the shareholders of companies and between the shareholders and different beneficiaries under wills.