- 5 Marks
Question
Halidu holds one million shares in Realshares Nigeria Plc. Zaidi, his son, has just returned from the University of Basel because he could not pay school fees. Halidu is cash-strapped and wants to know whether he could transfer his shares to someone else to raise money to pay the fees.
Required: Advise Halidu, stating the statutory conditions by which he could transfer his shares. (5 Marks)
Answer
Halidu holds the right to transfer his shares unless there are restrictions in the Articles of Association. According to Section 22(2) of the Companies and Allied Matters Act (CAMA), every private company must restrict the transfer of shares by its Articles.
Advice:
Halidu can transfer his shares by executing a proper instrument of transfer, accompanied by the share certificate. The transfer should be submitted to the company for registration. However, if the Articles impose restrictions, he must adhere to those conditions.
- Tags: Business Law, Company Law, Share Transfer
- Level: Level 1
- Topic: Company Law
- Series: MAY 2012
- Uploader: Theophilus