Shareholders Agreement Sample Pdf Nigeria

SHAREHOLDERS AGREEMENT SAMPLE PDF NIGERIA

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1. DOCUMENT PREAMBLE & RECITALS

THIS SHAREHOLDERS AGREEMENT (the "Agreement") is entered into and made effective as of this _____ day of _____________, 20 (the "Effective Date"), by and between:

1. [Company Name], a private company incorporated under the laws of the Federal Republic of Nigeria, with its registered office situated at [Registered Office Address] (hereinafter referred to as the "Company", which expression shall where the context so admits include its successors-in-title and assigns); of the first part;

2. [Shareholder 1 Name], of [Residential/Registered Address] (hereinafter referred to as "[Shareholder 1 Short Name]", which expression shall where the context so admits include its successors and permitted assigns); of the second part; and

3. [Shareholder 2 Name], of [Residential/Registered Address] (hereinafter referred to as "[Shareholder 2 Short Name]", which expression shall where the context so admits include its successors and permitted assigns); of the third part.

(The Company, [Shareholder 1 Short Name], and [Shareholder 2 Short Name] are hereinafter collectively referred to as the "Parties" and individually as a "Party").

WHEREAS:

A. The Company was incorporated on [Date of Incorporation] under the Companies and Allied Matters Act (CAMA) [CAMA 2020 / relevant year] with the Registration Number (RC Number) [RC Number] with an authorized and issued share capital of [Insert Share Capital Structure, e.g., 10,000,000 Ordinary Shares of ₦1.00 each].

B. The Shareholders are the legal and beneficial owners of the issued shares of the Company in the proportions set forth in Schedule A of this Agreement.

C. The Parties wish to define their respective rights, obligations, and relationship as shareholders of the Company, and to provide for the orderly management, operation, and governance of the Company, as well as regulate the transfer of shares and other operational matters in accordance with Nigerian law.

NOW, THEREFORE, IT IS HEREBY AGREED by and between the Parties hereto as follows:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, except where the context otherwise requires, the following terms shall have the meanings ascribed to them below:

1. "Act" means the Companies and Allied Matters Act (CAMA) [CAMA 2020], as amended from time to time, and any statutory reenactment thereof.
2. "Board" or "Board of Directors" means the Board of Directors of the Company constituted from time to time in accordance with this Agreement and the Articles of Association.
3. "Business Day" means a day (other than a Saturday, Sunday, or official public holiday declared by the Federal Government of Nigeria) on which commercial banks are open for general business in Lagos, Nigeria.
4. "Confidential Information" means all information relating to the business, finances, technology, trade secrets, intellectual property, customers, and operational strategies of the Company disclosed by one Party to another.
5. "Defaulting Shareholder" has the meaning ascribed to it in Clause 4.1 of this Agreement.
6. "Encumbrance" means any mortgage, charge, pledge, lien, hypothecation, security interest, encumbrance, option, pre-emptive right, right of first refusal, or third-party claim of any kind whatsoever.
7. "Fair Market Value" means the price at which a share would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, as determined by an independent certified auditor appointed jointly by the disputing Parties.
8. "Force Majeure" means any event beyond the reasonable control of the affected Party, including acts of God, war, insurrection, civil commotion, strikes, pandemics, or governmental restrictions arising under Nigerian law.
9. "Holding" or "Shares" means the fully paid ordinary shares in the capital of the Company held by a Shareholder from time to time.
10. "Nigerian Law" means any Act, law, subsidiary legislation, decree, or constitutional provision in force within the Federal Republic of Nigeria.
11. "Non-Defaulting Shareholder" has the meaning ascribed to it in Clause 4.2 of this Agreement.
12. "Transfer" includes any sale, assignment, gift, bequest, declaration of trust, mortgage, pledge, or encumbrance of any share or interest therein, whether voluntary or involuntary by operation of law.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Governance and Board Composition

1. The management and control of the Company shall be vested in the Board of Directors.
2. The Board shall consist of a maximum of [Number] Directors. Each Shareholder holding not less than [Percentage]% of the issued shares of the Company shall be entitled to nominate [Number] Director(s) by notice in writing to the Company.
3. The Chairman of the Board shall be nominated by [Shareholder Name], but shall not have a casting vote in the event of a deadlock.

3.2 Capital Contributions and Funding

1. The Shareholders shall contribute capital to the Company in proportion to their respective shareholding percentages set forth in Schedule A, as and when called upon by the Board to meet the working capital requirements of the Company.
2. If any Shareholder fails to provide its proportional share of capital calls within [Number] Business Days of notice, the non-defaulting Shareholders may advance the required sum as a shareholder loan bearing interest at the Central Bank of Nigeria (CBN) monetary policy rate plus [Number] percent per annum.

3.3 Restriction on Transfer of Shares

1. No Shareholder shall sell, assign, transfer, pledge, or otherwise dispose of any Shares in the Company, except in strict compliance with the provisions of this Agreement and the Articles of Association of the Company.
2. Right of First Refusal: If a Shareholder (the "Transferor") wishes to transfer any Shares, they shall first offer such shares in writing to the other Shareholders (the "Offeree Shareholders") pro-rata to their existing shareholdings, at the same price and on the same terms offered by a bona fide third-party purchaser.
3. The Offeree Shareholders shall have [Number] days from receipt of the transfer notice to accept the offer in whole or in part.

3.4 Representations and Warranties

Each Shareholder severally represents and warrants to the other Parties that:

1. It has the full legal capacity, power, and authority to enter into and perform its obligations under this Agreement.
2. The execution and delivery of this Agreement do not violate any provision of Nigerian law, its constitutional documents, or any contract to which it is a party.
3. Its shares in the Company are free and clear of any Encumbrances whatsoever.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Events of Default

A Shareholder shall be deemed to be in default under this Agreement (a "Defaulting Shareholder") if:

1. It commits a material breach of any term, condition, or obligation under this Agreement or the Articles of Association and fails to remedy such breach within thirty (30) business days of receiving a written notice specifying the breach from a Non-Defaulting Shareholder.
2. An order is made, or an effective resolution is passed, for the winding up, liquidation, or insolvency of the Shareholder (other than for a voluntary amalgamation or reconstruction).
3. Execution or distress is levied on any substantial part of its assets, or it becomes unable to pay its debts as they fall due within the meaning of the Act.

4.2 Remedies upon Default

1. Upon the occurrence of an Event of Default, the Non-Defaulting Shareholder(s) may, by notice in writing to the Defaulting Shareholder, elect to exercise any of the following remedies:
   • Compulsory Purchase: Require the Defaulting Shareholder to sell all (but not less than all) of its Shares to the Non-Defaulting Shareholder(s) at a price equal to [Percentage, e.g., 80%] of the Fair Market Value or the nominal value of the shares, whichever is lower.
   • Suspension of Rights: Suspend the Defaulting Shareholder’s voting rights at Board and general meetings and withhold any dividend distributions until the default is fully remedied.
   • Injunctive Relief: Seek specific performance or injunctive relief in a court of competent jurisdiction to compel compliance with terms.

4.3 Termination

This Agreement shall terminate automatically upon the occurrence of any of the following events:

1. The written agreement of all Shareholders to terminate this Agreement.
2. The winding up, liquidation, or dissolution of the Company pursuant to the Act.
3. The acquisition of all issued shares of the Company by a single entity or person.

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5. BOILERPLATE LEGAL PROVISIONS

5.1 Governing Law and Jurisdiction

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the Federal Republic of Nigeria, without regard to its conflict of laws principles.

5.2 Dispute Resolution

1. Any dispute, claim, or difference arising out of or relating to this Agreement, including its formation, breach, termination, or validity, shall be settled amicably through good-faith negotiations between the disputing Parties within fourteen (14) Business Days of a written dispute notice.
2. If the dispute cannot be resolved amicably within the stipulated period, it shall be referred to arbitration in Lagos, Nigeria, before a single arbitrator to be appointed jointly by the Parties (or, failing agreement within seven days, by the Chairman of the Chartered Institute of Arbitrators, UK, Nigeria Branch).
3. The arbitration proceedings shall be conducted in English in accordance with the Arbitration and Mediation Act [2023] (or any statutory modification thereof). The award of the arbitrator shall be final and binding on the Parties.

5.3 Severability

If any provision of this Agreement is found by a court or tribunal of competent jurisdiction to be invalid, illegal, or unenforceable, that provision shall, to the extent required, be deemed severed from this Agreement and rendered ineffective without modifying the remaining provisions, which shall continue in full force and effect.

5.4 Entire Agreement

This Agreement, together with the Schedules hereto and the Articles of Association of the Company, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings, and representations, whether oral or written.

5.5 Force Majeure

If any Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, that Party shall give prompt written notice to the other Parties. The obligations of the affected Party shall be suspended during the continuance of the Force Majeure event, provided that the affected Party uses all commercially reasonable efforts to overcome the operational impediment.

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6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have caused this Shareholders Agreement to be duly executed by their authorized representatives as of the Effective Date first above written.

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THE COMPANY:

[Company Name]

By: _____________________________________
Name: [Signatory Name]
Title: [Director / Company Secretary]
Date: ___________________________________

In the presence of:
Signature: ______________________________
Name: _________________________________
Address: _______________________________
Occupation: ____________________________

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SHAREHOLDER 1:

[Shareholder 1 Name]

By: _____________________________________
Name: [Signatory Name]
Title: [Managing Director / Authorized Signatory]
Date: ___________________________________

In the presence of:
Signature: ______________________________
Name: _________________________________
Address: _______________________________
Occupation: ____________________________

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SHAREHOLDER 2:

[Shareholder 2 Name]

By: _____________________________________
Name: [Signatory Name]
Title: [Managing Director / Authorized Signatory]
Date: ___________________________________

In the presence of:
Signature: ______________________________
Name: _________________________________
Address: _______________________________
Occupation: ____________________________

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SCHEDULE A: SHAREHOLDING STRUCTURE