HOW TO BECOME A MEMBER OF A COMPANY IN NIGERIA

Membership of a Company in Nigeria is governed by the Company and Allied Matters Act (CAMA).See: Osisanya v. Afri Bank (Nig.) Plc (2007) 6 NWLR (Pt.1031) 565 (SC). Section 79(1) and (2) of the Act defines membership of a Company to include:

(a)     The subscribers of the Memorandum of the Company, who are deemed to have agreed to become members of the Company and on its registration shall be entered as members in its register of members, and

(b)     Every other person who agrees in writing to become a member and whose name is entered in its register of members. Section 79(3) stipulates that in the case of a company having a share capital, each member shall be shareholder and shall hold at least one share.

             See: Berliet Nig. Ltd. v. Francis (1987)2 NWLR (Pt. 58) 673

How to Become A Member:

In a company registered with a share capital, whether limited or unlimited, membership can be acquired by subscribing the memorandum (section 79), by allotment and registration (section 125) and by transfer (section 151) or transmission (section 155) followed by registration of the transferee in the register of members. 

However, in the case of a company not registered with a share capital, but registered as  a company  limited by guarantee, the membership may be acquired by subscription and by an undertaking to contribute to the assets of the company in the event of its being wound up.

Subscription: The subscribers are persons who sign the memorandum of association and articles of association of a company. They must together subscribe to shares amounting in value to at least 25% of the authorized share capital (section 27(2)(b)). On the registration of the company, the subscribers are deemed to have agreed to become members and their names must be put on the register of members.

Allotment: This is the allocation of a specified number of shares of a company to an applicant. Upon receipt of an application, a company shall where it wholly or partially accepts the application, make an allotment to the applicant and within 42 days notify the applicant of the fact of the allotment and the number or shares allotted to him (section 125(c)).

Transfer: The shares or other interest of a member in a company are property transferable in the manner provided in the articles of the Company (section 115). A person may become a member of a company by having the shares of that company transferred to him by the holder of those shares.By virtue of section 151(4) CAMA any member of any company may transfer all or any of his or her shares by an instrument in writing, in any usual or common form or any other form which the directors may approved, subject however to such restrictions in the company's articles of association.See Inyang v. Ebony (2002)2 NWLR (Pt. 751) 284

Transmission: The vesting of shares in the personal representatives on the death of a shareholder is known as transmission of shares rather than transfer. On the death of a member the survivor(s) where the deceased was a joint holder or the personal representative of the deceased where he was a sole holder, shall be the only persons recognized by the company as having any title to his interest in the shares (section 155(1)).

It is instructive to note that, a person does not become a member of a company until his or her name has been  entered in the company's register of members irrespective of the fact that such a person  is a shareholder in the company. See section 79 (1) and (2); Oilfield Supply Centre Ltd v. JL Johnson (No.2) (1987) 2 NWLR (Pt. 58) 625

HOW TO BECOME A MEMBER OF  A COMPANY IN NIGERIA is a legal illumination of AKINTUNDE ESAN known as The LEGAL ADVISER ONLINE. Akintunde Esan is the Managing Partner & Principal Consultant @ ASE OLODUMARE CHAMBERS (Legal Practitioners/Consultants & Chartered Mediators)