Once upon a time, specifically before 2020, private companies in Nigeria were required by the Companies and Allied Matters Act 1990, LFN 2004 (“CAMA 1990″), to have at least two shareholders. This position was amended with the passing of the Companies and Allied Matters Act 2020 (“CAMA 2020”), which allows a private company to be registered using a single shareholding structure, i.e., one shareholder.
However, the Corporate Affairs Commission (the “CAC”) in implementing this provision rejected applications by companies registered under CAMA 1990 to reduce the number of their shareholders to one.
One of such rejections resulted in an applicant suing the CAC for wrongful interpretation of the provision and requesting the court to decide accordingly. In a recent ruling, the Federal High Court clarified that all private companies, whether registered under CAMA 1990 or CAMA 2020, can transition to a single shareholding structure so long as it is done in compliance with CAMA 2020’s provisions.
We have provided a detailed overview of the ruling, what this means for pre-CAMA 2020 registered private companies, and recommended next steps. You can access it by clicking the download button below.
For further guidance on changing to a single shareholding structure or to address any questions or concerns, please reach out to us at team@tlpadvisory.com.