Legal Question in Business Law in Nigeria

What steps do we take to remove uninterested and inactive members (shareholders, directors) from a registered private company? Allotted shares have not been paid for, nor called, a director was involved in criminal activity abroad and delisted from the company, though Corporate Affairs Commission not yet informed.

Asked on 2/18/11, 11:52 pm

1 Answer from Attorneys

0 users found helpful
0 attorneys agreed

A shareholder who has been allotted a share in a company would cease to be a shareholder once the shares are deemed to be forfeited. This happens where shares allotted are not paid for by the allottee after calls are made, the directors in such instances may forfeit the shares of such a member.

A director may be removed in accordance with the Articles of Incorporation or his contract of appointment. However a company may by an ordinary resolution of which special notice is given remove a director before the expiration of his period of office notwithstanding anything in its articles or in any agreement between it and the director.

Notwithstanding the above, the office of a director will be deemed to be vacated if as required by the articles of association he does not hold a specified share qualification within 2months after his appointment, becomes bankrupt, becomes prohibited from becoming a director by reason of any order made by a court or convicted of a fraud in relation to the management of a company, becomes of unsound mind or resigns his office by notice in writing.

Bear in mind that there is no hard and fast rule for the removal of a shareholder/director as this will be dependent on the circumstance of each particular case and the provisions of the articles of association and or the terms of appointing the director.

Read more
Answered on 2/19/11, 8:11 am

Related Questions & Answers

More Business Law questions and answers in Nigeria

Looking for something else?

Get Free Legal Advice

88953 active attorneys ready to answer your legal questions today.

Business Law Legal Forms

Browse and download our attorney-prepared and up-to-date legal forms from $4.99

Find a Legal Form

Featured Attorneys

Anthony SmithLawSmithLee's Summit, MO
Rahul Manchanda, Esq.Manchanda Law Office PLLCNew York, NY
Glen AshmanAshman Law OfficeAtlanta, GA
Find An Attorney

Are you an Attorney?

Earn additional revenue and grow your business. Join LawGuru Now