There are various ways a person can become member of a company in Nigeria. Companies and Allied Matters Act regulates company activities in Nigeria and ways a person can become a member of a company.
S. 79 of CAMA defined to include (1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.
(2) Every other person who agrees in writing to become a member of a company, and whose name is entered in its register of members, shall be a member of the company.
Thus, a member of a company is a person who has subscribed to the memorandum of the company or any person who has agreed in writing to become a member of the company and whose name is entered in the register of members
1. Membership by subscription only available to the first subscribers, promoters. First members of a company acquire their membership by subscription, that is by signing the Memorandum and Articles of the company.
2. By Allotment and being placed on the register of members.-S.125&129. Allotment is the application for shares in a company by desirous members of the public. The company (board of directors) where it accepts the offer will allot shares to the person within 42 days via letter of allotment: s125(1) CAMA. Within 2 months after allotment, issue a certificate of allotment: s146(1). Then your name has to be written in the register of member. The power to allot shares is vested in the company, which can delegate same to the Board of Directors. S. 124 of CAMA.
The shares allotted by a company must not exceed the authorised share capital of the company.
3. Transfer of shares (SALE) from existing shareholders and being placed on the register of members.-S.151&152 CAMA. This is where a shareholder of a company will alienate his interest in his shares to another. Private company restricts the transfer of its shares: S. 22(2) of CAMA.
Assignment of shares held in a company by the holder of the shares called transferor or to another person with whom agreement has been reached known as the transferee as gift or with consideration. Upon the transfer, steps are taken to register the transfer with the company so that the name of the transferor is substituted with the name of the transferee: s152, a part of the shares held by a member may be transferred. New share certificate for transferee: 3 months (s146(1))
Rectification of the register of members
S90 CAMA rectification of the register of members
The transferee should first notify the company that he is the holder of the share in question. Where the company does not respond to the notification, the transferee may apply to the court (Federal High Court) for rectification of the register of members.
4. Transmission (INHERITANCE) i.e. by succeeding to the estate of a decreased, bankrupt member, and being placed on the register of members.-S.148&155 CAMA. Transmission of shares is an involuntary transfer by operation of law occurring on the death or bankruptcy of a member and subject to the conditions in section 155(3) of the CAMA.
Section 156 CAMA: Protection of beneficiary: When shares are given to personal representative, the beneficiary should file an affidavit of interest with the registrar of the company. Registrar will inform the beneficiary if the personal representative tries to sell the shares without the beneficiary’s notice (i.e. whenever the personal representative wants to deal with the shares)
WHO CAN BE A MEMBER OF A COMPANY.
S. 20 CAMA Subject to subsection (2) of this section, an individual shall not join in the formation of a company under this Act if- (a) He is less than eighteen years of age; or
(b) He is of unsound mind and has been so found by a court in Nigeria or elsewhere; or
(c) He is an undercharged bankrupt; or
(d) He is disqualified under section 254 of this Act from being a director of a company.
(2) A person shall not be disqualified under paragraph (a) of subsection (1) of this section, if two other persons not disqualified under that subsection have subscribed to the memorandum. Thus an infant may become a member of a company, provided that there are two other adults members subject to no legal disability.
NB: Aliens can also be members of a company in Nigeria. A company may take shares and become a member of another company and be attending the meetings of the other company by a representative authorised by resolution of its directors: section 231 of the CAMA.