Benue State University, Makurdi

An Examination of the Nature of the Rights of Shareholders under (The) Statutory Contract Created by Section 41 of the CAMA 2004

Clement Chigbo* and Anusionwu Jessica**

Abstract

In company law jurisprudence there is a special contract that has pervaded the issue of the nature of the rights of shareholders under section 41 of the Company and Allied Matters Act 2004. It is known as ‘Statutory contract’ or ‘Contract of membership’ under Nigerian company law jurisprudence while under the United Kingdom (UK) Companies Act 2006, it is known as ‘Statutory contract’ or ‘Corporate contract’. This Statutory contract is so important and fundamental to company law that it can be found in almost all the company legislations in common law jurisdictions; in the UK it can be found in section 33 of the Companies Act 2006 and, in the Bahamas, in section 11 of the Companies Act 1992. The central continuing theme of this article which is examined in this work is the effect of section 41 of the CAMA 2004 as it concerns the rights shareholders may exercise as a result of having a role to play in the management of a company (which is impari materia to section 33 of the UK’s Companies Act 2006). This article concludes that section 41 of the CAMA is a broader and more inclusive provision because it places an obligation to observe and perform the provisions of a company’s constitution (the memorandum and articles of association) as it relates to not only the company and its members (as section 33 of the UK's Companies Act dictates), but also the officers of the company while also accommodating outsider rights via section 41(3) of the CAMA 2004, contrary to English judicial precedents.

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