When a Nigerian company issues new shares, the Companies and Allied Matters Act 2020 (CAMA 2020) requires that a return of allotment be filed with the Corporate Affairs Commission within 15 days of the date of allotment. That deadline was shortened from one month to 15 days by the Business Facilitation (Miscellaneous Provisions) Act 2023. Miss that window and the company faces penalties — and shareholders may have grounds to dispute whether the allotment was validly completed. Here is what founders and company secretaries need to understand before they sign anything.
What triggers the obligation
Section 154 of CAMA 2020 sets the rule: every company that allots shares must deliver a return of allotment to the CAC. The trigger is the allotment itself — not the receipt of consideration, not the board resolution, not the issuance of share certificates. The moment the board passes a resolution allotting specified shares to specified persons, the 15-day clock starts.
Common scenarios that trigger section 145 include:
- Equity fundraising rounds — seed, angel, or Series A transactions where new shares are issued to investors.
- Conversion of convertible instruments — when a SAFE or convertible loan note converts into equity, the resulting allotment must be returned.
- Employee share schemes — allotments made under an approved employee share option plan, even in tranches.
- Capitalisation issues — bonus shares issued by capitalising reserves or retained earnings.
- Non-cash consideration allotments — shares issued in exchange for intellectual property, assets, or services rather than cash.
Each of these events is a separate allotment requiring a separate return. There is no aggregating multiple allotment rounds into a single filing unless they occur on the same date by the same resolution.
CAC Form 2.3 — what it is and what it is not
Form CAC 2.3 (Return of Allotment of Shares) is the prescribed instrument for this filing under the CAC's electronic filing portal. Founders often confuse it with two adjacent documents: the board resolution allotting shares and the members' register update. All three are needed, but they are distinct.
The board resolution records the decision. The register update is an internal company record. Form CAC 2.3 is the statutory notification to the regulator — the mechanism by which the CAC learns that your authorised share capital has been partly (or fully) taken up. Without it, the CAC's records show no change in your shareholding structure.
Form CAC 2.3 captures:
- The date of allotment
- Full names, addresses, and email contacts of each allottee
- The class and number of shares allotted to each person
- The nominal value per share and the consideration paid
- Whether consideration is cash or non-cash (and if non-cash, a description of the asset)
- The total consideration received and the total amount paid up
The form must be signed by a director and the company secretary (or a sole director where applicable), and submitted through the CAC's online portal at cac.gov.ng.
The 15-day deadline under CAMA 2020 as amended
Section 154(1) of CAMA 2020, as amended by the Business Facilitation (Miscellaneous Provisions) Act 2023, states the return must be delivered to the CAC within 15 days after the date of the allotment. This is a hard statutory deadline, not a directory provision. The CAC does not have discretion to accept an out-of-time return as if it were made on time.
Calculating the 15 days is straightforward: day zero is the date of the board resolution, and day 15 is the final day for filing. If day 15 falls on a public holiday or weekend, practitioners generally file by the last business day before — the CAC's portal does not have a formal "deemed next business day" rule, and relying on a weekend extension is risky.
The 15-day window is tight in practice. Founders who close a funding round on a Friday, then spend several days finalising the shareholders' agreement and updating the cap table, can find themselves with less than two weeks to gather allottee KYC documents, obtain the e-stamp certificate from FIRS, and upload to the portal. Build the filing timeline into your transaction timetable from day one.
Stamp duty on allotment
Under the Stamp Duties Act (Cap. S8, Laws of the Federation of Nigeria 2004, as amended by the Finance Act 2020), instruments relating to share allotments are subject to stamp duty. For cash allotments, stamp duty is charged at 0.75% of the consideration or the nominal value of the shares, whichever is higher. The Finance Act 2019 and Finance Act 2020 updated the administration of stamp duty, shifting electronic instruments into the FIRS e-stamp regime.
For non-cash allotments, the consideration is the fair value of the asset, intellectual property, or service delivered. The parties must agree on an arm's-length valuation — auditor-certified or supported by an independent valuer's report. The stamp duty is computed on that agreed consideration. Where the parties fail to document the non-cash consideration properly, the CAC may query the filing or the FIRS may assess duty at a value they determine.
Stamp duty must be paid and the CAC 2.3 must carry the relevant duty particulars before the return is accepted as complete. In practice, many practitioners obtain the e-stamp certificate from FIRS and attach evidence of payment to the portal submission.
How the share allotment resolution and CAC 2.3 interact
The board resolution is the source document. It should clearly state:
- The authority under which shares are being allotted (usually the memorandum of association and articles, or a shareholders' resolution for allotments beyond existing authorised limits)
- The names of the allottees, the number and class of shares allotted, and the consideration
- Instructions to the company secretary to file the return of allotment
CAC Form 2.3 then extracts the same information and presents it in the prescribed statutory format. The two documents must be consistent — any discrepancy between the resolution and the form (e.g., wrong number of shares or a misspelled allottee name) will cause the CAC to raise a requisition and delay registration.
Where an allotment is conditional — for instance, subject to regulatory approval or the satisfaction of a condition precedent — the date of allotment is the date the condition is satisfied and the board formally declares the allotment complete, not the date of the conditional resolution.
Effect of late filing on validity
Late filing does not, in itself, invalidate the allotment. Section 154 of CAMA 2020 does not state that an unregistered allotment is void. The allotment takes effect as between the company and the allottee at the moment the resolution is passed and communicated. The allottee becomes a member from that point.
What late filing does trigger:
- Pecuniary penalties — the CAC imposes late filing fees that escalate with time. Companies and officers can be liable to a fine for each day the default continues beyond the 60-day period.
- Practical difficulties — downstream transactions (share transfers, further allotments, investor due diligence) become complicated when the CAC register does not reflect current shareholding. Banks, investors, and counterparties check the CAC register. A discrepancy creates friction.
- Regulatory scrutiny — repeated or extended defaults can attract CAC investigation of a company's overall compliance posture.
The CAC does accept late returns but charges the applicable penalties on filing. Companies should file promptly even if late, rather than deferring further.
Non-cash consideration: documentation requirements
When shares are issued for non-cash consideration — say, a co-founder is allotted shares in exchange for intellectual property or sweat equity — the CAC requires sufficient description of the property and its agreed value on Form 2.3. The CAC may request supporting documentation, including:
- A valuation report from a registered valuer or auditor
- A description of the intellectual property (patent numbers, trade mark registrations, or a summary of the know-how being transferred)
- An agreement evidencing the transfer of the asset
The Finance Act 2020 reinforced the FIRS's power to review the stated value of non-cash consideration for stamp duty purposes. Underdeclaring the value to reduce duty is an exposure worth avoiding.
Practical steps for company secretaries
Filing a clean return of allotment on time requires coordinating several parties. A workable sequence:
- On the date the board resolution allots shares, note the filing deadline in the company's compliance calendar.
- Collect full KYC for each allottee — name exactly as on government-issued ID, residential address, email, and nationality.
- Where shares are allotted for non-cash consideration, commission or finalise the valuation.
- Compute stamp duty and pay through the FIRS e-stamp portal.
- Prepare Form CAC 2.3 consistently with the board resolution.
- Upload through the CAC online portal, attach the board resolution and evidence of stamp duty payment.
- After the CAC accepts the filing, update the company's register of members to reflect the new shareholders.
- Issue share certificates to the allottees.
For companies preparing the underlying documentation, forms-legal.com has a return of allotment template for Nigerian companies that guides you through the required fields under CAMA 2020.
Key deadlines and figures at a glance
| Item | Detail | |---|---| | Statutory deadline | 15 days from date of allotment (CAMA 2020, s.154, as amended by Business Facilitation Act 2023) | | Filing portal | cac.gov.ng (CAC e-filing) | | Stamp duty — cash allotment | 0.75% of consideration or nominal value (whichever is higher) | | Stamp duty — non-cash allotment | 0.75% of agreed fair value of consideration | | Late filing consequence | CAC penalty fees; allotment remains valid between parties |
Common errors that generate CAC requisitions
Inconsistent names. The allottee's name on Form 2.3 must match the name on their government ID and on the board resolution. A middle-name discrepancy will prompt a requisition.
Wrong date of allotment. Using the date of the shareholders' agreement or the date of payment rather than the date of the allotting resolution is a frequent mistake. The resolution date governs.
Missing stamp duty documentation. Submitting the form before the e-stamp certificate is obtained delays acceptance.
Inadequate description of non-cash consideration. "Services rendered" is insufficient. The CAC expects specifics — what services, what agreed value, any supporting documentation.
Failure to confirm increase in issued capital. After the allotment return is accepted, the company's issued share capital changes. The next annual return must reflect the updated capital position; failure to update the annual return creates a compound compliance gap.
Founders who understand these requirements from the outset of a funding round avoid the scramble that often follows a poorly documented allotment — and keep the company's CAC record in the state that investors and acquirers expect to see it.
Need the document itself? Download the free template →
This article is general information, not legal advice — see our accuracy & editorial policy. Confirm the cited law is current before relying on it.