Return of Allotment (Nigeria)

A Return of Allotment in Nigeria reports the figures a taxpayer must declare so the correct liability can be assessed.

CAMA 2020 replaced the Companies and Allied Matters Act 1990 (Cap C20, LFN 2004) and introduced significant reforms to Nigeria's corporate law framework, including the digitisation of CAC filings through the CAC's online portal (https://pre.cac.gov.ng), mandatory disclosure of beneficial ownership under Part F of CAMA 2020 (implementing the Financial Action Task Force (FATF) recommendations on corporate transparency), and the removal of the requirement for companies with share capital below a threshold to have a minimum paid-up capital.

The Return of Allotment must state: the date of the allotment; the number and class of shares allotted; the names, addresses, and allotment details of each allottee; the amount paid or due and payable on each share; and, where shares are allotted otherwise than for cash, particulars of the consideration. The CAC's Company Registry updates the company's share register and register of members upon filing, providing public notice of the shareholding structure.

Failure to file the Return of Allotment within one month of allotment is an offence under Section 177(4) of CAMA 2020, and every officer of the company in default is liable on conviction to a fine not exceeding NGN 50,000 for each day the default continues. The failure also prevents the allottee from being entered in the register of members, which may affect the allottee's right to vote, receive dividends, and participate in the affairs of the company.

The legal framework governing the Return of Allotment (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Return of Allotment (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.

A Return of Allotment is required under Section 177 of CAMA 2020 whenever a Nigerian company allots new shares, regardless of the size of the allotment or the consideration paid.

A Return of Allotment is needed when a private company limited by shares (Ltd) allots shares to a new investor as part of a seed, Series A, or growth equity fundraising. The filing updates the CAC register and confirms the investor's legal entitlement to the allotted shares, which is a condition precedent to the investor exercising shareholder rights.

A Return of Allotment is required when a company increases its share capital under Section 127 of CAMA 2020 and issues additional shares to existing or new shareholders. The allotment of the newly issued shares must be reported to the CAC within one month via Form CAC 2.1.

A Return of Allotment is needed when a company issues shares to employees under a staff share option scheme or equity incentive plan. Section 177 of CAMA 2020 applies to all allotments whether for cash or non-cash consideration, and employee share schemes must be documented and reported to the CAC.

A Return of Allotment is required when a foreign investor acquires shares in a Nigerian company through a new allotment (as opposed to a transfer of existing shares). The Securities and Exchange Commission (SEC) of Nigeria, under the Investments and Securities Act (ISA) 2007 and the SEC Rules and Regulations 2013, may also require separate notification where the transaction involves a public company or crosses the threshold for foreign direct investment notification.

A Return of Allotment is needed following a bonus issue (scrip issue) under Section 153 of CAMA 2020, by which a company capitalises reserves and issues free shares to existing shareholders in proportion to their existing holdings.

Parties in Nigeria should prepare a Return of Allotment (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Nigeria Return of Allotment (CAC Form CAC 2.1) must contain the following essential elements.

Company Identification: The company's full registered name, CAC registration number (RC number), and registered office address as maintained in the CAC register.

Date of Allotment: The exact date on which the board of directors resolved to allot the shares — typically the date of the board resolution authorising the allotment under Section 175 of CAMA 2020.

Number and Class of Shares Allotted: The number of shares allotted and their class (ordinary, preference, or other class as defined in the company's Articles of Association). Where multiple classes are allotted, each class must be separately reported.

Allottee Details: Full legal name, address, nationality, and occupation of each allottee. For corporate allottees registered under CAMA 2020, include the RC number and registered office address. For foreign allottees, state the country of incorporation and registration number in the country of origin.

Consideration: The amount paid per share (for cash allotments) or a description of the non-cash consideration and its valuation (for allotments for non-cash consideration, such as services, property, or intellectual property). Section 185 of CAMA 2020 restricts allotments of shares to public companies at a discount.

Post-Allotment Shareholding: Updated share register excerpt showing the allottees' pre-allotment and post-allotment shareholding, total issued share capital after the allotment, and directors' confirmation that the allotment was properly authorised.

Board Resolution: Attach the certified board resolution or ordinary resolution of shareholders authorising the allotment, confirming that the directors acted within their authority under the company's Articles of Association and Section 175 of CAMA 2020.

Officer Signature: The Return of Allotment must be signed by a director or company secretary registered with the CAC and filed electronically through the CAC online portal within one month of the allotment date to avoid the daily fine under Section 177(4) of CAMA 2020.

Stamp Duty on Allotment: Where shares are allotted for cash consideration, capital contribution stamp duty at 0.75% of the consideration is payable to the Federal Inland Revenue Service (FIRS) under the Stamp Duties Act (Cap S8, LFN 2004) as amended by the Finance Act 2020. An unstamped subscription agreement is inadmissible as evidence in any proceedings before the Federal High Court or State High Courts under Section 22 of the Stamp Duties Act.

Data Protection: Personal data about allottees collected in the Return of Allotment must be processed in compliance with the Nigeria Data Protection Act 2023 (NDPA 2023), administered by the Nigeria Data Protection Commission (NDPC). Section 24 of the NDPA 2023 requires a lawful basis for processing shareholder personal data. The company must maintain the register of members securely and disclose allottee data only as required under CAMA 2020 and CAC regulations.

Governing Law and Disputes: The Return of Allotment is governed by the Companies and Allied Matters Act 2020 (CAMA 2020) and administered through the Corporate Affairs Commission (CAC). Disputes concerning allotments — including oppression of minority shareholders — are adjudicated by the Federal High Court under Section 272 of the 1999 Constitution, with appeals to the Court of Appeal and the Supreme Court of Nigeria. The Securities and Exchange Commission (SEC Nigeria) has concurrent jurisdiction where the allotment involves a public company under the Investments and Securities Act (ISA) 2007. Forms-legal.com provides this template as a starting point for Nigeria-compliant corporate documentation.