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Minority Protection in CAMA 2004

The document discusses minority protection under the Companies and Allied Matters Act 2004 (CAMA) in Nigeria. It outlines that Section 300 of CAMA allows minority shareholders to bring actions to restrict companies from illegal, ultra vires, or fraudulent acts that violate their rights or benefit directors. These include injunctions to prevent transactions, enforcement of special resolutions, or addressing actions that affect individual shareholder rights. Minority protection actions are personal, representative, or derivative in nature.

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59 views7 pages

Minority Protection in CAMA 2004

The document discusses minority protection under the Companies and Allied Matters Act 2004 (CAMA) in Nigeria. It outlines that Section 300 of CAMA allows minority shareholders to bring actions to restrict companies from illegal, ultra vires, or fraudulent acts that violate their rights or benefit directors. These include injunctions to prevent transactions, enforcement of special resolutions, or addressing actions that affect individual shareholder rights. Minority protection actions are personal, representative, or derivative in nature.

Uploaded by

David O
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

MINORITY PROTECTION UNDER CAMA 2004

• It is the manifestation and crystallization of


this right to institute an action on company’s
behalf that substantially deals with the issue
of minority protection.
• The essence of this process is expressly
captured in Sect 300 of CAMA, along with the
other associated provisions which ensure that
the parties construe the process in its
appropriate context.
Essentials of Minority Protection
• In the appropriate circumstances, any member
may bring an application by way of injunctions
or declaration to restrict the action of the
company in certain respects. See CAMA, Sect.
300, 303-308 and 310-312)
• This restriction is done in view of the general
legal requirement that the company is bound
to comply with the substance and intendment
of its registered objects and articles.
Essentials of Minority Protection(contd.)

• Thus, Sect. 300 of CAMA, expressly provides


for the restriction of the company by any
member in the following instances:
(1) Entering into any transaction which is illegal
or ultra-vires;
(2) Purporting to do by ordinary resolution any
act which it constitution stipulates should be
done by special resolution;
Essentials of Minority Protection(contd.)

• Any act or omission affecting the applicant’s


individual rights as a member;

• Commission of fraud on the company or


minority shareholders where the directors fail
to take appropriate action to redress the
wrong;
• Where a meeting cannot be called in time and
is of no practical use to redress the wrong
done to the company or minority shareholder;
• Where the directors are likely to derive a
profits or have profited or benefited from
their negligence or breach of duty.
Classes of minority protection actions

• Personal Action
• Representative Action
• Derivative Action

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