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A Stock Agreement sets out the rules and conditions for buying, selling, or transferring company shares in Nigeria. It spells out how shareholders can trade their stock, what happens if someone wants to sell, and who gets first rights to buy available shares - protecting both the company and its investors under the Companies and Allied Matters Act.

These agreements typically include key provisions like share valuation methods, transfer restrictions, and exit procedures. For Nigerian businesses, especially private companies and startups, stock agreements help prevent unwanted third-party acquisitions and maintain control over who owns parts of the business. They work alongside the company's memorandum and articles of association to govern share ownership.

Use a Stock Agreement when bringing new shareholders into your Nigerian company or setting up clear rules for share transfers. This becomes essential when starting a business with multiple owners, accepting investments from venture capitalists, or creating employee stock ownership programs under CAMA guidelines.

Many Nigerian businesses implement stock agreements during company formation, before disputes arise. Having these rules in place prevents future conflicts over share sales, protects minority shareholders' rights, and maintains control over who can become an owner. It's particularly valuable when expanding ownership beyond the founding team or preparing for potential investor exits.

• Business Shares Agreement: The standard base agreement covering fundamental shareholder rights and obligations
• Share Profit Agreement: Focuses specifically on how profits and dividends will be distributed among shareholders
• Share Vesting Agreement: Used for gradual share ownership, common in startups and employee stock plans
• Phantom Equity Agreement: Provides profit-sharing benefits without actual share ownership
• Contract For Sale Of Shares In A Private Company: Specifically for transferring ownership in private Nigerian companies

• Company Founders: Create and sign Stock Agreements when establishing their business structure and defining ownership rights
• Corporate Lawyers: Draft and review agreements to ensure compliance with Nigerian corporate law and CAC regulations
• Shareholders: Both majority and minority shareholders bound by the agreement's terms for share transfers and voting rights
• Company Directors: Implement and enforce the agreement's provisions in day-to-day operations
• Venture Capitalists: Negotiate specific terms when investing in Nigerian startups
• Company Secretary: Maintains records and ensures proper execution of share-related transactions

• Company Details: Gather full legal names, registration numbers, and current shareholding structure
• Shareholder Information: Collect identification details and share allocation for all parties involved
• Share Terms: Define share classes, voting rights, and transfer restrictions clearly
• Valuation Method: Decide how shares will be valued for future sales or transfers
• Exit Provisions: Outline procedures for share sales, right of first refusal, and forced transfers
• CAC Requirements: Ensure compliance with Corporate Affairs Commission regulations
• Documentation: Prepare existing corporate documents and shareholder certificates for reference

• Parties and Recitals: Full legal names of company and all shareholders, with registration details
• Share Details: Clear description of share classes, quantities, and rights attached
• Transfer Restrictions: Rules for selling or transferring shares, including right of first refusal
• Valuation Mechanism: Agreed method for determining share value during transfers
• Pre-emptive Rights: Procedures for issuing new shares and existing shareholders' rights
• Dispute Resolution: Clear process for handling disagreements under Nigerian law
• Tag-Along Rights: Protection for minority shareholders during ownership changes
• Governing Law: Explicit reference to Nigerian law and CAMA provisions

A Stock Agreement differs significantly from a Stock Purchase Agreement in its scope and purpose. While both deal with company shares, they serve distinct functions in Nigerian corporate law.

• Timing and Duration: Stock Agreements are ongoing governance documents that set long-term rules for share ownership, while Stock Purchase Agreements are one-time transaction documents for a specific share sale
• Scope of Coverage: Stock Agreements cover multiple aspects of shareholding including voting rights, transfer restrictions, and management rights. Stock Purchase Agreements focus solely on the terms of a single purchase transaction
• Party Involvement: Stock Agreements bind all shareholders and the company, while Purchase Agreements typically involve just the buyer and seller
• Legal Framework: Under CAMA, Stock Agreements function as continuous corporate governance tools, whereas Purchase Agreements serve as transaction evidence for CAC filing and share transfer documentation