A person may become a member of a company:
(i)     By subscribing the memorandum of the company on its formation
(ii)    By making an application, allotment and registration
(iii)   By taking a transfer from an existing member followed by registration.
(iv)   By succeeding to shares on the death or bankruptcy of a member.
(v)    By obtaining share qualification, a condition that may be imposed on a director. The persons mentioned in (ii), (iii) and (iv) above do not actually become members until their names are entered in the register of members: section 79
Subscribers to the memorandum

The memorandum of a company about to be formed  must be subscribed by at least two persons and they must  take among them  a total number of shares  of a value of not less than twenty-five per cent of the authorised share capital:  section  27 (2)(b)
'The subscribers of a company's memorandum are deemed to have agreed to become members of the company and on its registration shall be entered as such in its register of members. Accordingly the company should, without allotment of the shares enter the names of the subscribers in the register of members as holders of their subscribers' shares.  They
may of course  apply for the allotment of additional shares  if they wish.
A subscriber of the memorandum who holds the whole or any part of the shares subscribed by him in trust for any other person shall disclose in the memorandum that fact and the name of the beneficiary. : section 27 (3)
By application, allotment and registration
A person may apply for membership directly or indirectly. He applies directly when he contacts the company. He applies indirectly where there has been a rights issue or a bonus issue on renounceable letters of allotment and the original allottee has renounced his entitlement in his favour.  A notification of allotment must be issued within 42 days of the date of allotment S.125(c).  An applicant also has the right at any time before allotment, to withdraw his application by written notice to the company: section 125(d).
An allotment of shares made and notified to an applicant in accordance with section 125 is
an acceptance by the company of the offer by the applicant to purchase its shares  and, unless rejected as provided above,  the contract takes effect  on the date on which  the allotment is made  by the company : section  126 and so, an acceptance cannot  be withdrawn after the acceptance: Re Zone Co. Ltd. (1962) LL.R. 160: (1962) All NLR. 196 Allotment of Shares Application for allotment of shares
The cardinal points of procedure to be followed on application for and allotment of shares are
As follows:
(a)        An application is usually made in writing by the completion of a form by the prospective shareholder addressed to the company, indicating the number of shares required.
The Directors,  
abc Ltd.  
I hereby apply For 600,000 ordinary shares of N1 each in the above Company at par and enclose my cheque for the sum of ……..  
I request you to allot me such number of share subject to the Memorandum and Articles of Association of the said Company. I hereby agree to accept the same or any· less number of shares on receiving notice of allotment.  
I hereby declare that I am resident in Nigeria and that I will not be acquiring the shares as nominee of any person or persons resident outside Nigeria or of any person who is not a Nigerian citizen or association.  
            Dated this ………………………………. day of. ……………………2009 
Usual Signature:  
Surname (in block letters):  
Other names:  

(b)    In the case of a public issue of shares, there shall be returned  to the company  a form of application  as prescribed  in the articles, but subject to any requirements prescribed  by the Securities  and Exchange  Commission, duly completed  and signed by the person wishing to purchase shares: section 125
(c)   The authority to allot shares  is vested  in the company which  may delegate it to the directors subject  to any conditions or directions that may be imposed by the articles  or from time to time by the company in general  meeting: section  124). See e.g.  Edokpolor & Co. Ltd. v. Sem-Edo Wire Ind. (1984) 7 S.C. 119.

(d)   Section 125(c) provides  that when the company receives the application, it shall, where it wholly or partially  accepts the application, make an allotment  to the applicant  and within 42 days after the allotment,  notify the applicant  of the allotment  and the number of shares allotted to him.
An allotment  of shares made and notified to an applicant  in accordance with section 125 is an acceptance  by the company of the offer by the applicant  to purchase  its shares and, unless rejected as provided above, the contract takes effect on the date on which the allotment  is made by the company : section 126)
Restrictions on allotment
There are no statutory  restrictions in respect of the power of private companies  to allot their shares except in a company where an alien participates. Their power to allot is, however, subject to any conditions  or directions  imposed by the articles or a resolution  of the company: section  124). It is necessary  that, prior to the allotment  the statutory  requirement of obtaining the authority  of the members  and pre-emptive rights contained in the memorandum or articles are complied  with.
Irregular  allotments  voidable
An allotment  made in contravention of any of the provisions  of the Act is voidable  and may be validated by the court : section  123. Even an allotment of shares made in bad faith by the directors  who had power to allot the shares is voidable  and not void and can be avoided  at the instance of the company  and no one else because it is a wrong done to the company;  but the company,  instead of avoiding  the allotment,  has the right to approve it. See Tikatore Press v. Abina (1973) 4 S.C. 63 Where the allotment  is made before the statutory  meeting,  it is voidable within one month after the meeting: section 128(1). If any director knowingly  contravenes  any provisions  of the Act as to allotment,  he will be liable to compensate  the company  and the allottee for any loss, damages  or costs which any of them may have sustained  or incurred thereby: section  128(2)).
Return of allotment
Whenever a limited liability company  makes an allotment  of its shares, the company must within one month thereafter deliver to the Commission for registration returns as provided by section 129. These are as follows:
(a)    a return of the allotments  (Form CAC 2) stating  the number  and nominal amount of the shares comprised  in the allotment, the names, address and description of the allottees  and the amount,  if any, paid or due and payable  on each share; and
(b)    in the case of shares allotted as fully or partly paid otherwise  than in cash
(i)    a contract in writing constituting the title of the allottee to the allotment together with any contract of sale, or for services or other consideration in respect of which that allotment was made, such contracts  being duly stamped;
(ii)    a return stating the number  and nominal  amount  of shares so allotted, the extent to which they are to be treated as paid-up,  and the consideration for which they have been allotted;  and
(iii)   particulars  of the valuation  of the consideration in accordance with section 137 of the Act, if any.
Call On shares
When  a company makes  an issue of shares,  they may be payable
(a)    In full, on application, although this is comparatively rare especially in the case of a public  issue
(b)   On application and allotment, for example, N 5 per share  on application and the balance  of N 10 per share on allotment, for N 15 share issued  at par.

(c)   By calls or instalments, for example,  a N 15 share issued  at par may be payable as follows:
1. N 5 per share on application;
2. N 5 per share on allotment; and
3.   The balance of N 5 by calls or instalments
The procedure  for making calls is regulated by section 133 provided that no call shall exceed one-forth of the nominal value of the share, or be payable at less than one month from the date of the last call: Section 133(1)
By transfer  followed  by registration
Subject  to rights of pre-emption on the transfer of shares  and the right reserved for directors to refuse  transfer, Shares  in a Private  Company Limited by shares  may be transferred from one person  to another  subject  to the Articles  of Association: section 115.
The transfer is by instrument of transfer and except  as expressly provided in the articles, transfer of shares shall be without restrictions: section 151(1)&(2)
Both the transferor and transferee execute the instrument of transfer but the transferor remains the shareholder until the name  of the transferee is entered in the register of section
Ferris George & sons Ltd. V. Khoury [1965] 1 All Nig. L.R. 91
Where  the Articles  do confer  rights of pre-emptions upon existing shareholders, it will be necessary to obtain  written  waivers from each shareholder if it is proposed to transfer shares to a person  other than an existing member. Failing  such waiver,  the Articles will normally require  the shares  to be first offered  to existing members pro-rata to their holdings and only if members decline  to purchase some or all of the shares,  may they be offered  to a third party
- see Article 4 Part II, Table A, Schedule 1 of CAMA.
The Articles  may also confer  discretion upon the directors to refuse to register  of share (e.g. Articles 3 Part II, Table A, Schedule 1 of CAMA).
Normally, this discretion is restricted to shares  which  are not fully paid or on which  the company has a lien or in cases where  the transferor has failed  to comply  with normal prescribed formalities.
Upon  receipt  by the company, the Board  of Directors must within  3 months  either  register the shares  and issue a new certificate: section 146 or if the Directors refuse to register  the transfer, send to the transferee, notice of refusal: section 153 CAMA.
Upon approval of the transfer, the secretary should  enter details  in the register of transfers of the company and make  the appropriate entries  to the register of members.

Where the transferor wishes to split the sale of his shares e.g. a share certificate for 1000 shares, and wishes to transfer  500 to B, 300 to C and 200 to D or he wants to sell 200 whilst retaining 800, it would  be inappropriate for him to hand to the transferee a share certificate for a larger  number of shares  than are comprised in the transfer. In such a case, the holder sends  his signed  transfer with the share  certificate to the company with a request that the instrument of transfer be recognised and registered The transfer is returned to the transferee in the form of an endorsement  CERTIFICATE LOD GE in exchange for the price. The transferee executes and sends it to the company for registration: section  157
Th e tran sferee accep ts th e certification as ev id en ce of th e seller s title, legally h ow ev er, it is only prima facie evidence of title so if a false certification is made negligently by the company the latter  must compensate the transferee, hence  the need for some form of indemnity by the company for its protection in the event of fraud on the part of the transferor: section  157
Until the name of the transferee is entered  in the register  of members in respect  of the share
the legal estate still vests in the transferor but the beneficial owner is the transferee: see also section. 86 See Ferris George & sons Ltd. V. Khoury [1965] 1 All Nig. L.R. 91; African  continental seaways  v. Nigerian dredging roads and general  works [1977] 5 S.C. 235
The Supreme Court  held that If the register  of members of a company is to be rectified,  it is not enough  to place a person's name on the register. That person  must be allotted  a specific number of shares.
If the transferor refuses  to effect the transfer,  for no justifiable cause after he has obtained consideration for it, The transferee can sue in court for specific performance, and urge the court to compel  the transferor to do all such things  to complete the transfer
Where  the Articles  do confer  rights of pre-emptions upon existing shareholders, it will be necessary to obtain written waivers from each shareholder if it is proposed to transfer shares to a person  other than an existing member. Failing  such waiver,  the Articles will normally require  the shares  to be first offered  to existing members pro-rata to their  holdings and only if members decline  to purchase some or all of the shares,  may they be offered  to a third party
- see Article 4 of Precedent  in  Part II, Table A, Schedule  1 of CAMA.
The Articles  may also confer  discretion upon the directors to refuse to register  of share (e.g. Articles 3 of Precedent  in Part II, Table A, Schedule  1 of CAMA).
Normally, this discretion is restricted to shares  which  are not fully paid or on which  the company has a lien or in cases where  the transferor has failed  to comply  with normal Payment for Shares
A member of a company either by subscription, allotment or later acquisition  of shares
is liable to pay the price of the shares he has taken or such amount as remains unpaid on the shares.
Section 135 provides that subject  to the provisions of section 136 (meaning of payment in cash) and section  137 (payment other than in cash),  the shares  of a company and any premium on them shall be paid up in cash,  or where  the articles  so permit,  by a
valuable consideration other  than cash,  or partly  in cash and partly  by a valuable
consideration other  than cash.
(a)  Payment in cash
Section 136
Payment  in cash may be in actual handing over of cash in the form of legal tender or cheque or similar instruments but payment  in cash is not confided  to these.
(b)   Payment otherwise  than in cash
A company may agree to accept consideration other than cash in part or full payment  for shares. For example, where a company is formed to take over a business, it is usual for part or all the shares allotted to be paid for by the transfer of the property to the company.  Similarly, shares may be allotted in consideration of services rendered  by the allottee to the company.
Section 137(1) provides  that where a company  agrees to accept payment  for its shares
otherwise  than wholly in cash, it shall appoint  an independent valuer who will determine the true value of the consideration other than cash and prepare  and submit to the company  a report on the value of the consideration.
The valuer is entitled to require from the officer of the company such information and explanation as he thinks necessary  to enable him carry out the valuation  or make the report: section  137(2)).
When the report is submitted to the company, it must, not more than 3 days after the receipt of the report, send a copy of it to the proposed  purchaser  indicating  whether or not the company  intends to accept the consideration as payment  or part payment  for the shares : section  137(3)).
Section 137(4) provides  that a company  shall not accept as payment  or part payment  for its shares consideration other than cash unless the cash value of the consideration as determined by the valuer is worth at least as much as will be credited as paid up in respect of the shares allotted to the proposed purchaser.  This provision is of considerable significance  in view of the sharp practice and fraud, which the absence of such a provision  in our law had facilitated  in the past.
It is normal  for a formal  contract to be drafted  for the transfer to the company of a non-cash asset in consideration of the allotment of shares.  This agreement and the allotment of the consideration shares  will require  approval by the board  of directors if some or all of the consideration shares  are to be issued  to a 'connected person', within  the meaning of section
286 (8) e.g. a director  or a company associated with a director, it may be necessary for the transaction to be approved by a resolution of shareholders : section   284(1)(b)) see also sections 284(2); 285 and 286
The valuation report must be filed along  with the the formal contract,  the agreement  for sale of property  or for services or other consideration if any, entered  into for the transfer  of the consideration to the company  with the CAC along with the Form CAC 2
If the consideration involves transfer of technology, it may be necessary to apply to the National  office for technology acquisition originally established under  the National Office  of Industrial  Property  Cap. 268 L.F.N. 1990. See National  Office  of Industrial Property (Change Of Name, Etc.) Decree No. 82 1992 for the prescribed formalities.
Payment of interest
Payment  of interest  at the current bank interest  rate may be demanded on overdue calls unless this is waived by the directors section 133(4)and  as a last resort, the necessary  steps may be taken to forfeit the shares. Section: 140 (2)
Payment  in advance  of calls
Section 133(6) provides that the directors a company  may accept payment  from any member of the whole or a part of the amount remaining  uncalled  and unpaid on his shares. In such a case, the member becomes  a creditor to the extent of the payment  in advance,  so that interest on it
can be paid out of capital, i.e. whether profits are made by the company  or not, at such rate not
exceeding  (unless the company  in general meeting shall otherwise  direct) the current bank rate per annum
Forfeiture of Shares
Section 140 (2) provides that where  a call is unpaid  after it has become due, the directors
m u st giv e 14 clear d ays  n otice requ irin g p aym en t p lu s in terest. If th e n otice is n ot com p lied with,  the directors may resolve  to forfeit  it and any dividends not paid before  the forfeiture. A person  whose  shares  have been forfeited ceases  to be a member but remains liable to the company for all moneys which  at the date of forfeiture were payable with interest, but the directors may waive  payment wholly or in part or enforce payment without any allowance for the value of the shares  at the time of forfeiture or for any consideration received on their disposal. Forfeited shares  may be sold, re-allotted or disposed of to the holder  before forfeiture or any other person  as the directors may determine, subject  to the provisions of the Act, and, where  the shares  are transferred, the directors may authorise the execution of the instrument of transfer.
By succeeding  to shares on the death or bankruptcy  of a member (Transmission Of
Transmission signifies a change  in ownership by operation of law otherwise than by ordinary transfer; that is either  by:
(a)    death;  or
(b)   Unsoundness of mind  or
(c)   bankruptcy

Member's death

The following provisions are of assistance to the legal representatives of a deceased member.

• He has the option to be registered as the holder or he can nominate somebody else to be registered .

• If he decides to be the holder, then he must notify the company to that effect. If he elects to have somebody else registered, then he must execute a transfer of shares to that person.

• Most importantly, it is necessary first to ascertain if the deceased shareholder died testate or intestate, if she left a will, and appointed an executor, then that is when he can exercise any right conferred on legal representatives, in which case, he must produce probate of the will to the company

• if he died intestate, i.e. without leaving a will, then the legal representative of the deceased member must first obtain General Letters of Administration before the company can recognize him.

• it is not enough to attach death certificate to a letter informing the company of deceased member’s death he must comply with the mandatory provisions of CAMA and possibly the company’s articles before he can succeed to the shares in the company

b. if deceased member had held the shares jointly with another person e.g. his wife, then she would be regarded as his surviving joint holder and she is the one (to the exclusion of their children) and she is the one to be recognised by the company as having the title to the shares.: s. 155(1)

Member's bankruptcy
(a) On becoming bankrupt, a member's shares  vest in his trustee  in bankruptcy.
(b) The trustee  must, however, prove  to the company that he is entitled to deal with the bankrupt's shares, by producing:
(i) an office copy of the Court's  order by which he was appointed, or the company may accept  a copy of the Gazette  advertising his appointment; and
(ii) an authenticated copy of his signature.
(c) (i) He may transfer the shares,  as has the same right of transfer as the bankrupt himself  has
formerly possessed.
(ii) He may have the shares  registered in his own name,  where  the Articles permit  or require him to do so; if, however, there is any liability  on the shares,  he is unlikely  to do so as he would  then become personally liable,  and, moreover, he would  also lose his right to disclaim the shares.
(iii) He may disclaim the shares  if they are onerous and so long as he had not had them
registered in his own name;  in which  case, the company will be entitled  to prove  in the bankruptcy for any loss suffered as a result of the disclaimer.

Unsoundness of mind of a member
(a) The Court may appoint  a Receiver to administer the affairs  of a shareholder who is of unsound mind.  ,
(b) The Receiver must produce  to the company the court  order  confirming his appointment, and this must be accepted by the company as sufficient evidence of the appointment.
(c) The Receiver  is then able to deal with the shares  concerned, in accordance with the authority given  in the order,  e.g. to transfer the shares,  or merely to receive dividends due to the insane  member.
(d) If the member concerned is a joint holder,  his interest  does not pass to the surviving joint holder(s) but to the Receiver.

By obtaining  share qualification imposed  on Directors
There  is no statutory obligation on a company to impose  on its directors to be shareholders. The articles may however provide that each director should  own a certain  number of shares to qualify  to be a director  ("share  qualification"). This is to ensure  that the director  has a personal interest and commitment in the company.
Register  of members
Every  company must keep a register  of members and enter in the register the name  of each member, a statement of the number of shares  or the amount  of stock held by him

distinguishing each share  by its number so long as the share  has a number,
the amount paid or agreed  to be considered as paid on the share  of each member the dates on which  he was registered and on which  he ceased  to be a member: section  83
Section  633 provides that any register, index,  minute  book or accounting records  required by
CAMA  to be kept by a company may be kept by making entries  in bound  books  or
in loose leaves,  whether pasted  or not, or in a photographic film form, or may be entered  or recorded by any information storage  device  so long as the recording is capable of being reproduced in a legible  form within  a reasonable time.
This, in effect, legalises the use of a computer for the keeping  of registers, books of accounts and other  records.
Where any such register, record,  index,  minute  book or book of account is not kept by making entries  in a bound  book,  but by some  other  means, adequate precautions shall be taken for guarding against  falsification and for facilitating its discovery
Failure to take adequate precautions against fraud  and falsification renders the company
and every officer  in default  liable to fines; therefore, it is usual to take the necessary security measures, for example:
(i) Fitting  the register  with a suitable  locking  device,  and placing  the keys in the custody  of a responsible officer  of the company.
(ii) Keeping the register  in a fireproof safe or strong room  a precaution to be taken  whatever form the register  may take.
(iii) The issue of new sheets to be carefully supervised, preferably by the officer  who has
custody of the keys.
(iv) Duplicate keys may be deposited with the company's bank and instructions given  to hand them over only against' instructions of authorized signatories. : section  633(2)

Membership exceeding  50
If the company has more than fifty members, the register  must be indexed unless  the register is presented in such a form as to constitute in itself an index : section  85)..

Any person may inspect the register which must be open for this purpose for at least two hours on every working day. Anyone who is not a member of the company may be required
to pay a small inspection fee. Every person is entitled to receive from the company within ten days of demand a copy of the register or part of it, on payment of a fee not exceeding 50 kobo for each 100 words : Section 87.
If a company refuses  to grant inspection or supply  copies  on request, the court may compel an immediate inspection of the register, and index or direct  that the copies  required shall be sent to the persons  requiring them: section  87(4) and such refusal renders the company, and every officer in default, liable in fine: section 87(3)

Power to close register.
A company is permitted to close the register  for any time or times not exceeding in
aggregate thirty  days in each year during  which  time or times there is no right of inspection: Section 89. If the company gives notice of its intention to close the register  (by advertisement in a newspaper circulating in the district in which  the registered office is situated), the register may be closed  for any time or times not exceeding on the whole 30 days in each
year: section 89

Effect of an entry in the register
The register  is only prima facie evidence of matters  which  the law requires to be entered in it, but those who apply for its rectification must bear in mind that the onus of
proof lies with the person  who contests its accuracy. If, therefore, a person  allows  his name to remain  in the register, he may be held liable as a member: section 91

Location of the register and notices to the CAC
The register of m em bers sh ou ld be m ain tain ed at a com p an y s registered office, u n less it is written up at another office of the company or at another  place(within Nigeria), in which case the register  may be kept at such office.
If the register  is not maintained at the registered office,  notice must be given to the CAC of the place where  it is kept or any change  in the place where  it is kept:  section  84).. Notice of its location  is not required  so long as it is kept at the registered office,  but if it is removed to another  place  the Registrar must be
notified twenty-eight days.
(b) The company, the person  keeping  the register  and any officer  in default  are liable to fines for non-compliance with the above requirements: section  84(4) and section  88

Joint holders
The joint holder  first named  in the Register  of Members is, according to the Articles  of most companies, entitled  to receive  payment of dividend and to exercise voting  rights  of the joint holding.  As a rule, notices  will be sent to him as the 'senior'  joint holder:  section 220 recognises that a Notice  may be given by the company to the joint holders  of shares by giving  the notice  to the joint holder  first named  in the register  of members in respect  of the share.
For that reason,  joint holders have the right to determine in which  order  their names  shall be entered in the register. Alternatively, they are entitled to require the company to split their holding, so that each joint holder  becomes the first named  in the register  for part of the holding: Burns v. Siemens Bros. Dynamo Works Ltd. [1919].1 Ch. 225

Rights of members
The basic legal principles are as follows:
1.    The shareholder acquires, by virtue  of his share,  an interest  measured by a sum of money  and made  up of various rights  contained in the articles.  His share is an item of property and by virtue  of it he has an interest in the company, albeit  no proprietary right  in the company's property: sections  81 and 385
2.    In the absence of contrary provision in the memorandum or articles, it is presumed that the rights  of all shareholders are equal. These include  rights to equal liability  to calls and dividends attendance and voting  at meetings and return  of capital on an authorised reduction or a winding up: Oakbank  Oil Co v Crum (1882) 8 App Cas 65)
3.    In every case in which  a member is entitled  to attend  and vote at a company's meeting, he has the right to appoint a proxy  to attend and vote  instead of him: section 230
4.    Although CAMA  does not confer  a statutory right of pre-emption upon  the shareholders of the company, the Articles of Association of private companies usually contain a pre-emptive rights  of shareholders of such company: section   34
5.    After payment of expenses and subject  to the provisions CAMA, the property of a
company in a voluntary winding up must be applied in satisfaction of its liabilities pari passu and, subject to that application, must be distributed among  the members according to their rights  and interests in the company: section 480

6.    A minority member of a company has a number of rights  that are enforceable against the company or its directors (see Chapter 14 Minority Protection)
7.    The members have an express, statutory right to inspect  the minutes of general meetings; Section 242
8.    A company shall, on request  by any member, send to him a copy of the memorandum and of the articles: section  42
9.    All members have extensive rights  to information about the company, for example Section 275 requires the company to keep a register  of its directors interests. In the register, information must be given in respect  of every director, the number of shares,  the description of such shares  and the amount and shares  held by every  director of the company and the information must also show the debenture of the company held by each director of the company.

Corporate membership  rights
Besides purely  individual membership rights,  there are qualified minority rights,  that is, rights  that can be exercised not by a single  individual but many  individual members acting in cooperation, e.g., by a resolution. Implicit in the contract of company membership is acceptance of the principle that majority decisions are paramount; and that corporate members' rights  exercised by a majority include  the ability  to impose  policy  which  an
individual member may dislike, and even to vary the terms of the membership contract, e.g., by alteration of the articles  of association by due process.

Cessation of membership
A member  of a company ceases  to be such in any of the following ways:
(a)   when he forfeits  his shares in a case where  any call remains unpaid  for a certain  time:
(see forfeiture of shares below):section 140 (2)
(b)   when  he sells his shares  to another person  and that person  is registered as the owner of the shares (see Transfer of shares followed by registration above): section 146 section 115,
(c)   When a company exercises its right of lien over the shares.  The company can have a
lien on all shares not fully paid up, for all calls whether payable or not called  or payable at a fixed time in respect  of that share, (see Lien over shares below): section 139.
(d)   On the death  of a shareholder any shares  held by him vests in his personal representatives who then become  liable for calls made on the shares.  In the case of a bankrupt, the shares  vest on his trustee in bankruptcy.
(e)   On a company purchasing its own shares  in circumstances that are permitted by
section 160(2) (see Chapter 7 Maintenance of Capital)
(f)    Upon redemption of redeemable preference shares  issued  in accordance with the rules laid down by CAMA:   sections 122 and 158
(g)   If a prospectus is misleading, remedies are available both at common law and Investments and Securities  Act No. 45 1999 :sections  71 and 44 to a subscriber for shares or debentures to rescind the contract of allotment on grounds of misrepresentation or an action for damages for deceit  against those  who issued  the prospectus.

Joint holders: Liability for calls
The joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share. Section 133(3)
Lien over shares
In addition to the power  of forfeiting shares  for non-payment of calls, the company can have a lien on all shares  not fully paid up, for all calls whether payable or not called  or payable at a fixed time in respect  of that share,  and the company shall also have a first and paramount

lien on all shares  (other  than fully paid shares)  standing registered in the name of a single person  or all moneys presently payable by him or his estate  to the company; but the directors may at any time declare  any share to be wholly  or in part exempt  from the provisions of section 139(1)
A company's lien, if any, on a share shall extend  to all dividends payable on it. section 139 (2).
A company may sell, such shares  but the member must be given 14 days notice  in writing, stating  and demanding payment of such part of the amount in respect of which  the lien exists as is currently  payable,  139 (3).
Numbering of shares
Each share must be distinguished by its appropriate number, but this requirement of numbering may be dispensed  with if all the issued shares or all the issued shares of a class - (a)   are fully paid up; and
(b)    rank pari passu for all purposes  : section  145).
Share certificate
Section 146 provides that a company must issue a certificate within  2 months  of allotment of any of its shares  and within  3 months  after the lodging of a transfer unless  the conditions of issue of the shares provide  otherwise. The company may issue one certificate for all the shares of a person  or several  certificates for one or more of the shares on payment of a fee for every certificate after the first one as the directors shall from time to time determine: section
A person  who is entitled  to a certificate may serve a notice on the company to comply  with the above,  and if the company fails to do so within  10 days after the service  of the notice, he may apply  to the court  for an order  directing the company to comply with the request : section  146(5) if this is still not complied with, the company and every officer,  who is in default is liable to a daily default  fine : section  146(6)).
Dividend  warrant
A dividend warrant is a negotiable instrument that serves  two main  purposes
1.    The notice or counterfoil portion  informs the shareholder of the gross amount  of dividend, the rate and amount of tax deducted and the net amount of dividend to which  he is entitled.
2.    The warrant or cheque portion must be presented to the bank upon which  it is drawn usually within  a specified period  of, say six months       otherwise it becomes stale

Liquidation  of a corporate member.
(a) When  a corporate member is wound  up, the liquidator must produce evidence of his appointment before  he becomes entitled to deal with the shares  concerned. The evidence required depends upon  the mode  of winding up adopted, i.e. whether it is a compulsory winding up or a voluntary winding up
(b) In a compulsory winding up, the liquidator will be required to produce the court  order by which  he was appointed, or a copy of the Gazette in which  it was advertised.
(c) In a voluntary winding up, the liquidator must produce certified copies  of the resolutions for winding up and authorizing his appointment.
For various  reasons, a beneficial owner  of shares  may not wish to be registered, and therefore seen, as the holder  or shares  in a company. In such circumstances, he may arrange for his shares to be held by a nominee.
The relationship between a beneficial owner  and his nominee does not concern a company. A company is not permitted to recognise a trust.
A beneficial owner  should  protect  his holding by requiring the nominee to execute a declaration of trust in his favour  and to require  the nominee to execute a share transfer form in blank:
NOTE: Although section  86 enables  the company to treat the registered holder  of shares  as
the beneficial owner, nevertheless, section  94 enables  a public  company to require  any member of the company, to indicate in writing  the capacity in which  he holds any shares  in the company; and if he holds them otherwise than as beneficial owner,  to indicate in writing the particulars of the identity of persons interested in the shares  in question and whether persons interested in the same  shares  are parties  to any agreement or arrangement relating to the exercise of any rights  conferred by the holding  of the shares.
As soon as the public  company is notified of such interest, it must inquire  from the registered holder to indicate the capacity in which  he holds the shares,  once the information is given to the company, it shall be under  an obligation to inscribe against  the name of the member in the register  of members -
(a) the fact that the requirement was imposed; and
(b) the information received in pursuance of the requirement: section  94(3)
Rectification of Register
Section 90 gives  the court  power  to order rectification of the register  of members:
a.     If a person  who has not agreed  to take shares  is included in the register, e.g. where he has been induced to take shares  by misrepresentation
b.     If his name is omitted or wrongfully removed from the register, e.g. by reason of an invalid  forfeiture or false transfer; or
c.     If there has been default  or unnecessary delay in recording the fact that a person  has ceased  to be a member, e.g. the directors may unduly  delay the registration of a transfer which  they have no power to reject
Application to the court for rectification may be made by the person  aggrieved, any member of the company, or the company itself, according to the circumstances
The court may refuse the application for rectification, or order the rectification and payment
of damages to the aggrieved party Section  90 (2)]
The section goes further to provide  in Section  90 (3)] that the court  may decide  any question relating to the title of any person  who is a party to the application to have his name  entered in or omitted from the register, whether the question arises  between members or alleged members or between members and alleged members on the one hand and the company on the other  hand,  and generally may decide  any question necessary or expedient to be decided for rectification of the register.
By section 90 (4)] the court,  when making  an order for rectification of the register  may, by its order, direct that notice of the rectification should  be given to the CAC.
Section 91. states that the register  of members shall be prima  facie evidence of matters  that are by this Act directed or authorised to be inserted in it.
Rectification will be granted  where an allotment of shares is set aside
following, e.g. a false statement in a prospectus. The consequent action for rescission - if that is the course  the plaintiff chooses to pursue  - is accompanied by a request  for rectification of the register.
Stolen Certificates  and Forged Transfer
A person  may procure the issue of a share certificate as a result of the delivery to the company of a forged  transfer together with a stolen  or misappropriated share certificate of the registered holder.  The company accepts  the transfer for registration and issues  a new certificate to the transferee (presenting the forged  transfer) who then re-sells  the shares to another person  who might  be unaware of the forgery
(a) No rights  can be acquired by the transferee under  a forged  transfer as it is void. (b) The rights  and liabilities of the company on a forged  transfer are as follows.
(i) It must restore  the 'transferor' (i.e. the true owner)  to the register  and compensate him for dividends due to him.
(ii) It must remove  the transferee's name from the register, and recover  from him any dividends he may have received as a result of the forgery.
(iii) It must compensate a second transferee (if any) who has received a share certificate and has been entered in the Register  of Members, in this case the company is estopped from denying the title of a second  transferee, if he had relied  on the share certificate and had acted in good faith. See Ruben v. Great Fingall Consolidated (1906) A.C. 439
In Re Bahia & San Francisco railway company (1868) L.R. 3 Q.B. 584: Held in this case that though  a share certificate is not a document of title, it is nonetheless a prima facie evidence  of title and if anyone  relies on the share certificate, the company is estopped from denying that it is correct. See also section 147 and Sheffield Corporation. v. Barclays (1905) A.C. 392; In order  to prevent the registration of forged  transfers, some companies give notice  to a member when  a transfer from him has been presented for registration. However,
notification to the transferor is not a legal requirement, and many companies do not give such notice.
Share Warrant
A share  warrant was sometimes issued  to a holder  stating  that the bearer  was entitled to the shares or stocks specified in it.
At the commencement of the Act section 149 provides that no company will have the power to issue share warrants: section 149(1)), and where  a company had issued  share  warrants which  were valid,  it must within  30 days therefrom cancel  the share  warrants and enter  in the register of members the names  and particulars of the bearers of the share  warrants. : section 149(2)). A person  whose  name is so entered  in the register  is deemed to be a member of the company from the date of issuance of the cancelled share warrant: section  149(3)).

Mortgage  of shares
Shares  being items of property can be mortgaged. This could involve  an assignment by way of legal mortgage or deposit  of the share certificate by way of equitable mortgage or a charge. Retention of the share certificate may offer some protection to the mortgagee against transfer to another  person,  is not in itself sufficient to enable  the mortgagee realise  his security, in that he will have to obtain  a court order to sell the shares  or foreclose the security, otherwise the shares  cannot  be registered in his name. Obtaining an irrevocable power of attorney authorising the morgagee to sign the share transfer  on behalf of the borrower or obtain  a blank transfer from the borrower can obviate  this situation

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