Authors: Dr. Okoro, Kalu Emmanuel
Abstract: The first major issue to be considered by promoters seeking to incorporate a company in Nigeria is the decision as to ho will contribute money towards the company’s incorporation and towards the running of the company upon its incorporation. After getting these individuals who will provide the initial capital for the running of the company, in Nigeria they constitute the shareholders of the company. Although the Companies and Allied Matters Act 2020 (CAMA) empower a single individual to incorporate a company, that very person is always ready to set out money for the running of the company upon its incorporation. However, upon incorporation, the incorporated company becomes a legal personality distinct from the said shareholder(s) thereby leaving decisions regarding the running of the incorporated company be it private limited company or public liability company to rest on the management of the firm, the Board. The puzzle of this separate entity mixes as a result of the artificial personality that a firm acquires upon its incorporation most often possesses a great deal in understanding. While the shareholders on one hand belief as owners of funds used in setting up and running the incorporated entities, that by leaving the day-to-day management of the company to distinct individuals, that they have lost their right of controlling, guiding and protecting their investment as to ensure adequate and optimal return on their investments. The management team and the Board, on the other hand, who are charged with the responsibility of day-to-day management of the firms, see the actions of shareholders in the care of the use of their investments, as interference to their right to manage the resources of the firms. This mix has caused many downfalls of incorporated firms. The objective of this research effort therefore is to find out how these shareholders can harmoniously play prominent roles jointly with the management team in an incorporated company so as to safely guide the shareholders’ investments without interfering with the corporate personality nature of an incorporated firm. The writer believes that doing this, will ensure optimal return on investment for the Shareholders while allowing the Board with their functions. This work will use doctrinal research method which entails examining available literatures regarding shareholders and corporate Governance in Nigeria, most especially the public limited liability companies, in order to establish how these two divides can work together harmoniously to ensure that the essence of the shareholders’ investments are not defeated as a result of the distinct legal personality of an incorporated firm. This work upon its finding of how important the roles of shareholders are in corporate governance in Nigeria in the overall performance of incorporated companies, recommended both can effective work together and that the National Assembly should urgently enact an Act that will streamline the activities of shareholders associations, acceptable to both the public corporations and the private sectors.