Is Management Buy-Out a form of corporate restructuring? In this article, we would understand its meaning as well as sections of the law that provides for this.
Let’s get started.
What Is Management Buy-Out?
Simply explained, a management buy-out is a transaction in which the team of a firm buys the assets and operations of the company they run.
Section 449 (a) and (b) of the Security and Exchange Commission’s Rules provide for the Rules on Management Buy-Out.
Section 449 Rules On Management Buy-Out
(a) provides that a management buy-out is an acquisition by a team of a company, of controlling shares of that company or its subsidiaries with or without third-party financing.
(b) According to the SEC Rules, an application for the approval of a management buy-out shall be filed by the management team making the acquisition, such application shall be accompanied by the following;
(a)Resolution of the shareholders of the company approving the buy-out
(b)Resolution of the management team to undertake the management buy-out
(c)A copy of the certificate of incorporation of the company
(d)A copy of the memorandum and articles of association of the company
(e)Two copies of the prospectus which shall contain; the profile of the company, profile of the management team buying over the company amongst other requirements
(f)Sale agreement between the company and the management team which shall contain terms such as the terms and conditions of sale amongst others
(g)Any other document that may be required by the commission from time to time
We trust that this short piece has informed your understanding of buy-out as a form of corporate restructuring in Nigeria.
Have any questions? Book a call with us today!
https://calendly.com/info-whe/30min
Do you seek redress or consultation on legal matters?
Our Law Firm – Scotts Legal – offers legal services in areas including but not limited to the following:
- Real Estate Services (Property Acquisition, Investigation, Registration, Property Management)
- Company Registration and Post-Incorporation Services
- Corporate and Commercial Law solutions
- Domestic Violence and Child Custody
- Cross Border Transactions
- Debt Recovery Services
- Commercial Litigation
- Intellectual Property
- International Trade
- Criminal Litigation
- Employment Law
- Client Advisory
- Civil Litigation
- Mining Law
- Tax Law
Book a FREE CALL to inquire about any of the services above.
Follow us on our social media handles:
Constantly get our news updates
