Substantial Shareholders

Flashcards covering the legal definitions, notification requirements, timelines, and penalties associated with substantial shareholders as outlined in Section $$120$$ of the Kama (CAMA).

What is the definition of a substantial shareholder in a public company according to Section $120$ Sub $2$?

A person who holds by themselves or through a nominee shares that entitle them to exercise at least $5\%$ of the unrestricted voting rights at any general meeting of the company.

Under Section $120$ Sub $1$, what information must a substantial shareholder provide in their written notice to the public company?

The person must state their name, address, and the full particulars of the shares held by them or their nominee, including the name of the nominee.

According to Section $120$ Sub $3$, what is the timeframe for a person to give notice after becoming aware they are a substantial shareholder?

The person must give the notice within $14\,\text{days}$ after becoming aware of their status as a substantial shareholder.

What does Section $120$ Sub $4$ state regarding a person who ceases to be a substantial shareholder during the notice period?

The notice must still be given even if the person has ceased to be a substantial shareholder before the expiration of the $14\,\text{days}$ period.

What is the company's obligation under Section $120$ Sub $5$ after receiving notice of a substantial shareholder?

The company shall, within $14\,\text{days}$ of receipt of the notice or becoming aware of the fact, give notice in writing to the Commission (Corporate Affairs Commission).

What are the consequences for a person or company failing to comply with the provisions of Section $120$?

Under Section $120$ Sub $6$, the person or company is liable to fines as prescribed by the Commission for each day the default continues.