COMPANY LAW — Shares — Share Ownership of Employee — Irrelevance of Employment Status
Ratio Decidendi
Per Oguntade, JSC, in Osisanya v. Afribank Nigeria Plc (2007) NLC-123-135-2001(SC) at pp. 10–11; Paras E–A:
"The question of share ownership of an employee in a company for which he works generally has nothing to do with the terms of the employee's employment under the company. Share ownership is a relationship governed by the Companies and Allied Matters Act. Outsiders who are not employees of a company buy shares in the company. I do not see therefore why the dismissal or termination of the plaintiff from the defendant's employment would have any effect whatsoever on the shares he owned in the plaintiff's company."
Explanation / Scope
Employment status and shareholding are distinct legal relationships governed by different legal frameworks—labour law and company law, respectively. Termination of employment operates on the contract of service and does not affect proprietary rights in shares. An employee who is dismissed remains a shareholder with all attendant rights, including dividends, voting rights, and the ability to transfer or retain shares.