Legal Question in Business Law in Ethiopia

I have a question please if you only have a time . .. my question is

that I found a share company whose share holders has contributed nothing except the donation they got from foreing donors in the name of the public and ,how ever all the share holders have a shares registered by thier name and they have equal share . Indeed they are agreed in their memorandum not to distributed dividend but this clause seems not to prevent the share holders to claims dividend from the profit my question is if skill contribution have no value as per the law

Are these share holders who has contributed nothing the owners of this copany in light of the business law?


Asked on 2/27/12, 4:52 am

1 Answer from Attorneys
Bahakal Yimer Zee Law Office

It is true that a skill contribution is not allowed in a share company structure. It is those in whose name the capital is registered that are owners of the Company. Accordingly, as a matter of principle, the fact that the money comes from foreign donors will not lessen the ownership right of the members registered. However, the donors could sue, depending on the case, the members of the sharecompany for misappropriating funds destined for another use. But these shareholders remain to be owners of the shares registered in their names in the Memorandum. NB: They can however be sued on fraud and misappropriation of funds, which is a serious criminal and civil suit.

Best regards,

Bahakal

Read more
Answered on 3/02/12, 2:40 am


Related Questions & Answers

More Business Law questions and answers in Ethiopia