AN EXAMINATION OF INVESTORS’ PROTECTION UNDER NIGERIAN LAW

posted on June 27, 2018

AN EXAMINATION OF INVESTORS’ PROTECTION UNDER NIGERIAN LAW

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the Study

An investor is a person who puts money into financial schemes, shares, or property with the expectation of making a profit.^[1]An investor is someone who commits capital in order to gain financial returns or a person who commits money to investment products with the expectation of financial return. An investor is a person, company, or Organization who has money invested in a venture with a hope of returns especially one that holds stock in publicly owned corporation. Generally, the primary concern of an investor is to minimize risk while maximizing return. An investor can be a shareholder or a creditor. A person who buys shares or owns shares in a company becomes an investor in that company and a person, company or organization that lends money or supplies goods on credit to a company becomes a creditor of that company.

The company is a dominant feature in every facet of the Nigerian economy from banking to oil and gas, health to recreation, construction to agriculture just to mention a few. In every company there are investors. Gone are the days when sole proprietorship was the most preferable form of business wherein the capitalists invested and earned profits out of the business for themselves. Though sole proprietorships still exist, they are not the most common forms of business today. Taste of the consumers have changed, technology has advanced manifold and production at large scale. To meet these needs the company form of business came into existence to accommodate the shift from traditional goods to capital goods and technological products which require huge amount of labour and capital, supply which was not possible for a person or handful of persons to readily make available by the sole proprietorship^[2].

The company is a means whereby the wealth of innumerable individuals has been concentrated into huge aggregates and whereby control over this wealth has been surrendered to a unified direction. The power attendant upon such concentration has brought forth princes of industry whose position in the community is yet to be defined^[3]. The surrender of control over their wealth by the investors has effectively broken the old property relationships and has raised the problem of defining these relationships anew. The direction of industry by persons other than those who have ventured their wealth has raised the question of the motive of such direction and the effective distribution of the returns from business enterprise.

[1](2001)Oxford Dictionary of Current English Oxford University press, Great Clarendon Street Oxford, third

edition, p. 478 to 479

[2] Singh R. K Origin and evolution of the modern company law, Retrieved from http/www.legalservice .com on 10/3/2013 at 1pm.

[3] Berle A.A Means G.C(1963) the modern corporation and private property, the Macmillan nineteenth printing

company, New York p.2