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The short answer
A shareholders' agreement for a South African Pty Ltd is a private contract, but under section 15(7) of the Companies Act 2008 it must be consistent with the Act and the company's Memorandum of Incorporation (MOI), and any clause that conflicts is void to that extent. When one founder lives in Nigeria, the agreement should settle remote decision-making, who signs and banks, how money moves across the border, exits, deadlock and where disputes are heard, and the MOI should be aligned with it.
Two founders, one in Johannesburg and one in Lagos, can run a South African private company together. The risk is not the distance itself but the gaps it creates: who can sign when one person is unreachable, what happens if the Nigerian founder stops contributing, and which court or arbitrator decides a fight. A shareholders' agreement is where you close those gaps. This guide sets out the clauses that matter most for a cross-border pair. It is information, not legal advice; have a South African commercial lawyer draft or review the final text.
How the agreement sits next to the MOI
South African companies have two governing documents. The MOI is filed with the CIPC and is public. The shareholders' agreement is private and is not filed. A Barnard Inc. note published on Mondaq in October 2024 summarises section 15(7) of the Companies Act 2008: the agreement must be consistent with the Act and yields precedence to the MOI, and an inconsistent clause is void to the extent of the inconsistency.
The practical rule follows. Anything you need to bind the company itself, such as extra voting thresholds, limits on directors' powers or share-transfer restrictions, should be written into the MOI as well, or the MOI should be amended so the two documents say the same thing. A clever clause that lives only in the private agreement and contradicts a standard MOI may not survive a dispute.
The clauses a Nigeria-based founder changes
Decisions and meetings
- Remote participation: allow board and shareholder meetings by video, and written resolutions signed electronically, so the Lagos founder is never shut out by geography.
- Reserved matters: list the decisions that need both founders (new shares, borrowing above a set amount, selling the business, changing the MOI, hiring a relative). Mirror them in the MOI.
- Notice: give notice periods long enough for someone in another country, and name an email address for each founder as a valid notice address.
- Quorum: say whether a meeting can proceed if one founder fails to attend twice, so the company cannot be frozen by absence.
Signing, banking and the public officer
Decide who holds online banking authority, the payment limits for each signatory, and who acts on SARS matters. A company that trades in South Africa needs someone on the ground who can deal with the bank and SARS. Write down what that person may do alone and what needs the other founder's consent.
Money in and money out
- Capital contributions: who pays what, in which currency, by what date, and what happens if a founder does not pay (dilution or a loan account).
- Shareholder loans: the Mondaq note lists terms of shareholder loans among typical agreement topics. Say whether loans carry interest and how they are repaid before dividends.
- Dividends to Nigeria: set a dividend policy. PwC's Nigeria summary (reviewed May 2026) lists South Africa among the treaty partners with a 7.5% rate on dividends, interest and royalties on the Nigerian side. South African dividends tax on a non-resident shareholder is a separate question; ask your adviser and SARS before the first payment.
- Budgets and accounts: the note also lists accounting policy and budgets. Agree a monthly management pack the Lagos founder receives without asking.
Leaving, selling and deadlock
- Pre-emption: a founder who wants to sell offers shares to the other first, at a price set by a stated method.
- Tag-along and come-along (drag-along): both appear in the Mondaq list of typical clauses. Tag protects the minority if the majority sells; come-along lets a majority deliver the whole company to a buyer.
- Good and bad leaver: what a founder who stops working is paid for shares, and on what timetable.
- Deadlock: in a 50/50 company, name a route: escalation to a mentor, then mediation, then a buy-sell mechanism. Without one, the only exit may be a court.
Disputes and law
Choose South African law for a South African company, and decide whether disputes go to arbitration (with a named seat, rules and language) or to court. Arbitration can be easier for a founder abroad because hearings can be remote. Keep in mind that an award or judgment may need to be enforced where the other founder's assets are.
Filings that follow ownership
Ownership is not only private. The CIPC's Beneficial Ownership page says a beneficial owner is the individual who ultimately owns or exercises effective control, through beneficial interests, voting rights or the power to appoint or remove directors. New entities file within 10 business days of incorporation and changes within 10 business days. Since 16 February 2024, foreign nationals submit a certified passport through CIPC e-Services. Your agreement should oblige each founder to supply what the company needs to file on time; see beneficial ownership filing at CIPC.
If the Nigerian founder will also move to South Africa to run the business, immigration rules are separate from company law. The Immigration Regulations 2014 (as amended in 2018) set conditions for a business visa, including capital set by the Minister and an undertaking that 60% of staff will be South African citizens or permanent residents. Founding a company does not by itself give a right to work. Our guide to registering a Pty Ltd as a foreign national covers incorporation, and changing directors when a partner exits covers the filing side of a split.
What to check first
- Agree the share split and what each founder contributes, in writing, before incorporation.
- Have the MOI and agreement drafted together so reserved matters and transfer rules match.
- Settle banking authority, signing limits and who deals with SARS.
- Write the deadlock route and the leaver terms while you still agree.
- Confirm tax on dividends and loan interest in both countries with a qualified adviser.
Where Pryme fits
A Pryme Business Account can be opened from any country and holds NGN, USD, GBP and EUR with local details, which suits a Nigerian founder who receives dividends or invoices in those currencies. The business multicurrency account keeps each currency separate, and the Compliance agent can prepare a calendar of filing dates for a person to approve. It does not replace your South African bank or your lawyer.
Questions people ask
Does a shareholders' agreement have to be filed with CIPC?
No. The MOI is filed and public; the shareholders' agreement is a private document. It must still be consistent with the Companies Act and the MOI under section 15(7).
Can a founder living in Nigeria be a director of an SA Pty Ltd?
Company law does not bar a non-resident director, but banks, SARS and CIPC will ask for identity documents, and the company needs someone who can act locally. Check your bank's requirements before you appoint.
What happens if our agreement conflicts with the MOI?
The conflicting clause is void to the extent of the inconsistency, and the MOI prevails. Amend one or the other so they match.
Is tax on dividends to a Nigerian shareholder settled by the treaty?
Nigeria and South Africa have a double tax treaty. PwC lists a 7.5% Nigerian treaty rate on dividends; South African dividends tax on non-residents should be confirmed with SARS or an adviser before paying.
Sources
- Mondaq (Barnard Inc.): MOI, shareholders' agreement and rules of a company, 7 Oct 2024 · accessed Oct 2026
- CIPC: Beneficial Ownership · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria corporate withholding taxes (reviewed May 2026) · accessed Oct 2026
- Department of Home Affairs: Immigration Regulations 2014 (updated) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.