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The short answer
If you run a UK limited company with a co-founder who lives in Nigeria, put a written shareholders' agreement alongside the articles, governed by the law of England and Wales, that sets out vesting, leaver terms, decisions that need both of you, deadlock and share transfers. Choose the dispute forum with Nigeria in mind: a final money judgment of a UK superior court can be registered in Nigeria under the Reciprocal Enforcement of Judgments Ordinance 1922, generally within 12 months of the judgment.
Why the articles alone are not enough
Every UK company has articles of association, and many founders simply adopt the model articles at incorporation. Those articles deal with how the company is run, but they say nothing about what happens when one founder stops working, wants to sell to an outsider or refuses to sign off a funding round. A shareholders' agreement is a private contract between the shareholders (and usually the company) that fills those gaps. Unlike the articles, it is not filed at Companies House, so the commercial terms stay private.
Distance raises the stakes. When one founder is in London and the other in Lagos, misunderstandings about who decides what, and who owns the code, the brand and the customer list, are harder to resolve over a call. A clear document agreed early is cheaper than a dispute fought across two legal systems.
The clauses that do the most work
- Shares and vesting. Who holds what, and whether founder shares vest over time so that someone who leaves early does not keep a large stake for little work.
- Good and bad leaver. What price a departing founder's shares are bought back at, and what counts as each type of leaving (illness, resignation, dismissal for misconduct).
- Reserved matters. Decisions that need both founders or a set majority: issuing new shares, taking on debt above a level, selling the business, changing the articles, hiring family members.
- Deadlock. What happens if two 50% holders cannot agree: escalation to a mediator, a cooling-off period, then a buy-sell mechanism.
- Transfers. Pre-emption (existing holders get first refusal), drag-along (a majority can make the minority join a sale) and tag-along (a minority can join a sale on the same terms).
- Intellectual property. Every founder assigns what they built for the business to the company, including work done in Nigeria before incorporation.
- Restrictive covenants. Non-compete and non-solicit periods that a court would see as reasonable in length and scope.
- Money in and out. Who funds early costs, whether that is a loan or new shares, and how the company may pay a founder who is not on UK payroll.
Choosing the law and the forum
For a UK company, English law (or Scots law for a Scottish company) is the natural governing law, because the articles, the Companies Act and the share register are all English-law instruments. The harder question is where a dispute is decided and whether the result can be enforced against a founder whose assets are in Nigeria.
A guide by Adeola Oyinlade & Co (Mondaq, 24 June 2026) explains that judgments of UK superior courts fall under the Reciprocal Enforcement of Judgments Ordinance 1922. The judgment must be final and conclusive and for a fixed sum of money (not a fine, tax or penalty), the UK court must have had jurisdiction, and the debtor must have had a fair hearing; default judgments are scrutinised more closely. Registration is generally sought within 12 months of the judgment, after which the creditor may be left with a slower common-law action. The same guide notes the court can enforce in the original currency or in naira at the CBN official rate.
Two practical points follow. Orders such as an injunction or an order to transfer shares are not a fixed money sum, so the registration route will not carry them. And if your co-founder is likely to hold most of their assets in Nigeria, ask your lawyer whether an arbitration clause with a seat both of you accept would be easier to enforce than a court judgment. This is a question for a solicitor qualified in each country, not something to settle from a template.
Worked example: a 60/40 split
Example only. Amaka in Manchester and Tunde in Lagos set up a UK company. Amaka takes 60% and Tunde 40%. They agree four-year vesting with a one-year cliff: if Tunde leaves in month 10 he keeps nothing of his unvested shares; if he leaves at the end of year two, half his 40% (20%) has vested and he keeps that, while the company or Amaka can buy the other 20% at nominal value. Reserved matters include any new share issue and any borrowing over an agreed amount, so Amaka's majority cannot dilute Tunde without his consent. Deadlock on a reserved matter goes to mediation within 30 days, then to a buy-sell clause.
Because Tunde holds more than 25% of the shares, he is a person with significant control. Companies House says PSC details must include name, date of birth, nationality, country of residence and the band of shares held (over 25% to 50% here), and changes must be reported within 14 days of the company confirming them. He must also verify his identity with Companies House, which is a legal requirement for directors and PSCs from 18 November 2025; read our guide on identity verification for a Nigerian director.
What to check first
- Agree the split, vesting and roles in writing before anyone does significant work.
- Decide which matters need unanimous consent and write them as a list, not a principle.
- Make sure IP created in Nigeria is assigned to the UK company, and that any Nigerian contractor agreements say the same.
- Ask a solicitor about the dispute clause with Nigerian enforcement in mind.
- Keep the PSC register and Companies House filings in line with the cap table.
- Agree how the Nigerian founder will be paid; see paying a Nigerian co-founder from a UK company.
Where Pryme fits
Founders split across two countries often need the company to hold pounds and naira side by side. A Pryme Business Account can be opened from any country and holds NGN, USD, GBP and EUR with local account details for each; outside Nigeria these services are provided through regulated partners. The Compliance agent can prepare reminders for PSC changes and filing dates for a director to approve. If you are raising money next, read taking investment from Nigeria into a UK company.
Questions people ask
Is a shareholders' agreement legally required for a UK company?
No. The articles are required; a shareholders' agreement is optional. For co-founders in different countries it is the main protection against a stalemate or an early leaver keeping a large stake.
Can my co-founder in Nigeria sign the agreement electronically?
Usually yes for a simple contract under English law, but check with your solicitor whether any part needs to be executed as a deed and how witnessing will work from Nigeria.
Can a UK court judgment against my co-founder be enforced in Nigeria?
A final money judgment of a UK superior court can be registered in Nigeria under the 1922 Ordinance, generally within 12 months. Non-money orders do not travel the same way.
Does a co-founder with 40% have to be on the PSC register?
Yes. Holding more than 25% of the shares or voting rights makes someone a PSC, and they must verify their identity with Companies House.
Sources
- Mondaq (Adeola Oyinlade & Co): Enforcing UK and US judgments in the Nigerian Federal High Court (24 Jun 2026) · accessed Oct 2026
- Companies House: People with significant control (updated 30 Jul 2026) · accessed Oct 2026
- Changes to UK company law: Identity verification · 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.