Client
Our client, GetEquity Inc., is a fintech company that offers a data-driven platform that helps founders raise capital and manage their shareholder structures. They also provide retail and institutional investors and first-time fund managers the tools to invest, organize, and manage assets in one place.
Problem
The client was desirous of performing a Delaware flip as US venture capitalists often prefer investing in Delaware corporations due to their familiarity with Delaware law and the favorable business environment it offers. By performing a Delaware flip, our client may become more attractive to US investors, potentially unlocking more significant funding opportunities.
Approach
To achieve our client’s desired objective, we were required to incorporate a new US corporation in Delaware followed by the exchange by all the shareholders in the existing Nigerian company of their shares for an equal number of shares of stock in the Delaware entity. To execute this, we took the following steps:
- Incorporation of a Delaware Corporation: We facilitated the incorporation of a Delaware C-Corp for the client, and prepared all necessary post-incorporation documents to govern the corporation's operations and protect its intellectual property.
- Increase in Share Capital of Nigerian Entity: In order to transfer the shares of all the shareholders in the Nigerian company to the newly formed Delaware corporation, we advised the client of the need to comply with the minimum share capital requirement for foreign participation in a Nigerian company as stipulated by the Companies and Allied Matters Act (CAMA). To this end, we prepared the required documents and applied to the Corporate Affairs Commission (CAC) to increase the share capital of the Nigerian company.
- Transfer of Shares: We advised the company on the procedure for transferring the shares from all existing shareholders to the Delaware corporation. This had entailed each shareholding signing a deed surrendering their shares in the Nigerian company back to the company in exchange for acquiring the same percentage of shares in the Delaware corporation, and the Nigerian company allotting the surrendered shares to the Delaware corporation by a resolution of the shareholders approving the allotment, and filing the resolution with the CAC for approval of the transaction.
Result
We successfully transferred the ownership of our client’s Nigerian company to the newly formed Delaware corporation, thereby making the Delaware corporation the sole shareholder of the Nigerian company, while complying with all applicable Nigerian and Delaware statutory requirements.
Working with the Acelera Law team to handle our restructuring among many others, has been one of the most fulfilling parts of running Getequity. That I haven’t run mad with so many legal hurdles we have faced is largely because of the team which is why I recommend them to anyone that can hear.
- CEO. Jude Dike Getequity
