Section 104 Stamp Duties Act

Section 104 of Stamp Duties Act 1939 is about Relief from capital and transfer duty in case of reconstructions or amalgamation of companies. It provides as follows:

(1) If in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any companies it is shown to the satisfaction of a commissioner that there exist the folloiwng conditions, that is to say-
(a) that a company with limited liability is to be registered, or that since the commencement of this Act a company has been incorporated by letters patent, Act or Law, or the nominal of share capital of a company has been increased;

(b) that the company (in this section referred to as “the transferee company”) is to be registered or has been incorporated or has increased its capital with a view to the acquisition either of the undertaking of, or of not less than ninety per cent of the issued capital of, any particular existing company;

(c) that the consideration for the acquisition (except such part thereof as consists in the transfer to or discharge by the transferee company of liabilities of the existing company) consists as to not less than ninety per cent thereof- (i) where an undertaking is to be acquired, in the issue of shares in the transferee company to the existing company or to holders of shares in the existing company; or (ii) where shares are to be acquired, in the issue of shares in the transferee company to the holders of shares in the existing company in exchange for the shares held by them in the existing company, then, subject to the provisions of this section the provisions of subsections (2) and (3) of this section shall have effect with respect to the relief from capital and transfer duty as a result of the reconstruction or amalgamation of the company or companies, as the case may be.

(2) The nominal share capital of the transferee company, or the amount by which the capital of the transferee company has been increased, as the case may be, shall, for the purpose of computing the duty chargeable in respect of that capital, be treated as being reduced by either-
(a) an amount equal to the amount of the share capital of the existing company or, in the case of the acquisition of a part of an undertaking equal to such proportion of the said share capital as the value of that part of the undertaking bears to the whole value of the undertaking; or

(b) the amount to be credited as paid up on the shares to be issued as such consideration as aforesaid and on the shares (if any) to be issued to creditors of the existing company in consideration of the release of debts (whether secured or unsecured) due or accruing due to them from the existing company or of the assignment of such debts to the transferee company; whichever amount is the less.

(3) Duty under the heading “CONVEYANCE OR TRANSFER ON SALE” in the Schedule to this Act shall not be chargeable on any instruments made for the purposes of or in connection with the transfer of the undertaking or shares or on any instrument made for the purposes of or in connection with the assignment to the transferee company of any debts, secured or unsecured, of the existing company, nor shall any such duty be chargeable under section 62 of this Act on a copy of any Act or Law or on any instrument vesting, or relating to the vesting of, the undertaking or shares in the transferee company: Provided that-
(a) no such instrument shall be deemed to be duly stamped unless either it is stamped with the duty to which it would but for this section be liable or it has in accordance with the provisions of section 16 of this Act been certified by the commissioner either that it is not chargeable with any duty or that it is duly stamped; and

(b) in the case of an instrument made for the purposes of or in connection with a transfer to a company within the meaning of the Companies and Allied Matters Act, the provisions of this Cap.59 subsection shall not apply unless the instrument is either- (i) executed within a period of twelve months from the date of the registration of the transferee company or the date of the resolution for the increase of the nominal share capital of the transferee company, as the case may be; or (ii) made for the purposes of effecting a conveyance or transfer in pursuance of an agreement which has been filed, or particulars of which have been filed with the Corporate Affairs Commission within the said period of twelve months; and

(c) the foregoing provision with respect to the release and assignment of debts of the existing company shall not, except in the case of debts due to banks or to trade creditors, apply to debts which were incurred less than two years before the proper time for making a claim for exemption under this section.

(4) For the purposes of a claim for exemption under subsection (3) of this section, a company which has, in connection with a scheme of reconstruction or amalgamation, issued any unissued share capital shall be treated as if it had increased its nominal share capital.

(5) A company shall not be deemed to be a particular existing company within the meaning of this section unless it is provided by the memorandum of association of, or the letters patent, Act or Law incorporating the transferee company that one of the objects for which the company is established is the acquisition of the undertaking of, or shares in, the existing company or unless it appears from the resolution, Act or Law or other authority for the increase of the capital of the transferee company that the increase is authorised for the purpose of acquiring the undertaking of, or shares in, the existing company.

(6) In a case where the undertakings of or shares in two or more companies are to be acquired, the amount of the reduction to be allowed under this section, in respect of the duty chargeable in respect of the nominal share capital or the increase of the capital of a company, shall be computed separately in relation to each of those companies.

(7) Where a claim is made for exemption under this section the commissioner may require the delivery to him of a statutory declaration in such form as he may direct, made in Nigeria by a legal practitioner, and of such further evidence (if any) as the commissioner may reasonably require.

(8) If-
(a) where any claim for exemption from duty under this section has been allowed, it is subsequently found that any declaration or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions specified in subsection (1) of this section are not fulfilled in the reconstruction or amalgamation as actually carried out;or

(b) where shares in the transferee company have been issued to the existing company in consideration of the acquisition, the existing company within a period of two years from the date, as the case may be, of the registration or incorporation, or of the authority for the increase of the capital, of the transferee company ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so issued to it; or