It has been applause galore following the signing into law last Friday of the amended Companies and Allied Matters Bill by President Muhammadu Buhari. The new Act replaces the 30 year-old CAMA – Companies and Allied Matters Act of 1990.
Several headlines have tagged the new law as ‘Innovative’, ‘promotes ease of doing business’, ‘bold step’, ‘best practices’, ‘most significant business legislation in three decades’, ‘reduces regulatory hurdles’, and so on.
In some ways, these tags are right, at least on face value.
But we all know that laws and policies are not necessarily Nigeria’s problems. Yes, there have been policy summersaults and cartwheels that tend to throw business plans and strategies into the trash bins because some the policies have not been well thought-out or unsupported by a new administration. That is only a part of the reasons while the business climate in Nigeria has been unfriendly to many investors, foreign or local.
The main problem is in implementation of policies; and corruption seems to play a major part in this derailment of even well-made policies.
Even the bill that was signed by the President on Friday took ‘forever’ in the National Assembly. It was ‘finally’ in the House of Representatives early this year and it has taken over six months to crawl its way from through the Senate to the President’s desk and be signed into law.
But the journey did not start this year.
The House of Representatives had on Thursday, 17th January, 2019, passed the Bill for An Act to repeal the Companies and Allied Matters Act Cap C20, LFN 2004 (“CAMA”) and enact the Companies and Allied Matters Act 2018 (“the Bill”). The Bill had earlier been reviewed extensively by the Senate Committee on Trade and Investment and passed by the Senate in May, 2018 and was sent to the House of Representatives for concurrence.
The Senate had listed 6 benefits of the Bill to include:
- Making Nigeria’s business environment as competitive as its counterparts around the world.
- Empowering one person to open and run a company – unlike the current position that requires two or more people.
- Promoting the use of technology in the registration of businesses.
- Removing all the unnecessary regulatory provisions for small companies.
- Creating a new category of legal identity for Nigerian businesses and;
- Ensuring that Nigerians can now register their businesses from anywhere in the country through the e-registration system that the Senate’s amendment gives legal backing.
There is no doubt that the contents and intentions of the new CAMA are innovative and could encourage more businesses, help them grow or run smoothly.
FOR INSTANCE:
- Promoters of Corporate business can now establish private companies with a single member or shareholder.
- Limited liability partnerships and limited partnerships can now be created to give investors and business people alternative forms of carrying out their business in an efficient and flexible way.
- Filing fees have been reduced and this will enable small and medium-sized enterprises, SMEs to register and reform their businesses.
- Introduction of Statements of Compliance; replacing “authorised share capital” with minimum share capital to reduce costs of incorporating companies.
- Enhancing the minority shareholder protection and engagement.
- Provision for electronic filing, electronic share transfers, e-meetings as well as remote general meetings for private companies. This means that certified true copies of electronically filed documents are admissible in evidence, with equal validity with the original documents.
- Introduction of enhanced business rescue reforms for insolvent companies.
- Procurement of a Common Seal is no longer a mandatory requirement
- Exemption from appointing Auditors – Small companies or any company having a single shareholder are no longer mandated to appoint auditors at the annual general meeting to audit the financial records of the company.
- The appointment of a Company Secretary is now optional for private companies. It is only mandatory for public companies.
- Creation of Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs)
- Disclosure of persons with significant control in companies.
- Restriction on Multiple Directorship in Public Companies. The Act prohibits a person from being a director in more than five (5) public companies at a time.
There is no doubt that with the newly signed CAMA, the Corporate Affairs Commission will need to be restructured. It took a while for the agency to get used to online registration that eliminated the touting and other sharp practices.
Let us hope the government will have the strong will to withstand the pressures from those who were beneficiaries of the old system so that the reasons for the repeal of the old CAMA and replacement with the new Act will not be defeated.
IMAGE CREDIT: CAC, BBC.COM
Epa Ogie Eboigbe, veteran journalist, broadcaster and public affairs specialist writes on, and analyses current and historical issues with a ‘wise pen’.
