President Muhammadu Buhari on Aug. 7 assented to the Companies and Allied Matters Bill, 2020.
This is the first reform of CAMA, one of the most important pieces of business legislation in Nigeria, since it was first introduced 30 years ago.
Changes that the revised Bill introduces include the following:
1. The revised Act allows single member/shareholder companies to be incorporated in Nigeria — before now the minimum number of shareholders was two (2). Now one person can incorporate.
2. The new CAMA makes it easier and cheaper for small and medium-sized enterprises to register in Nigeria, by reducing filing fees.
3. The new CAMA makes Provisions for electronic filing, electronic share transfer and e-meetings for private companies. Certified True Copies of electronically-filed documents are now admissible in court; possessing equal validity with the original documents.
4. The new CAMA allows for the creation of “limited liability partnerships” (LLP) and “limited partnerships” (LP) — which combine the tax benefits of a partnership with the greater liability protection of the owners of a private company.
5. The new CAMA enhances minority shareholder protection, by prohibiting a person from simultaneously holding the positions of Chairman and CEO of a private company.
6. With the new CAMA, procuring a common seal is no longer a mandatory requirement for companies, in line with international best practice. In other words, RIP, “common seal”
7. With the new CAMA, “Company Secretary” is now optional for private companies.
8. The new CAMA now requires the DISCLOSURE of persons with significant control/shareholding in companies, as well as the capacity of shareholding, and also nominees of interested persons, in a Register of Beneficial Owners, to enhance corporate accountability and transparency.
9. The new CAMA replaces “authorised share capital” with “minimum share capital”, to reduce the cost of incorporating companies.
10. The new CAMA expressly permits Remote general meetings for private companies. This is going to be super useful in the Age of COVID-19. Also, small companies (as defined by the Act) and single shareholder companies now exempted from the requirement of having to hold AGMs.
11. Under the revised CAMA Bill 2020, a person can no longer be a director in more than 5 public companies at a time.
12. The Revised CAMA Bill 2020 introduces Business Rescue provisions (Company Voluntary Arrangements (CVA), Administration, etc) for Insolvent companies.