It is no longer a news that the re-enacted Companies Allied Matters Act was signed into law by President Muhammadu Buhari on Friday, August 7.

The Act, which was a replacement for the 1990 Act by the 8th Nigerian Assembly in 2018, is to promote the ease of doing business in the country.

Bukola Saraki, the president of the Nigerian 8th Senate, while commenting on the Bill shortly after it was passed , described it as “a significant milestone and far-reaching” in the nation’s legislative agenda.

“Today’s passage of the repeal and re-enactment of the Companies and Allied Matters Act (#CAMA) is a significant milestone in our legislative agenda. This is by far the most far-reaching legislation ever passed by any legislature in our country,” Saraki said.

According to Business Made Easy Nigeria, an online business medium, the law is to boost the new CAM law “seeks to promote reform of the onerous legal and regulatory framework as well as administrative bottlenecks which, for close to three decades, have made doing business in Nigeria substantially difficult – particularly for Micro, Small and Medium Enterprises (“MSMEs”) – and had made the economy less attractive to investments hence less competitive.”

The key takeaways

The ICIR has taken a look at some of the critical takeaways from the law. These include;
A. Starting and running a business to become more seamless and less expensive. Under this, it includes:

The provision for a single member/shareholder company in contrast to the old ones that required at least 2 people to form a company; Declaration of compliance no longer required to be made by a Legal practitioner; Replacement of Authorised Share Capital with Minimum Issued Share Capital; Incorporation of a Private Company Limited by Guarantee – Consent of AGF no longer required; Common Seal no longer mandatory for companies; Provisions for electronic filing & issue of documents, electronic Share Transfer and e-Meetings for private companies; Exemption from Audit & Annual General Meeting; Appointment of a Company Secretary – Optional for Private Companies; Prescription of Model Articles for adoption by companies; Provisions for Limited Liability Partnership (LLP) & Limited Partnership (LP); Reduction in Filing Fees for Registration of Charges and Merger of Incorporated Trustees.

B. Corporate governance practice to improve within business organizations: Which includes the Disclosure of persons with significant control in companies; Restriction on Multiple Directorship in Public Companies and Public companies to display their Audited Accounts on Websites.

C. Clear and practical framework for resolving insolvency: Which includes Business Rescue Provisions for Insolvent Companies

The CAM Bill contains frameworks for rescuing a company in distress and keep it alive as against allowing it to go into insolvency. Hence, provisions are made with respect to Company Voluntary Arrangements (sections 435 – 443); Administration (sections 444 – 550), and Netting (sections 719– 722).

Upon coming into force of the CAM Bill, the following provisions will be in full operation:

i. A financially distressed company (or a company likely to become financially distressed) will be able to partake in a business rescue re-organization such as a Company Voluntary Arrangement and Administration, as an alternative to Winding Up.

READ MORE: https://www.icirnigeria.org/five-takeaways-from-the-new-companies-allied-matters-law/