The New CAMA Bill: A Step in the Right Direction
The Nigerian Senate on Tuesday, 5th May, 2018 passed the repeal and re-enactment of the Companies and Allied Matters Act which is said to be the biggest business reform bill in Nigeria in over 28 years.
Speaking on the passage of the new bill , the Senate President , Bukola Saraki on his Twitter handle said , “The passage of the repeal and re -enactment of the Companies and Allied Matters Act 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”.
“This is a pro-business law. This bill that we have just passed will show the audacity that we have to move Nigerian businesses into a new era of success and development. The CAMA will represent one of the most important legislations, we are truly now walking the talk, to say that we are ready for business in Nigeria, to support small scale industries to promote innovations, and encourage enterprise”, Saraki also said.
What are the benefits, advantages, merits and profitability the New CAMA bill offers?
✔ Single Member Company: one person can now form a company as opposed to the former requirement of two or more persons. This is especially good for start-ups and young entrepreneurs.
✔ Promotes the use of technology: the new CAMA Bill provides online registration of companies. It ensures 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.
✔ Removal of all the unnecessary regulatory provisions for small companies. The Bill is one of the most critical pieces of legislation which impacts the Nigerian business climate and the Micro, Small and Medium Scale Enterprises (MSMEs). The Bill ensures more business-friendly regulation of Micro Small and Medium Enterprises.
✔ Reduction of the minimum share capital for companies to start-up in Nigeria
✔ The Bill creates a new form of legal identity for Nigerian businesses. For instance, the Limited Liability Partnership
✔ Financial Assistance: Companies would be able to provide financial assistance to their shareholders under the new Bill.
✔ Resolving Insolvency: the Bill introduces a company rescue and insolvency legal regime which is not focused on a company's demise, but on rescuing companies from insolvency through the inclusion of an insolvency framework.
✔ Company's Secretary: the Bill seeks to further ease the regulatory burden of companies by limiting the requirement to appoint a company's secretary to public companies, thereby making it optional for small companies and companies with one shareholder.
✔ Annual General Meeting: Under the new Bill, it is not mandatory for small companies to convene and hold Annual General Meetings.
✔ Minority Shareholder's Rights: the Bill is geared towards ensuring Minority Shareholder's rights.
✔ Beneficial Ownership: the Bill has provisions which mandates the disclosure of beneficial interest in q company's shares and prescribes punitive measures for failing to disclose such interest.
✔ Exemption from Audit: the Bill has provisions which exempt small companies from appointing auditors.
✔ Fewer reporting obligations for small companies: the new Bill reduces financial reporting obligations of small companies.
✔ Time and Cost: there is reduction in the time and cost of setting up a company.
✔ Promotion of Financial Stability: especially with the introduction of the model netting provisions in the Bill.
✔ Increasing Investor Confidence in the Nigerian Financial sector as well as all sectors of the economy: Due to a competitive and business friendly environment where companies are regulated in line with global best practices, investors confidence in the Nigerian economy is increased and all sectors of the economy is expected to significantly improve.
✔ Nigeria may begin to witness increased revenue generation and job creation.
Analysts see the amendment of CAMA as a positive step further to attaining a better business environment in Africa’s largest economy, which in the long term can stimulate economic growth.
The proposed amendments would have the overall effect of making Nigerian Company Law more fit for today’s business realities, improve the business environment and performance across the Nigerian economy as a whole, as well as reduce direct compliance costs for businesses in Nigeria.
Speaking on the passage of the new bill , the Senate President , Bukola Saraki on his Twitter handle said , “The passage of the repeal and re -enactment of the Companies and Allied Matters Act 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”.
“This is a pro-business law. This bill that we have just passed will show the audacity that we have to move Nigerian businesses into a new era of success and development. The CAMA will represent one of the most important legislations, we are truly now walking the talk, to say that we are ready for business in Nigeria, to support small scale industries to promote innovations, and encourage enterprise”, Saraki also said.
What are the benefits, advantages, merits and profitability the New CAMA bill offers?
✔ Single Member Company: one person can now form a company as opposed to the former requirement of two or more persons. This is especially good for start-ups and young entrepreneurs.
✔ Promotes the use of technology: the new CAMA Bill provides online registration of companies. It ensures 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.
✔ Removal of all the unnecessary regulatory provisions for small companies. The Bill is one of the most critical pieces of legislation which impacts the Nigerian business climate and the Micro, Small and Medium Scale Enterprises (MSMEs). The Bill ensures more business-friendly regulation of Micro Small and Medium Enterprises.
✔ Reduction of the minimum share capital for companies to start-up in Nigeria
✔ The Bill creates a new form of legal identity for Nigerian businesses. For instance, the Limited Liability Partnership
✔ Financial Assistance: Companies would be able to provide financial assistance to their shareholders under the new Bill.
✔ Resolving Insolvency: the Bill introduces a company rescue and insolvency legal regime which is not focused on a company's demise, but on rescuing companies from insolvency through the inclusion of an insolvency framework.
✔ Company's Secretary: the Bill seeks to further ease the regulatory burden of companies by limiting the requirement to appoint a company's secretary to public companies, thereby making it optional for small companies and companies with one shareholder.
✔ Annual General Meeting: Under the new Bill, it is not mandatory for small companies to convene and hold Annual General Meetings.
✔ Minority Shareholder's Rights: the Bill is geared towards ensuring Minority Shareholder's rights.
✔ Beneficial Ownership: the Bill has provisions which mandates the disclosure of beneficial interest in q company's shares and prescribes punitive measures for failing to disclose such interest.
✔ Exemption from Audit: the Bill has provisions which exempt small companies from appointing auditors.
✔ Fewer reporting obligations for small companies: the new Bill reduces financial reporting obligations of small companies.
✔ Time and Cost: there is reduction in the time and cost of setting up a company.
✔ Promotion of Financial Stability: especially with the introduction of the model netting provisions in the Bill.
✔ Increasing Investor Confidence in the Nigerian Financial sector as well as all sectors of the economy: Due to a competitive and business friendly environment where companies are regulated in line with global best practices, investors confidence in the Nigerian economy is increased and all sectors of the economy is expected to significantly improve.
✔ Nigeria may begin to witness increased revenue generation and job creation.
Analysts see the amendment of CAMA as a positive step further to attaining a better business environment in Africa’s largest economy, which in the long term can stimulate economic growth.
The proposed amendments would have the overall effect of making Nigerian Company Law more fit for today’s business realities, improve the business environment and performance across the Nigerian economy as a whole, as well as reduce direct compliance costs for businesses in Nigeria.
Ohine Joy is a writer and poet. She writes from the Faculty of Law Obafemi Awolowo University.
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