President Buhari assented into LAW a reformed BILL that has changed the way companies are registered and how they can OPERATE in Nigeria.
This Companies and Allied Matters Act is the MOST IMPORTANT piece of Legislative Action that affects the Business environment in Nigeria and if you look deeply, it flows in line with the Nigerian Government commitment to ease the process of doing business in Nigeria starting from how you register your Business.
For micro, small, and medium scale business owners, here are few changes to note:
- You do not need a Lawyer or Company Secretary to register your Business
- There has been a large percentage reduction on FILING FEE (Registration Fee for Micro and Small Business Owners)
- You can now register your Business as a ONE-MAN Business, you don’t need a 2nd Director or Shareholder
- Authorized share capital is no longer a REQUIREMENT, what you have now is minimum share capital and you don’t even have to pay up to the share capital you have stated or desire as you pay per what you can afford when paying your FILING FEE.
- The section of the registration form where you usually require the services of a Lawyer to sign your declaration form or notary form has been expunged (removed) from the ACT, now you can sign your declaration form on your own. If you cannot afford the services of a Lawyer, you can simply sign yourself
- Lastly, these updated processes now make it easier for individuals to register their businesses on their own – this should encourage more small and one-man business owners to go register with the CAC.
- There are a lot of other provisions in the updated CAMA 2020 Act which affects large private companies or publicly listed companies, they are as follows and listed below:
- Procurement of a Common Seal is no longer a mandatory requirement – The
procurement of a Common Seal is no longer a mandatory requirement according to S.98 of the new CAMA: Every company is required under the previous Act to have a common seal, the use of which is to be regulated by the Articles of Association. This amendment is in line with international best practices as most jurisdictions around the world have expunged the requirement from their respective laws.
- Provision for electronic filing, electronic share transfer and e-meetings for private companies – The new CAMA makes provision for electronic filing, electronic share transfer and e-meetings for private companies. S.861 of the new CAMA provides that certified true copies of electronically filed documents are admissible in evidence, with equal validity with the original documents. S.176(1) also provides that instruments of transfer of shares shall include electronic instruments of transfer.
- Provision for virtual Annual General Meetings – The new CAMA also provides for remote or virtual general meetings, provided that such meetings are conducted in accordance with the Articles of Association of the company. This will facilitate participation at such meetings from any location within and outside the shores of the country, at minimal costs. This is especially relevant today given the disruptions caused by the Covid-19 pandemic to company operations around the world.
- 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. S. 402 of the new CAMA provides for the exemption in relation to the audit of accounts in respect of a financial year.
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*EldaDavid* is a Public Policy Practitioner who works and resides in Lagos, Nigeria. EldaDavid is the President-in-Council and Research Lead for the Nigerian Global Affairs Council – A Technology-based and Digital Media-driven Public Policy and Evidence-based Research Think-Tank that always simplifies Government Policy Positions.