President Muhammadu Buhari has signed the Companies and Allied Matters Act, 2020 (CAMA 2020) to reform and improve Nigeria’s business environment
The new act repeals and replaces the Companies and Allied Matters Act, 1990, 30 years after the previous law was signed.
According to the analysts, the new law will help in improving the business climate, reduce regulatory hurdles and help in the Nigeria’s quest to improve its ease of doing business index.
The concept of ‘authorised share capital’ has further been replaced with the concept of ‘minimum share capital.’ With the new law, promoters of business need not pay for shares not needed at a specific time.
The amended version also provides for remote virtual meetings provided that such meetings are conducted with the Articles of Association of the company and the idea that such an amendment will facilitate participation from any location at minimal costs.
The act prohibits a person from being a director in more than five public companies at a time.
For a company in distress, the act introduces a framework to keep it alive as against allowing the company to become insolvent with respect to company’s voluntary arrangements, administrations and netting.
Good forward, a company can now be established with only one member or shareholder, and such company will no longer be mandated to appoint auditors at the annual general meeting.
The new law exempts the procurement of a mandatory common seal, which was mandatory under the previous act, in what is said to be in conformity with international best practices as most jurisdictions are said to have expunged such requirements from their respective laws.
Statement of compliance can also be signed by an applicant or the agent unlike the old law where a declaration of compliance has to be signed by a legal practitioner or attested to before a notary public.
