President Muhammadu Buhari signed the Companies and Allied Matters Bill (CAMA) On 7th August 2020. The newly introduced CAMA Act, 2020 which was recently passed into law by the National Assembly, repealed the Companies and Allied Matters Act 1990 which had been in operation for 30 years.
The CAMA Act 2020 introduces changes that will accelerate the ease of doing business, minimising regulatory barriers, and bringing business operations in Nigeria in line with global best practices and procedures. The Corporate Affairs Commission (CAC) is expected to implement the new CAMA accordingly.
Here are key highlights of CAMA 2020 you need to know:
- Provisions for a single member/shareholder companies whereby, under the CAMA 2020, a private company can be established with only one member or shareholder;
- Authorized Share Capital has now been replaced with Minimum Share Capital. Thus, the promoters of a business do not need to pay for shares that are not needed at a specific time with the introduction of minimum share capital provision;
- Filing, share transfer, and meetings can now be done electronically by private companies;
- Annual General Meetings can now be held virtually for all companies;
- Introduction of Statement of Compliance which can be signed by an applicant or his agent, confirming that the legal requirements with respect to registration have been complied with. This serves as an alternative to the requirement to submit a Declaration of Compliance, which required the signature of a lawyer or attestation before a notary public;
- Exemption of small companies or companies with single shareholders from the requirement to appoint Auditors;
- The requirement for appointment of a company secretary is now optional for private companies;
- Introduction of Limited Partnerships and Limited Liability Partnerships in Nigeria which provides the organizational flexibility and tax status of a partnership with the limited liability of members of a company for partnerships;
- Reduction of filing fees for registration of charges;
- The merger of Incorporated Trustees ;
- Restriction on multiple directorships in public companies, this prohibits a person from being a director in more than five public companies at the same time;
- Business rescue provisions for Insolvent Companies;
- Enhancement of Minority Shareholder Protection and Engagement – The Act restricts private companies from appointing a director to hold the office of the Chairman and Chief Executive Officer.