President Muhammadu Buhari Friday in Abuja assented to the Companies and Allied Matters Bill 2020, recently passed by the National Assembly.
The President’s action on this important piece of legislation, therefore, repealed and replaced the extant Companies and Allied Matters Act (CAMA) 1990, introducing after 30 years, several corporate legal innovations geared toward enhancing ease of doing business in the country.
The former Companies and Allied Matters Decree (CAMD) No. 1 of 1990 was promulgated to repeal the Companies Act of 1968. Several provisions in the old CAMA impeded modern business practices in the light of national and global reforms.
The new CAMA makes Provisions for electronic filing, electronic share transfer and e-meetings for private companies in response to the disruptions to close contact physical meetings due to the COVID-19 pandemic. Certified True Copies of electronically-filed documents are now admissible in court; possessing equal validity with the original documents.
The new CAMA makes it easier and cheaper for small and medium-sized enterprises to register in Nigeria, by reducing filing fees.
It allows for the creation of “limited liability partnerships” (LLP) and “limited partnerships” (LP) – which combine the tax benefits of a partnership with the greater liability protection of the owners of a private company.
The amended CAMA also enhances minority shareholder protection, by prohibiting a person from simultaneously holding the positions of Chairman and Chief Executive Officer of a private company.
With the new CAMA, procuring a common seal is no longer a mandatory requirement for companies, in line with international best practice.
With the new CAMA, “Company Secretary” is now optional for private companies.
Business experts say the new CAMA is in line with the best global practice.