The CAMA 2020 was signed into law by President Muhammadu Buhari on the 7th of August 2020. The CAMA 2020, repeals the Companies and Allied Matters Act 2004. The new Act undoubtedly made certain changes on the general outlook of doing business in Nigeria. Little wonder why a statement from the Special Adviser to the President on Media and Publicity, Femi Adesina, read: ‟ The President’s action on this important piece of legislation, therefore, repealed and replaced the extant Companies and Allied Matters Act, 1990, introducing, after 30 years, several corporate legal innovations geared toward enhancing the ease of doing business in the country.”
This ease of doing business was a necessary factor in the enactment of the CAMA 2020. According to the latest World Bank Ease of Doing Business Index, Nigeria ranked 131 out of 190 countries on the World Ease of Doing Business Index. This is not an enviable position for a country that is ranked as the 26th largest economy in the world and as such there was need to introduce innovations that were geared towards enhancing the ease of doing business in the country.
The CAMA 2020, is made up of 870 sections and divided into 7 parts. Part A provides for the Corporate Affairs Commission. Part B provides for incorporation of companies and incidental matters. Part C provides limited liability partnership. Part D, provides for limited partnership, while part E provides for business names and part F, for incorporated trustees.
The notable innovations under CAMA 2020 and its overall impact on the Nigerian business community are highlighted below.
Organisations Regulated By The CAC
Prior to the enactment of the CAMA 2020, all companies registered under the CAC must either be a private company or a public company. However, the recent amendment introduced Limited Liability Partnerships and Limited Partnerships. Also, the CAMA 2020 introduced the one-person company{OPC}. This means that such company may be owned by one person as against the old provision where a company can only be incorporated by two persons with full capacity to form a company.
Withdrawal And Cancellation Of Reserved Name
CAMA 2020 made express provision for the CAC to withdraw and cancel a reserved name when such name is identical to or nearly resembles a registered company’s name. CAMA 2020, further grants power to the CAC, to withdraw or cancel a reserved name where such name was improperly procured.
Meetings
In line with the current realities of the pandemic and advancement in technology, the CAMA 2020, now recognises the use of electronic means in holding meetings, although this provision is restricted to only private companies. As such, all public companies are mandated to hold physical meetings.
Common Seal
By virtue of section 98 of the CAMA 2020, Common seal is no longer mandatory for companies. The implication of this provision is that, the authorised signature of a company is now sufficient execution of any contract undertaken by the company. This provision does not expressly remove the right of companies to own a common seal where they wish to. However, in such situation, the design and use of that seal will be governed by the company’s articles.
Reduction Of Filling Fees For Registration Of Charges
The CAMA 2020, stipulates that the total fees payable to the Commission for filling, registration or release of a charge shall not exceed 0.35% of the value of the charge or such other amount as the Minister may specify. This section introduces a significant reduction in the fees payable for the registration of charges by 65% for private companies and 165% for public companies. The Commission is also charged to state in the register of charges, any notice restricting or prohibiting a company from creating additional charge ranking with the one already created .
Conclusion
The amendments introduced by the CAMA 2020 will have considerable impacts on the Nigerian business sphere in terms of doing business both domestically and internationally.
