#NBASBL2022: Stakeholders Appraise Implications Of The Amended Company And Allied Matters Act, 2020 On Nigeria’s Business Environment

*New Regulatory Framework Creates Win-Win Situation For Corporate Entities And Government Agencies In Public Interest – CAC Director Of Compliance, NDIA
*SMEs Should Stay Abreast With Statutory Regulations And Ensure Compliance With Guidelines — Mosuro
*Introduction Of Electronic Filing By CAC A Step In the Right Direction — Ikongbeh
*There Are Several Modules Which Lawyers Can Exolore For Clients Under CAMA 2020— Amina

Stakeholders in Nigeria’s Corporate and business sectors have lauded the significant improvements made in the amended Companies and Allied Matters Act, 2020 (“CAMA 2020”) and the fresh provisions which are geared towards further liberalisation of Nigeria’s business environment.

This took place at the ongoing 16th Annual Business Law Conference of the Nigerian Bar Association’s Section on Business Law (NBA-SBL), Abuja with the theme “Recent Developments in the Business Law Environment”.

Speaking at the first plenary session on the topic: “CAMA 2020: The Journey So Far”, the Registrar-General, Corporate Affairs Commission (CAC), Alhaji Garba Abubakar, who was ably represented by Director of compliance, Mr. Justin Ndia, noted that Act, was aimed at streamlining the regulatory framework in a way that creates a win-win situation for corporate entities as well as help government agencies to fulfil their statutory responsibilities to society, and protect public interest.

Mr Ndia noted that under the old and new Acts, companies are obligated to file share transfers. He also urged companies not to rely on the records of the commission. “The law said for you to be a shareholder, you must have share certificates and your name registered as a member of that company. That is what determines who a shareholder is.

“It will be wrong from the practical perspective to rely on the share transfer instrument that has been filed with the commission to determine who the shareholder is.

“Members of the Administration should maintain records on members and should give share certificates to them.”

The Principal/Founder of Everlaw Associates , Marx Ikongbeh said the CAC, has done a lot by bringing in development in the area of electronic filing. He also added that the Act has also incorporated novel provisions on the transfer of shareholding and sale of a private company’s assets. Unlike the CAMA 2004 which made it compulsory for private companies to restrict the transfer of shares by their Articles of Association (“Articles”), under the CAMA 2020, private companies are now at liberty to determine whether or not to incorporate restrictive provisions on share transfer by their Articles. These provisions are however necessary to prevent the acquisition of company shares by third parties who may not have the best interest of the company at heart.

Comparing how the 2020 CAMA has made it easier for SMEs to do their businesses and that of the previous CAMA 2004, Managing Director of Adcax Nominees Limited, Felicia Mosuro, said that the 2020 CAMA has allowed companies to have a single shareholder which she sees as a welcome development. She said before now, sole member of a company was impossible, leaving founders to look for family members or associates to subscribe to at least one share or to register as a “business name” or “sole proprietorship” which does not offer the legal protections and benefits associated with limited liability companies.

“The concept of Limited Liability Partnership has allowed us to have flexibilities on taxations, perpetual AGM, Board meetings, and conference meetings can hold without having shareholders. She encouraged SMEs to keep track of its progress by maintaining record keeping, holding quarterly board meetings, keeping statutory reports, having audited accounts, having statutory guidelines regulations for the business to ensure that everything is done properly, get someone who comes to check the account from time to time if the company does not have an accountant.”

The Managing Associate at Udo Udoma & Belo-Osagie, Amina Ibrahim, said that there is no progress without innovation. “You are not supposed to fight innovation rather you should embrace it.

“One of the ways we can calm the minds of the people is to look at the limited liability partnership as well as the sole partnership. The benefits are quite much.

“There are no requirements for companies to meet, no share capital. The incomes/earnings of the companies are shared to the partners which the partners in turn will pay their income tax. So there’s no need for the company to pay tax and the company is able not to pay double taxation.

“They are no required to hold Annual General Meeting, this to me is what businesses that want to survive and thrive should be concerned about. This same practice also extends to limited liability partnership.

“The company determines what goes into the agreement, the partnership can have perpetual succession, and the liability is limited to the properties owned within that partnership and does not extend to the assets owned by individuals.

She added that there are several modules provided by CAMA 2020, that lawyers can choose from when advising clients.

The event which took place at Transcorp Hilton, Abuja, had a Partner at the commercial law firm of Banwo & Ighodalo, Toyin Bashir, as the moderator.