THE PASSAGE OF THE CAMA BILL 2020
The amended Companies and Allied Matters Act (CAMA) 2020 was signed into law on the 7th of August 2020. The introduction of this new legislation represents a much awaited change in the archaic law regulating the operation of companies within Nigeria. The aim of the new legislation is to bring forward a new era, promoting the ease of doing business and minimizing regulatory hindrances. To substantiate the changes we have highlighted below some important aspects of the new legislation.
- The provision of single membership/shareholder companies:
Prior to the passage of the bill, a minimum of two (2) member shareholders were required to establish a private company. The new legislation now provides for only one (1) member shareholder thereby making it easier for individuals to establish private companies.
2. Replacement of Authorized Share Capital with Minimum Share Capital:
Section 27 of the Act introduces the concept of ‘minimum share capital’ instead of ‘authorized share capital’. This change allow promoters the flexibility of not paying for shares that are not needed at a specific time.
3. Introduction of a statement of compliance:
Section 40 (1) of the new legislation provides for the introduction of a statement of compliance which serves as a form of confirmation that the requirements of the Act with regards to registration of a company has been complied with. Note that this statement of compliance can be signed either by an applicant or agent which in contrast to previous practice, whereby a declaration of compliance was required to be signed by a lawyer or attested to be a Notary Public.
4. Common Seal :
The requirement for the procurement of a common seal has been expunged.
5. Electronic Filings, electronic share transfer and e- meetings for private companies:
The new legislation provides for the use of electronic filing, electronic share transfer and e meetings for private companies.
6. Virtual Annual General Meetings:
The legislation promotes the use of virtual annual general meetings (AGM) therefore allowing for meetings to be conducted from any location. This provision is much needed especially in today’s environment and the new norms.
7. Exemption from appointing Auditors:
Small companies or any company having a single shareholder are no longer mandated to appoint auditors at the Annual General Meeting.
8.Exemption from the Appointment of a company secretary:
The new legislation makes the appointment of a company secretary optional for private companies.
9.Disclosure of persons with significant control of companies:
The legislation introduces a new transparency provision for the disclosure with an obligation for entities to disclose capacity in which shares are held, either as beneficial owner or as nominee of an interested person.
10. Restrictions on multiple directorships:
Section 307 (1) of the Act restricts an individual from being a director in more than five (5) public companies at a time and will be obligated at the next annual general meeting of the companies after the expiration of two years from the commencement of this Act to resign from being a director from all but five of the companies.
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