The Ag. Registrar-General of the Corporate Affairs Commission, Lady Azuka Azinge has emphasized the imperatives of a Presidential assent to the Companies and Allied Matters (CAM) Bill.
LadyAzinge stated this while briefing newsmen on the status of the amendment of the Companies and Allied Matters Bill, 2019.Companies and Allied Matters (CAM) Bill.
The Ag. Registrar-General stressed that the amendments were in line with President Muhammadu Buhari administration’s reform agenda to create an enabling environment for businesses to thrive.
She disclosed that the CAM Bill had been passed by the 8th Assembly and awaits Presidential Assent.
According to her, the major thrust of the CAM Bill includes:
TO EASE STARTING AND GROWING BUSINESS IN NIGERIA BY:
• abolishing the requirement for a company to have an authorised share capital;
• enabling a single person to form a private company;
• significantly updating the rules on insolvency;
• introducing, for the first time, a business rescue process;
• introducing close-out netting provisions; and
• the concept of limited liability partnerships.
TO ENSURE MORE APPROPRIATE REGULATION FOR MICRO, SMALL AND MEDIUM SCALE ENTERPRISES BY:
• making it optional for smaller companies to have a company Secretary;
• making it easier for smaller companies to comply with accounting requirements;
• making it optional for one-man and small companies to hold an annual general meeting;
• Introducing separate model articles of association for private companies that will contain the
minimum key rules on the internal workings of the company.
TO ENHANCE TRANSPARENCY AND SHAREHOLDER ENGAGEMENT BY:
• Increasing transparency and disclosures on beneficial ownership to determine persons with power to
exert significant level of influence or control over the decisions and actions of a company.
TO ALIGN REGULATORY FRAMEWORK WITH INTERNATIONAL BEST PRACTICE FOR COMPETITIVENESS AND THUS ENHANCE
THE EFFICIENCY OF THE REGULATORY PROCESS BY:
• Introducing measures to make company law better fitted to modern business realities, improve the business environment and performance across the economy as well as reduce direct compliance costs for businesses.
IN THE CONTEXT OF A GLOBAL ECONOMY, TO MAKE NIGERIA AN INVESTMENT DESTINATION OF CHOICE BY ATTRACTING, RETAINING AND GROWING INVESTMENTS
• Introduces orderly and more effective procedures for business rescue and resolving insolvency: Administration, Company Voluntary Arrangement and Netting.
Lady Azinge elaborated on the major highlights of the CAM Bill as tabulated below:
SUBJECT BENEFIT
1. Inclusion of Representative of the Micro, Small & Medium Enterprises on the Board of the Commission
• Inputs from MSME at the policy formulation level of the Commission.
• Promotion of policies that will enhance the regulatory environment for and growth of Micro,
Small and Medium Enterprises (MSMEs).
2. Pre-action Notice
• Reduction litigation for the Commission.
• Faster resolution of issues with the Commission.
• Lower cost to resolution of disputes by the Commission.
3. Right of One Person to Form a Company
• Reduction of entry barriers for smaller businesses.
• Migration of sole-proprietorships from the business names to companies.
• Reduction in shareholder-wranglings arising from distrust and mutual suspicion.
• No requirement of secretary.
• No annual general meeting.
• Minor may only join in formation of and not solely form a company.
4. Removal of Consent of Attorney-General of the Federation for Registration of (Memorandum of) a
Company Limited by Guarantee
• Faster registration of companies limited by guarantee.
• Cheaper registration of companies limited by guarantee.
• Increase in registration of companies limited by guarantee seeking to provide much needed
aid and empowerment for the Nigerian people.
5. Abolition of Authorised Share Capital and Introduction of Minimum Issued Share Capital
• Reduction of cost of registration (no front-loading of costs).
• Support of operations of MSMEs.
• Prevention of opportunities for unlawful dealings in unissued shares.
6. Model Articles of Association
• No requirement to register articles of association where model articles apply.
7. Removal of Requirement of Statutory Declaration of Compliance by Legal Practitioner for
Registration of Company
• Statement of compliance not required to be under oath.
• Cheaper cost of registration.
• Directly registration by directors or subscribers of companies.
• Faster registration of companies.
8. Optionality of Common Seal
• Enhancement of ease of doing business.
• Authentication of documents may be simply by signatures of directors and secretary or other
persons so authorised.
9. Disclosure of Persons with Significant Control
• Enhancement of corporate transparency with regards to ownership and control of companies and
limited liability partnerships (LLPs).
• Prevention of asset shielding.
• Combats money laundering, terrorism financing and other illicit or criminal activities
using companies as vehicles.
10. Electronic Transfer of Shares
• Enhancement of ease of doing business
11. Reduction in Filing Fees for Registration of Charges by 65%
• Reduction in cost.
• Enhancement of ease of doing business.
12. Exemption of Small and One-man Company from Requirement to Hold Annual General Meetings (AGM)
• Reduces operational burden.
• Enhancement of ease of doing business by MSMEs.
13. e-Meetings for Private Companies
• Participation from any location.
• Cheaper access to meetings.
• Promotion of higher level of shareholder participation.
• Enhancement of ease of doing business by MSMEs.
14. Restriction on Multiple Directorship in Public Companies
• Reduction in conflict of interests.
• Enhancement of directors’ effectiveness in management of companies.
• Promotion of corporate transparency and accountability.
15. Display of Audited Accounts by Public Companies on Website
• Promotion of corporate transparency and accountability.
16. Exemption of Small Companies Dormant since Incorporation from Audit Requirements
• Enhancement of ease of doing business by MSMEs.
• Enhancement of the integrity of accounts by MSMEs.
17. Company Voluntary Arrangement
• Opportunity for company in distress to initiate a composition or scheme of arrangement in
settlement of its debt.
• Available even where the company is in administration or under winding up.
18. Administration of a Company
• Affords company in distress an alternative to receivership.
• Primary objective to rescue the company, the whole or any of its undertaking.
• However appointed, Administrator represents interest of company’s creditors as a whole.
19. De-Registration of a Company at the Instance of the Company
• Dormant company or company with no undischarged obligation may initiate.
• Enhancement of supervision of active companies.
20. Netting
• Allows a party to terminate financial contract if the other party becomes insolvent.
• Mitigates risks associated with performance of large financial transactions.
• Promotes financial stability and investor confidence.
21. Limited Liability Partnership
• Enjoys privileges of a body corporate.
• Less formal and stringent incorporation requirements.
• Profit sharing is by written agreement between partners.
• Combines organizational flexibility of partnership with limited liability for its members.
22. Limited Partnership
• Promotion of access to private equity funds.
• Limitation of liability for “sleeping” partners who provide funds.
23. Electronic Filing and Issue of Documents
• Enhancement of service delivery.
• Cheaper cost of obtaining and providing service.
According to Lady Azinge, when passed into law, the Bill will open up the business space, enhance the development of Micro, Small and Medium Enterprises (MSMEs), create employment, and generate wealth for rapid economic growth consistent with the Economic Recovery and Growth Plan (ERGP) of the present administration.
