Abdulwahab Isa 
Three decades after its existence as legislation for regulating businesses in Nigeria, an amended Companies and Allied Matters ACT (CAMA) was birthed last week to deepen ease of doing business in Nigeria, Abdulwahab Isa reports
Aside the reputation of being an oil rich nation, Nigeria is celebrated as one of the world’s most lucrative places for investment. The vast population size of over 200 million citizens is bait that attracts investors. The Corporate Affairs Commission (CAC), the custodian of business registration in Nigeria, spearheaded the amendment of the Companies and Allied Matters Act. The commission said the amended bill would help strengthen its supervisory and regulatory powers. Up on till last Friday, since three decades ago, the business environment here was operated and guided by the Companies and Allied Matters Decree No. 1 of 1990. Its promulgation in 1990 repealed the Companies Act of 1968. Between 1990 and last week when the amended version of the legislation birthed, other contemporary nations had carried out series of reviews on their business legislations to suite dynamism and evolution in businesses. Nigeria rigidly stuck to 1990 CAMA as its guide for business operation.
Imperative of CAMA amendment
The 1990 CAMA legislation was Nigeria’s business doctrine for nearly three decades. The entire Nigerian corporate landscape was heavily hamstrung by several provisions in the Act described by many as impeding modern business practices. Most of the provisions in the Act had become obsolete, entirely in variance to global best principle standards. For administration that professes ease of doing business and commitment to removing hurdles on the path of investors, reviewing CAMA by expunging obsolete clauses was a priority. A modern piece of business legislation will not only drive and enhance the growth of Micro, Small and Medium Scale Enterprises (MSMEs), it will also directly affect the influx of foreign direct investment. Nigeria was ranked 145th out of 190 economies in the 2018 World Bank Doing Business (WBDB) Ranking Index. One of the indicators the WBDB team measures is the relative ease or difficulty in establishing and running a business in Nigeria. Thus, Nigeria was ranked on the Starting a Business indicator as 130 out of 190 economies. For the first time, Nigeria was also recognised as one of the top 10 most improved economies in the world. As one of the largest economies in the world, Nigeria needs to greatly improve on the ranking. The WBDB Index offers a useful and measurable assessment of economies around the world; and also serves as a resource for private sector and other stakeholders interested in investing in Nigeria. The 8th National Assembly recognised the deficiencies in the business environment and placed strong emphasis on increasing Nigeria’s competitiveness.
Legal journey
CAC has been at the forefront pushing for the reform and review of CAMA. The journey began with the 8th National Assembly when the lawmakers created National Assembly Business Environment Roundtable (NASSBER), a platform for the legislature and the private sector to engage, deliberate and act to ensure that the legal and regulatory framework within which businesses operate promotes enterprise, growth and the right conditions for investment and employment. Members of the National Assembly organised public hearing on CAMA amendment. A thorough and detailed work was done on it by members of the parliament. Both the House of Representatives and Senate of the 8th National Assembly passed the bill, considered by experts as an important tool for business reforms and transparency. However, President Muhammadu Buhari withheld his assent to the bill when it was transmitted to him. The president, according to information, was piqued that the amended version removed Attorney General of the Federation (AGF)’s powers to sign before limited by guarantee companies were registered by CAC. The amendment had taken away power from the AGF to sign before full registration of limited by guarantee companies. The 8th Assembly and CAC thought that it was too long a process going to the AGF before the registration of these companies.
Revised CAMA
The 9th National Assembly has completed legislative work on CAMA started by the 8th National Assembly even as the grey areas spotted by the President attended have been to and the bill sent back to the President for his assent. On Friday last week, President Buhari signed the amended Companies and Allied Matters Act (CAMA) into law. Some key and critical innovations contained in the new CAMA include filing fee reduction and other reforms to make it easier and cheaper for small and medium-sized enterprises to register and reform their businesses in Nigeria; allowing corporate promoters of companies to establish private companies with a single member or shareholder, and creating limited liability partnerships and limited partnerships to give investors and business people alternative forms of carrying out their business in an efficient and flexible way and innovating processes and procedures to ease the operations of companies, such as introducing Statements of Compliance; replacing “authorized share capital” with minimum share capital to reduce costs of incorporating companies; and providing for electronic filing, electronic share transfers, e-meetings as well as remote general meetings for private companies in response to the disruptions to close contact meetings due to the COVID-19. Other reforms include requiring the disclosure of persons with significant control of companies in a register of beneficial owners to enhance corporate accountability and transparency; minority shareholder protection and engagement; enhanced business rescue reforms for insolvent companies; and permitting the merger of Incorporated Trustees for associations that share similar aims and objectives. Stakeholders in business community have expressed hope in the rapid progression, dynamism both in the investments and conduct of businesses, which the revised CAMA will infuse into Nigeria’s business environment. Spokesperson of the Senate, Sen. Ajibola Basiru (APC Osun), in a statement in Abuja, said Buhari’s assent of the CAMA bill had completed the final stage for the enactment of the Act, re-pealing and replacing the 30-yearold legislation. He said assent to the bill had further demonstrated the cordial relationship between the National Assembly and the Presidency. Basiru said assent to the bill was also a validation of the efforts of the National Assembly in providing the needed legislative interventions for the resuscitation of the nation’s economy. According to him, “the amendment as passed by the Senate and House of Representatives was to strengthen the legal framework for the incorporation of companies, limited liability partnerships, limited partnerships, registration of business names, incorporation of trustees of certain communities, bodies, associations. “It is to also address incidental matters, several corporate legal innovations, geared toward enhancing ease of doing business in Nigeria. “It is not in doubt that the provisions of the repealed Act had become very obsolete. “It therefore could not effectively address challenges being faced by companies and incorporated trustees such as business rescue for insolvent companies and the merger of Incorporated Trustees for associations that share similar aims and objectives.” Basiru said it was gratifying to note that the new Act provides for innovative processes and procedures to ease the operations of companies.
Last line
The amended CAMA 2020 assented to by the President last week is the ultimate vehicle encapsulating reforms in the area of business introduced by the Federal Government. The ease of doing business initiative, antimoney laundering legislation, anti-terrorism financing and illicit financial flows won’t work in isolation without the much desired amendment.
