As we all know the President Mohammed Buhari administration just passed into law the CAMA 2020 on the 7th day of August 2020. The new CAMA slightly watered down the sections of the Act and eased the business sector to enhance growth.
It comes with certain innovative provisions but Most of its provisions remain same.
So what is new in CAMA then? They are listed hereunder:
- It is now legal and possible to establish a private company with only one (1) member or shareholder. S.18(2)
- The requirement during company registration to submit a “Declaration of Compliance”, which must be signed by a lawyer or attested to before a notary public is now relaxed to a mere “Statement of Compliance” which can now be signed by an applicant or agent or a lawyer. S.40 (1)
- The New CAMA replaces “Authorized Share Capital” with “Minimum Share Capital” – S.27.
- The procurement of a Common Seal is no longer a mandatory requirement under the new CAMA-
- S.98 in line with International best practices
- The new CAMA envisages the new normal by providing for electronic filing, electronic share transfer and e-meetings for private companies – S.861 and S.176(1)
- The new CAMA Provides for virtual or remote AGMs– Envisages the disruptions caused by the Covid-19 epidemic to company operations around the world
- Small firms or company with a single shareholder are exempted from appointing auditors at the AGM to audit financial records of the company. S. 402
- Appointment of a Company Secretary is now optional for private companies but mandatory for only PLCs S. 330 (1) of the new CAMA
- The new CAMA provides for Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs) combining structural flexibility including tax status of a partnership with the concept of limited liability of members of a company.
- Reduction of Filing fees payable for filing of a charge to 0.35 % S. 223 (12)
- S. 849 of The new CAMA now provides for merger between two or more ITs (associations/NGOs, foundations, charities etc) with similar aims and objects
- S.307(1) of the new CAMA prohibits a person from being a Director in more than five (5) public companies at a time.
- The new CAMA provides for Business Rescue mission/framework for Insolvent Companies by way of Voluntary Arrangements (S.434 to S.442), Administration (S.443 to S.549) and Netting (S.718 to S.721).
- Increased minority protection – The Chairman cannot serve as CEO of private company (s. 265(6)
In addition to the afore listed changes/ innovations, the numbering of CAMA changed as well e.g
- Part A that used to be incorporation of companies is now tagged Corporate Affairs Commission.
- Part B that used to be Business name is now Incorporation of Companies
- Part C that used to be Incorporated Trustees is now the new Limited Liability Partnership
- Part D that used to be Short Titles/ Schedules is now the new Limited Partnership
- Introduction of Part E: Business Names
- Part F: Incorporated Trustees
- Part G: General
Like I mentioned earlier, apart from these new sections every other sections in CAMA are still intact.
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