President Muhammadu Buhari today 7 August signed into law Nigeria’s CAMA 2020 bill, which has lots of interesting items in it.

The new law replaces the CAMA (Companies and Allied Matters) Act of 1990. Here are a few of the interesting highights of the new Company & Allied Matters Act, 2020:

S.18: Single Shareholder

One person can now own a limited liability company. Before now, there must be at least two shareholders for a company to be registered.

S.27: Minimum Share Capital

Shareholders can register only the share capital that they will be able to take up at a specific time with the new concept of “Minimum Share Capital.” This replaces “Authorized Share Capital” requirement which forces shareholders to pay registration charges for the entire number of proposed shares what they will not take up at once.

S.40: Statement of Compliance

A company no longer requires a lawyer or a notary public to submit a Declaration of Compliance when registering a company. The amendment requires only that a Statement of Compliance be signed by an applicant or an agent seeking to register a company.

S.98: Company Seal

To supply and affix the Company Seal is no longer necessary as a condition for registering a company. Most jurisdictions around the world have done away with this requirement for a company seal.

S.119: Shareholder Disclosure

Persons who have or who represent others with significant shareholding interest in any public company are now required to disclose their identify, through a Company register that will be kept for that purpose. The register will show whether the shares are held as owner or as nominee of another.

S.223: Filing Fees

Every filing made for the registration of the company will now attract only 0.35% of the value of the charge. Government hopes that this will significantly reduce associated costs of business registration.

S.265: Chairman/CEO

One person can no longer hold the office of chairman and that of Chief Executive Officer in a company that has more than one shareholder. This measure will offer some protection to minority shareholders in a company where a majority shareholder exists.

S.307: Multiple Directorships

One person can no longer be a director in more than five public companies at the same time. This is also an effort to further democratize the boardroom and offer some protection to shareholders from majority shareholders.

S.330: Company Secretary

Appointment of a company secretary will now be optional for private companies but will continue to remain mandatory for public companies. This will further reduce the cost of running private and small limited liability company businesses

S.402 Appointment of Auditors

Single-owner companies are not required to appoint an auditor at the annual general meeting to audit their financial records. It is also a measure that reduces cost of running a business.

S.434/442: Rescue from Insolvency:

The law provides for measures to rescue a company that is about to become insolvent. Prior to now, there were no assistance for big public companies that were about to go bankrupt or declares bankruptcy. The company is simply allowed to go under.

S.849:Trustees Merger

Two or more Trusteeship Associations are allowed to merge under the new law. The only condition they must fulfil is to show that they share similar aims and objectives. Trustee companies were previously not allowed to merge.

S.861: e-Transactions:

Companies can hold e-meetings and CAC will be bound to accept certified true copies of the meeting. Same applies to all electronically filed documents and electronic transfer of shares.

The new law recognizes the march of technology as well as disruptions that pandemics could cause. Thus, companies can now hold legally recognized virtual meetings. It is a great way to get many people to participate – no matter where they are in the world – as well as maintain social distancing when occasion calls for it.

Partnership Liability

The law has created two other types of companies from the simple partnership both of which limits the liability of the partners. Before now, partners in a business are treated like sole proprietors and their personal assets can be used to offset company liability. In the new law, liability of Partners in a business will now be limited. The anended law recognizes both Limited Liability Partnership and Limited Partnerships for partnership companies. This provision will affect the tax status of a partnership as it limits the liability for members of the Company

President Muhammadu Buhari signs Nigeria’s new CAMA 2020 bill into Law. Here are 14 highlights of the new law.