CAMA 2020: 15 business-friendly provisions in Nigeria’s new Companies and Allied Matters Act
By Business Made Easy Nigeria
President Muhammadu Buhari signed into law the Companies and Allied Matters Act (CAMA) on August 7, 2020. The new CAMA is Nigeria’s most significant business legislation in three decades and it introduces new provisions that promote ease of doing business and reduces regulatory hurdles.
Unfortunately, one Lagos based Bishop is fighting this new law just because the new law will give the authorities power to curb religious financial fraud.
However, this article is for young business people like you to know the positive aspects of the new law and take advantage of the positive aspects:
- Provision of single-member/shareholder companies – S.18(2) of the new CAMA now makes it possible to establish a private company with only one (1) member or shareholder.
- Introduction of Statement of Compliance – S.40 (1) of the new Act introduces the Statement of Compliance which can be signed by an applicant or his agent, confirming therein that the requirements of the law as to registration have been complied with. This serves as an alternative to the requirement to submit a Declaration of Compliance, which must be signed by a lawyer or attested to before a notary public. A Statement of Compliance need not be signed by a lawyer.
- Replacement of Authorized Share Capital with Minimum Share Capital – The concept of “authorised share capital” has now been replaced in S.27 of the Act with the concept of “minimum share capital”. With minimum share capital, promoter(s) of a business need not pay for shares that are not needed at a specific time.
- Procurement of a Common Seal is no longer a mandatory requirement – The procurement of a Common Seal is no longer a mandatory requirement according to
S.98 of the new CAMA: Every company is required under the previous Act to have a common seal, the use of which is to be regulated by the Articles of Association. This amendment is in line with international best practices as most jurisdictions around the world have expunged the requirement from their respective laws.
- Provision for electronic filing, electronic share transfer and e-meetings for private companies – The new CAMA makes provision for electronic filing, electronic share transfer and e-meetings for private companies. S.861 of the new CAMA provides that certified true copies of electronically filed documents are admissible in evidence, with equal validity with the original documents. S.176(1) also provides that instruments of transfer of shares shall include electronic instruments of transfer.
- Provision for virtual Annual General Meetings – The new CAMA also provides for remote or virtual general meetings, provided that such meetings are conducted in accordance with the Articles of Association of the company. This will facilitate participation at such meetings from any location within and outside the shores of the country, at minimal costs. This is especially relevant today given the disruptions caused by the Covid-19 pandemic to company operations around the world.
- 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 to audit the financial records of the company. S. 402 of the new CAMA provides for the exemption in relation to the audit of accounts in respect of a financial year.
- Exemption from the appointment of company secretary – The appointment of a Company Secretary is now optional for private companies. According to S. 330 (1) of the new CAMA, the appointment of a company secretary is only mandatory for public companies.
- Creation of Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs) – The new CAMA introduces the concept of Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs). This combines the organisational flexibility and tax status of a partnership with the limited liability of members of a company.
- Reduction of Filing Fees for Registration of Charges – Under S. 223 (12) of the new Act, the total fees payable to the CAC for filing has been reduced to 0.35% of the value of the charge. This is expected to lead to up to 65% reduction in the associated cost payable under the regime.
- Merger of Incorporated Trustees – S. 849 of the new Act provides for merger between two or more associations with similar aims and objects under such terms and conditions as may be prescribed by the CAC.
- Disclosure of persons with significant control in companies – S.119 of the new Act introduces new transparency provision with an obligation for entities to disclose capacity in which shares are held, either as a beneficial owner or as a nominee of an interested person.
- Restriction on Multiple Directorship in Public Companies – S.307(1) of the Act prohibits a person from being a director in more than five (5) public companies at a time.
- Business Rescue provisions for Insolvent Companies – The new Act introduces a framework for rescuing a company in distress and to keep it alive as against allowing such entity to become insolvent. Provisions were made with respect to Company Voluntary Arrangements (S.434 to S.442), Administration (S.443 to S.549) and Netting (S.718 to S.721).
- Enhancement of Minority Shareholder Protection and Engagement – S. 265 (6) restricts firms from appointing a director to hold the office of the Chairman and Chief Executive Officer of a private company.
Reference: Premium Times
APPOINTMENT OF WTO CHIEF IN DOUBT AFTER KEY MEETING CANCELLED
APPOINTMENT OF WTO CHIEF IN DOUBT AFTER KEY MEETING CANCELLED
• Nigeria’s Ngozi Okonjo-Iweala had been expected to be confirmed as leader on Monday
By Richard Partington
The race to find a new leader of the World Trade Organization has been thrown into renewed uncertainty after the cancellation of a key appointment meeting following the US presidential election.
The Geneva-based WTO, which acts as an international arbiter for trading disputes, said it had put off a meeting scheduled for Monday that had been called to appoint Nigeria’s Ngozi Okonjo-Iweala as its next director general.
Donald Trump’s administration opposed her selection in one of its final acts before the US election, despite the former Nigerian finance minister securing the overwhelming backing of the WTO’s 164 members.
The special meeting of the trade body’s general council had been convened to take a formal decision on the appointment. Officials had been set to put forward Dr Okonjo-Iweala as the candidate most likely to attract a majority, after most countries expressed a preference for her over South Korea’s Yoo Myung-hee.
Okonjo-Iweala had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing backing from the EU, China, Japan and Australia. Liam Fox, the leading Brexiter and former international trade secretary, had run as the UK government’s preferred candidate but failed to win enough support from other countries to reach the last two in the process.
Trade experts said Joe Biden defeating Trump in last week’s election may have led to countries calling for a delay in the WTO leadership race, with the aim of securing the Biden White House’s backing for Okonjo-Iweala after he takes charge in January.
The delay in selecting a new WTO director general comes at a fragile moment for the world economy amid the second wave of Covid-19, and after years of criticism of the WTO and calls for reform from Trump.
The WTO said the meeting would be postponed until further notice, during which time the organisation would continue undertaking consultations with delegations from countries around the world to pick a new leader.
It said in a statement: “For reasons including the health situation and current events, delegations will not be in a position to take a formal decision on 9 November.”
UNITED ARAB EMIRATES LIFTS VISA RESTRICTION ON NIGERIANS, SAYS GOVERNMENT
UNITES ARAB EMIRATES LIFTS VISA RESTRICTION ON NIGERIANS, SAYS GOVERNMENT
BY SAHARAREPORTERS, NEW YORK
The United Arab Emirates has agreed to resume visa issuance to Nigerians, the government has said.
Hadi Sirika, Minister of Aviation, announced this via his Twitter handle on Wednesday.
He disclosed that the move was to allow Emirates Airlines resume operations in Nigeria
He said, “UAE has written to state that they agree to issue visas to Nigerians, consequently decision has been reached to allow Emirates to fly into Nigeria.
“Commencement of the Visa issuance is condition precedent. Please bear with this unusual situation. Many thanks.”
UK RETURNS $100,000 CONFISCATED FROM DUPED NIGERIAN BUSINESSMAN
UK RETURNS $100,000 CONFISCATED FROM DUPED NIGERIAN BUSINESSMAN
Mr Danu had protested the seizure of the money saying it was his legitimate earning and that he declared it with customs.
The United Kingdom has returned the sum of $100,000 confiscated by airport security from Nigerian businessman, Nasiru Danu, after a court gave judgment in his favour in a confiscation suit.
Court documents and banking details seen by this newspaper showed that the money was paid with interest that accrued in the last one year as ordered by a magistrate court on September 7.
Mr Danu was intercepted by officials of the United Kingdom Border Force and Immigration officials on arrival at the London airport on September 13, 2019 after his then newly-acquired Maltese passport with which he travelled there turned out to be fake.
The businessman, PREMIUM TIMES gathered, was duped of $35,000 by a ‘travel agency’ which offered to help him obtain a Maltese passport. Unknown to him the passport delivered to him by the agency was fake.
On returning to Nigeria, Mr Danu petitioned the State Security Service (SSS) over the passport fraud and his resultant arrest and deportation from the UK.
The SSS later referred the case to the Economic and Financial Crimes Commission (EFCC) which is now pressing charges against one Rabbi Okpara.
PREMIUM TIMES had in December reported how Ms Okpara was docked by the EFCC before an FCT High Court for allegedly defrauding Mr Danu and other unsuspecting Nigerians.
Ms Okpara is the owner of Green Valley Concept Limited, a purported travel agency.
EFCC investigators said Ms Okpara used her travel agency to lure unsuspecting members of the public to buy into a sham travel/residency arrangement in Malta.
The EFCC said Ms Okpara in her statement to the agency admitted to liaising with a third party, one Mr Ugbaja, in obtaining these fake travel document for her clients.
Count one of the charges reads: “That you Rabbi Okpara and Jude Ugbaja(at large) sometime in August 2019, within the jurisdiction of this honourable court conspired between yourselves to do an illegal act, to wit; causing to be used as genuine forged documents, thereby committed an offence contrary to section 3(6) of the Miscellaneous Offences Act, CAP, MI7 laws of Federation Nigeria, 2004 and punishable under the same act.”
Count two reads: “That you Rabbi Okpara, Jude Ugbaja ( at large), Green Valley Concept Ltd and Palmary Travels and Tours Ltd, sometimes in August 2019 in Abuja within the jurisdiction of this honourable court forged a maltase passport with the name Nasiru Haladu Danu with number 9647443 dated 27 April/AVR 2018 with intent that it be used as genuine; thereby committed an offence contrary to 320(a) of the Penal Code, Law of the Federation 1990 and punishable under section 322 of the same law.”
Seized cash returned
Aside deporting Mr Danu to Nigeria on his arrest at the airport in September, the UK authorities also took possession of $100,000 found on the businessman.
The businessman had protested the seizure of the money saying it was his legitimate earning and that he declared it appropriately with customs authorities in Nigeria before travelling with it to the UK.
Mr Danu also explained that he travelled with that amount of cash because his credit card had failed him repeatedly, leaving him stranded on a number of occasions.
But despite his explanations, the UK authorities seized the cash and approached a court for confiscation hearing.
However, the legal team for Mr Danu challenged the UK Border agency’s move to permanently confiscate the money. They succeeded.
“The court found that the security officials were wrong to seize the money as the money was from legitimate income which was not intended for an unlawful purpose and should therefore be returned to the owners,” said Mr Danu’s lawyer, Femi Joshua.
Mr Danu’s Nigerian Bank account was credited with the money with interest in two tranches of $50,471 on September 23, according to documents seen by PREMIUM TIMES.
When contacted Tuesday, Mr Danu said he was pleased that the court noted that he was a victim of crime by a syndicate which swindled him and sold him a fake passport.
“The court saw that I am a legitimate and honest businessman and that the cash found on me were legitimately earned and properly declared,” Mr Danu said.