President Muhammadu Buhari on Friday assented to the Companies and Allied Matters Bill, 2020 recently passed by the National Assembly, which reforms the 30 yeaars existing laws.
The Act now makes it compulsory for the disclosure of persons with significant control of companies in a register of beneficial owners to enhance corporate accountability and transparency; unlike the hitherto situations where promoters were unknown.
The President’s assent on the legislation, repealed and replaced the extant Companies and Allied Matters Act, 1990, after 30 years, introducing several corporate legal innovations geared toward enhancing ease of doing business in the country.
The innovations include amongst other things, enabling the reduction in filing fees and other reforms to make it easier and cheaper for small and medium-sized enterprises to register and reform their businesses in Nigeria;
The new law also allows 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;
The Act allows for the processes and procedures to ease the operations of companies, such as introducing Statements of Compliance; replacing “authorised 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 physical meetings due to the COVID-19 pandemic;
It will also enhance the minority shareholder protection and engagement; introducing enhanced business rescue reforms for insolvent companies; and permitting the merger of Incorporated Trustees for associations that share similar aims and objectives.