The House of Representatives on Thursday passed the business friendly Companies and Allied Matters Act (CAMA) 2018 through Third Reading.
During the consideration of the bill which emanated from the Senate, the lawmakers at the Committee of the Whole passed all the 871 clauses, 15 Schedules and explanatory memorandum.
The new CAMA bill which seeks to provide for the incorporation of companies, Limited Liability partnerships, limited Partnerships, Registration of Business Names together with incorporation of Trustees of certain communities, bodies and associations, replaced 29 year old Act promulgated in 1990.
Clause 18 of the bill makes it possible for a single person to form a private company for the first time in Nigeria, as obtained in developed economies such as United Kingdom, India and Singapore.
Clause 184 of the bill also provided that ‘companies can provide financial assistance to their shareholders, against the initial clause which prohibited a company from giving loans, gifts, indemnities, credit or other assistance for the purpose of aiding a person to purchase the company’s shares, where such financial assistance would result in a reduction in the net assets of the company or result in the company having no assets.
In the same vein, the bill provides for exemption of small companies from appointing auditors if it has not carried on business since its incorporation, or in particular financial year and where the company’s turnover is not more than N10 million and its balance sheet total is not more than N5 million.
The new bill also remove the bureaucratic bottlenecks in obtaining Attorney general’s consent in registering Companies limited by Guarantee, as well as enhance minority shareholder rights; regulate related party transactions and shareholders access to judicial redress, among others.
“As a result, the entire Nigerian business landscape has been heavily constrained by several provisions in the act which has been described as impeding modern business practices in the light of national and global business reforms.
“It has therefore been determined that the provisions of the Act are not in tandem with global trends and that requires so many amendments to such an extent that it became imperative to repeal the entire CAMA and re-enact it afresh,” Gbajabiamila said.
According to the legislative brief of the new bill, which was sent from the Senate for concurrence, it has new features that makes doing business in Nigeria a lot easier.
“it should be reiterated that this bill is the boldest reform attempt in Nigeria’s corporate environment in the last 28 years.
“In order for Nigeria to improve its standing in World Bank Doing Business (WBDB) ranking Index, it needs to improve on its ease of establishing and running businesses and bring its business legal regime in tandem with modern advances,” the legislative brief further explained.
While ruling, Yussuff Lasun, Deputy Speaker of the House who presided over the Committee on the Whole described the bill as the most important bill in the country as regards the ease of doing business.
KEHINDE AKINTOLA, Abuja
