The Companies Allied Matters (CAM) Bill has passed the third reading at the Federal House of Representatives.
The Bill, which was passed by the Senate in 2018, has been described as the largest business reform bill to be passed in Nigeria in over 28 years, as it represents the re-enactment of the existing Companies and Allied Matters Act 1990 (CAMA).
A statement explained that the CAM Bill signifies meaningful progress towards aligning business practices, which had been heavily constrained by several provisions in the old 1990 Act, with global standards as it speaks to all matters affecting a company, from incorporation to winding up and insolvency.
The Bill directly affects the influx of foreign direct investment (FDI) into Nigeria due to its relevance to the ease of doing business and investing in Nigeria.
According to the legislative brief of the new Bill, it has new features that will make doing business in Nigeria a lot easier. “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 explained.
A key thrust of the Bill is therefore aimed at simplifying the process of starting and growing a business in Nigeria by abolishing the requirement for a company to have authorised share capital, enabling a single person to form a private company, introducing for the first time a business rescue process, and introducing the concept of limited liability partnership.
It also ensures more appropriate regulation for micro, small and medium scale enterprises, by making it optional for smaller companies to have a company secretary, comply with accounting requirements, and for one-man and small companies to hold an annual general meeting, as well as introducing separate models of articles of association for private companies.
In line with Presidential Enabling Business Environment Council (PEBEC) mandate, this re-enactment is a strong demonstration of the Administration’s commitment to improving the business environment, and ultimately Nigeria’s competitiveness. The passage of the Bill was promoted by the Corporate Affairs Commission (CAC), and was made possible through the collaborative efforts of several public and private sector stakeholders supported by the Enabling Business Environment Secretariat (EBES), including the Senate, the House of Representatives, the National Assembly Business Environment Roundtable (NASSBER), the Nigerian Economic Summit Group, and a number of leading commercial law firms in Nigeria.
Speaking on the development, the Secretary of the Presidential Enabling Business Environment Council (PEBEC) and Senior Special Assistant to the President on Industry, Trade and Investment, Dr. Jumoke Oduwole, was quoted in the statement to have said: “This is a significant hurdle crossed in our efforts to help businesses grow in Nigeria, and in driving our Ease of Doing Business ranking as a nation.”