The Corporate Affairs Commission (CAC) has initiated several reforms aimed at easing business registration, encouraging informal enterprises to regularize and streamline all matters relating to company incorporation in the country.
Some of these reforms have been captured in the Companies and Allied Matters (CAM) Bill 2019, which has been passed by the National Assembly and transmitted to the President for assent.
Some of the key reforms include abolishing the requirement for a company to have an authorised share capital, enabling a single person to form a private company, significantly updating the rules on insolvency, and introducing, for the first time, a business rescue process.
Other innovations in the bill meant to repeal the Companies and Allied Matters Act (CAMA), include the introduction of close-out netting provisions; and the concept of limited liability partnerships.
As the deadline for the presidential assent approaches, there are fears in the CAC and some concerned stakeholders that the reforms may not see the light of the day and this will set the country back on the progress recorded so far on ease of doing business.
Yesterday, the Acting Registrar-General of the CAC, Lady Azuka Azinge, emphasised the imperatives of a presidential assent to the CAM Bill when she briefed the media on the dangers of allowing the bill to perish.
Lady Azinge said the amendments were in line with President Muhammadu Buhari administration’s reform agenda to create an enabling environment for businesses to thrive.
The CAC boss said the CAM Bill had been passed by the 8th Assembly and was awaiting presidential assent.
She said when passed into law, the bill would open up the business space, enhance the development of Micro, Small and Medium Enterprises (MSMEs), create employment, and generate wealth for rapid economic growth consistent with the Economic Recovery and Growth Plan (ERGP) of the present administration.
The Executive Director of Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, has also called on the president to assent to the bill.
“This legislative framework will provide a legal foundation for the implementation of beneficial ownership disclosure. If signed into law by President Buhari, it will lead to the establishment of the electronic web-based open Beneficial Ownership register in Nigeria,” he said.
Rafsanjani said the real goal is the establishment of comprehensive database of real workers behind the management of private companies operating within Nigerian jurisdiction.
The bill seen and analysed by Daily Trust showed that it would ensure more appropriate regulation for MSMEs in the country.
Some of the innovations targeted at SMEs include making it optional for smaller companies to have a company secretary; making it easier for smaller companies to comply with accounting requirements; and making it optional for one-man and small companies to hold an annual general meeting.
The bill also made provision for the introduction of separate model articles of association for private companies that will contain the minimum key rules on the internal workings of the company.
The bill, reviewed by stakeholders aimed to enhance transparency and shareholder engagement by increasing transparency and disclosures on beneficial ownership to determine persons with power to exert significant level of influence or control over the decisions and actions of a company.
It aims to align regulatory framework with international best practice for competitiveness and thus enhance the efficiency of the regulatory process by introducing measures to make company law better fitted to modern business realities, improve the business environment and performance across the economy as well as reduce direct compliance costs for businesses.
To attract Foreign Direct Investments (FDIs) into the country, the bill introduced orderly and more effective procedures for business rescue and resolving insolvency: Administration, Company Voluntary Arrangement and Netting.
Further analysis of the bill showed it made provisions for the inclusion of representative of the MSMEs on the Board of CAC, pre-action notice to reduce litigation for the commission, right of one person to form a company, removal of consent of Attorney-General of the Federation for registration of (memorandum of) a company limited by guarantee. The amendments included the abolition of Authorised Share Capital and introduction of Minimum Issued Share Capital, removal of requirement of Statutory Declaration of Compliance by legal practitioner for registration of company, reduction in filing fees for registration of charges by 65 per cent, exemption of small companies dormant since incorporation from audit requirements and e-meetings for private companies.
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