The Nigerian Senate on 15 May 2018, passed a Bill for an Act to repeal and re-enact the Companies and Allied Matters Act, 1990 (the Bill). The proposed Bill called the Companies and Allied Matters Act, 2018 (CAMA), went through the third reading at the Senate and now awaits final assent by the President.
The Bill allows an individual to set up a company unlike the current situation which requires involvement of two or more people.
It also promotes the use of technology in the registration of new businesses by providing legal backing to the existing e-registration system which would allow individuals to register their businesses from anywhere in the world.
Other highlights of the proposed changes in the Bill include:
- Creation of Limited Liability Partnership (LLP) as a new form of investment vehicle for businesses in Nigeria
- Reduction of minimum share capital for all companies and start-ups in Nigeria to encourage more investments and create new jobs
- Removal of some regulatory provisions, such as the requirement for annual general meetings and company secretaries for small companies
The passage of the Bill by the Senate is in furtherance of the Federal Government’s efforts to improve the ease of doing business in Nigeria by creating an enabling environment for businesses to thrive, which will ultimately boost foreign investment in the economy.
It is now left for the Presidency to fast track the final assent of the Bill as prolonged delay may give room for uncertainty amongst the stakeholders as well as investors, and impact negatively on the efforts directed at improving the business environment in Nigeria.