Nigeria has re-enacted laws governing the registration of companies to make it more flexible, technological driven and less regulatory bottlenecks for businesses, including start-ups and entrepreneurs.
The Nigerian parliament last week made history by removing the regulatory lapses and bottlenecks for opening businesses, with the passage of the Companies and Allied Matters Act (CAMA).
The reenactment of the Company Act is seen as the biggest business reform bill in Nigeria in over 28 years. Ovie Omo-Agege (Delta Central Senatorial District) sponsored the bill
Bukola Saraki, president of the Senate said the passage of the repeal and re-enactment of the Companies and Allied Matters Act (CAMA) is a significant milestone in the legislative agenda.
“This is by far the most far-reaching legislation ever passed by any legislature in the country.”
“CAMA is a pro-business law. Its passage will show the world that ‘Nigeria is ready for business.’ By passing this Bill, the 8th Senate has shown that it has the audacity to move Nigerian businesses into a new era of development,” Saraki explained.
If approved and signed into law by the president, the company Act will create a new form of legal identity for businesses in Nigeria, limited liability partnership (LLP), which would help increase foreign investment and enable Nigerian register their businesses online.
Few highlights of the re-enacted Companies and Allied Matters Act (CAMA) include the right of an individual to open and run a company, which is good for start-ups and young entrepreneurs unlike before that regulation required two or more people; promoting the use of technology in the registration of businesses; removal of all the unnecessary regulatory provisions for small companies; and reduction of the minimum share capital for companies and start-up in Nigeria.
In the new bill, a company can reduce its share capital, if a special resolution to that effect is passed, without the burden of applying to the court for a confirmation of the reduction. It also creates a new form of legal entity – Limited Liability Company – this combines the organizational flexibility and tax status of a partnership with limited liability for its members.
Bismarck Rewane, MD of Financial Derivatives said: “The re-enactment of the CAMA will make the ease of doing business in Nigeria to be much more convenient, and this further compliments the efforts by the ease of doing business committee championed by Yemi Osinbajo, the Vice president of Nigeria.”
The amendment of the Act is coming at a time Nigeria was ranked 145th out of 190 economies in the 2018 World Bank Doing Business (WBDB) Ranking Index.