Widely regarded as Nigeria’s boldest and largest business reform legislation, the Companies and Allied Matters (CAM) Bill, which was passed last year by the senate, the upper chamber of the country’s law making body, the national assembly, on Tuesday passed the third reading at the lower chamber, the Federal House of Representatives.
A statement signed by Jumoke Oduwole, senior special assistant on industry, trade and investment to the president in the office of the vice president, noted 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.
Oduwole’s statement noted that the legislative brief of the new bill shows it has new features that will make doing business in Nigeria a lot easier.
She said 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 authorized 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.
She further explained that the bill 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,” Oduwole’s stated, adding that 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.
Oduwole, who also doubles as the secretary of the Presidential Enabling Business Environment Council (PEBEC), in specific response to the bill passing the third reading in the house 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.
“We congratulate every Nigerian on this achievement, and we applaud the several partners that came together in partnership to make this work. We look forward to receiving the Bill for Mr President’s assent, and we are confident of the benefits this will bring to businesses to drive exponential growth in the next few years,” she added.
The bill is seen in government and business circles as offering some landmark reforms, including the promotion of policies that will enhance the regulatory environment for growth of micro, small and medium enterprises (MSMEs), reduce entry barriers for smaller businesses, enhance transparency and shareholder engagement, align regulatory frameworks with international best practice for competitiveness, and increase the efficiency of the regulatory process in line with today’s realities.
Other benefits expected from the bill’s final passage are faster and cheaper registration of companies limited by guarantee, easier authentication of documents, prevention of asset shielding, and combating money laundering, terrorism financing or other illicit or criminal activities using companies as vehicles, among others.