The Companies Allied Matters (CAM) bill, on Tuesday passed the third reading at the House of Representatives in Abuja.
This is contained in a press statement issued from the office of Dr Jumoke Oduwole, Senior Special Assistant (SSA) to the President on Industry, Trade & Investment to the President in the Office of Vice President (OVP) and made available to The Renaissance on Tuesday in Lagos.
Economic analysts believe that the CAM, which was passed by the Senate in 2018, is the largest business reform bill to be passed in Nigeria in over 28 years.
It represents the reenactment of the existing Companies and Allied Matters Act, 1990 (CAMA).
According to the statement, 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 it’s standing in the 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 reenactment 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 this positive development, Oduwole who is the Secretary of the Presidential Enabling Business Environment Council (PEBEC), 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.”
Some other benefits of the landmark reform Bill include 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.
Further benefits 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.
By our Business Correspondent