Thread by @AyoBankole

BREAKING NEWS FOR SMEs & BUSINESS OWNERS GENERALLY: President Buhari has finally signed the amended Companies and Allied Matters Bill(CAMA 2020) into law. This is a brilliant one and a win for ease of doing business esp for incorporating more MSMEs into the formal space. Thread

This new law repeals & replaces the 30yr old Company and Allied Matters Act, 1990, which has become moribund & a clog in the wheel of progress for new businesses in this age. I’ll summarize the elements of the law below
1. E-registration: Companies can now register electronically

Anyone that’s tech savvy or has gone through the cumbersome CAC process will appreciate this. It’s a taboo that we couldnt do this in a tech world
2. Single Membership: minimum number of people that can set-up a private company has reduced to 1 from 2. This helps micro businesses

This aligns with global trends such as in Singapore, India & the UK. This also aligns with the realities of MSMEs who are owned by one person & restricted them from registering or forced them to use proxy cofounders/directors
3. Introduction of Limited Liability partnerships

4. Recognizes electronic signature - you don’t know how much this will change for many people
5. Need for Consent of the Attorney General for companies limited by Guarantee has been deleted
6. Empowers CAC to cancel name conflicts or fraud, rather than having to go to court

7. Common seal of companies is now optional
8. Simplification if reduction of share capital for private companies, without having to go to court. Private companies do not need complications like public entities
and it creates unnecessary rigidity

9. Statutory audit of accounts is now optional for Incorporated companies that are yet to commence operations or with turnover of less than N10m & balance sheet size of not more than N5m for a financial year. This exempts banks & insurance companies or as prescribed by CAC.

10. AGMs are now optional for companies with one shareholder
11. Electronic AGMs/Board meetings are now legally allowed to align with tech evolution
12. Companies can now buy back their own shares
There are others, but these are some of the provisions that directly affect MSMEs

As with many other things in Nigeria, I only hope that the implementation does not erase the gains that ought to be achieved with this law, especially where CAC has been empowered to make judgement calls on registration disputes. All in all. This is a good one. Kudos to the govt.