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CAMA and matters arising

President Muhammadu Buhari recently appended his signature to the Companies and Allied Matters Bill, CAMA Act, a law, government believes will provide lots of business-friendly advantages for small businesses and start-ups when implemented.

 

 

 

 

 

The Presidency is confident that the amended CAMA 2020, will improve the ease of business registration, reduce compliance costs and regulatory hurdles for businesses in Nigeria and on the whole, enhance the ease of doing business in Nigeria.

For instance, the amended Act allows for a single member/shareholder companies. That is, a private company can be established with only one member or shareholder.

Also, small companies or companies with single shareholders are now exempted from the requirement to appoint Auditors, while the requirement for appointment of a company secretary is now optional for private companies.

Introduction of Limited Partnerships and Limited Liability Partnerships in Nigeria which provides the organizational flexibility and tax status of a partnership with the limited liability of members of a company for partnerships;

The new law which repeals the CAMA 1990 also places restriction on multiple directorship in public companies. The law prohibits a person from being a director in more than five public companies at the same time;

Despite some of its fine points, some individuals and groups have called for an annulment of the Act, citing some sections they believe are suppressive and out-rightly controlling.

Religious bodies and non-governmental organisations have frowned at the enormous powers reposed on the supervising minister through the Corporate Affairs Commission, CAC to control their affairs.

For one, Section 831[i][ii], empowers the CAC to treat unregistered associations as part of an already registered association. The commission also has the power to treat two or more associations as a single association if the associations have the same trustees.

Section 839[1] and [7] of the Act also allows the CAC to suspend and remove the trustees of any registered association, and to appoint an interim manager or managers to run the affairs of any such association, if the Commission reasonably believes that there is misconduct, mismanagement, and fraud in the association, or on the basis of undefined public interest.

Similarly, Sections 842, 843 and 844 gives the CAC powers and discretion to regulate the finances of any association, and to take control and take over bank accounts belonging to registered associations under Part F of the CAMA 2020.

Further, section 850[2][e] empowers the government to withdraw, cancel or revoke the certificate of registration of any registered association.

Bishop David Oyedepo, of the Living Faith Church Worldwide, had unequivocally condemned the Companies and Allied Matters Act 2020, saying it was against the work and progress of the church.

Similarly, the Christian Association of Nigeria, through its president, Rev. Samson Ayokunle, said that the Nigerian government had declared war on the church by trying to implement the new law.

CAN in a statement signed by the Special Assistant on Media and Communications to its President, Adebayo Oladeji, out rightly rejected the CAMA 2020, noting that the law is “unacceptable, ungodly, reprehensible and an ill-wind that blows no one any good.”

Similarly, the Socio-Economic Rights and Accountability Project, SERAP, in an open letter to President Muhammadu Buhari have asked him to rescind assent to CAMA 2020, and to send the legislation back to the National Assembly to address what it describes as fundamental flaws.

They ask for the cancelation of the “repressive provisions of the Act,” particularly sections 839, 842, 843, 844 and 850 contained in Part F of the Act, and any other similar provisions.

The group considers the CAMA 2020 the most repressive legislation in Nigeria’s history, citing the “unlawful and impermissible restrictions contained in Part F of the Act. Sections 831, 839, 842, 843, 844 and 850 of the Act are manifestly inconsistent with sections 36, 39 and 40 of the Constitution of Nigeria 1999.”

While the CAMA Act is a welcome development, government must be careful not to trample on citizens’ rights to association in the guise of regulation.

Registered associations are already being regulated under other existing laws, including anti-corruption and money laundering laws, the Criminal Code and Penal Code, any unwarranted control of their activities pass as oppression and an infringement on citizens’ rights to association.

The Nigerian government while enacting or amending laws must recognise that the rights to freedom of association, freedom of expression and peaceful assembly to advance beliefs and ideas are inseparable aspects of the “liberty” assured by due process of law.

The Human Rights Council has asked states to ensure that any regulations of associations ‘do not inhibit the independence and functional autonomy of associations. Government must therefore ensure that they create an enabling environment for associations to effectively carry out their legitimate activities.

In all, the enactment of CAMA 2020 is a welcome development for businesses in Nigeria, seeing that business practices and transactions have changed globally in tune with technological advancement. However, the implementation of the Act must be done in line with global best practices and respect for the rights of citizens.

 

 

 

 

 

 

 

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