WHAT’S NEW (AND JUICY) IN THE PROPOSED CAMA?
The proposed CAMA, as passed, has 860 sections and 16 schedules as opposed to the 613 sections and 15 schedules in the 1990 CAMA – a whooping 247 extra Sections! Not to talk of the in-between alterations and all. Yes, it’s that much. In this write up, we have attempted to do a side-by-side comparison of the 1990 CAMA and the proposed CAMA to bring out the salient differences between them.
1. E-registration
The Proposed CAMA has saddled Corporate Affairs Commission (hereinafter referred to as “The Commission”) with the duty of establishing and using any means of electronic communication to facilitate an automated reservation of names in terms of Part A, Part B and Part C of this Act; incorporation and registration under Part A, Part B and Part C of this Act; and filing of any information contemplated by this Act[1].
This, in no doubt, will largely ease the means of registering business in Nigeria as all the hassles related to the manual registration of Company can now be dispensed with.
Although the Commission has since adopted e-registration, there was no federal legislation to that effect. This anomaly has now been fixed by the proposed CAMA.
2. Pre-action Notice and Restriction on Levy of Execution
By section 17 of the proposed CAMA, no suit can now be commenced against the Commission before the expiration of a period of thirty days after a written notice of intention to commence the suit have been served upon the Commission by the intending plaintiff or his agent. The notice is to state the cause of action, particulars of the claim, name and place of abode of the intending plaintiff; and the relief(s) sought.
3. One-man Company
One of the major things that Nigerians will be grateful for in this proposed CAMA is that by virtue of Section 18 (2), one person may form and incorporate a private company by complying with the requirements of the proposed CAMA in respect of private companies.
4. Power of Minister to Prescribe Model Articles
Apart from the Articles of Association contained in the 1990 CAMA, Section 33 of the proposed CAMA has empowered the Minister to prescribe, by regulations, model articles of association for companies and different model articles may be prescribed for different descriptions of company. Section 34 applies to the default application of such model.
5. Object clause
Whereas Section 27(1)(c) of the 1990 CAMA requires a company to state its object(s), Section 35 of the proposed CAMA states that unless a company’s articles specifically restricts the objects of the company, its objects are unrestricted.
SOURCE: http://lawpavilion.com/blog/companies-and-allied-matters-act-2018-whats-new/
6. Minimum Issued Share Capital
Section 27 (2) (a) has upwardly reviewed the minimum issued share capital from N10,000.00 to N100,000.00 in the case of a private company and from N500,000 to N2,000,000.00, in the case of a public company[2].
7. Registration Documents
The scope of documents required for registration of a company has been expanded under the proposed CAMA. Now, among other things, Section 36 requires that if member’s liability is to be limited by share, the application for registration should contain Statement of Capital and Initial Shareholdings or statement of guarantee if member’s liability is to be limited by Guarantee. The content of these statements are contained in Sections 37 and 38 respectively.
8. Statement of Compliance
One other requirement of registration of Company in Nigeria is the submission of a statutory declaration of compliance (CAC7)
By virtue of Section 35 (3) of the 1990 CAMA “(3) A statutory declaration in the prescribed form by a legal practitioner that those requirements of this Act for the registration of a company have been complied with shall be produced to the Commission, and it may accept such a declaration as sufficient evidence of compliance.” By this provision, only a legal practitioner could fill the prescribed form CAC7.
In Section 40 of the proposed CAMA, ‘Statutory declaration in the prescribed form by a legal practitioner…’ has been tactically removed and substituted with “A statement of compliance…”. This has two meanings: firstly, that the document evidencing compliance no longer need to be by way of statutory declaration (the requirement of taking the CAC7 before a Commissioner of Oath to be notarized may now be dispensed with) as a simple ‘statement’ to that effect will suffice. Secondly, the strict condition that the declaration of compliance must be by a legal practitioner has been removed. This may mean that forthwith, any ‘qualified’ person can make the statement of compliance.
