Prior to 2005, incorporating a company required strict adherence to the provisions of section 35 Companies and Allied Matters Act (CAMA)1990, the provision mandated physical visitation to the Corporate Affairs Commission for filling incorporation documents. This caused avoidable hardships and discouraged people who had the intention to register and incorporate a company which was not good for the business climate in Nigeria so much so it affected Nigeria’s ranking in the ease of doing business of the World Bank.
COMPANY REGISTRATION IN THE REPEALED CAMA, 1990
The adversity of company registrations in Nigeria continued until the introduction of the online registration system aimed at achieving transactional efficiency, registration, and incorporation of a company by both lawyers and non-lawyers and reduction of the need to physically visit CAC office for corporate transactions, thereby enabling the registration of a company from the comfort of one’s home; The novel introduction eased the former hectic process of company registration. The online system was designed in such a way that the manual-based registration process was replaced with an online interactive forum. The business structures offered by the Companies and Allied matters include Sole Proprietorship, Incorporated Trustee, Partnership and A Company. A Company is either private or public limited by shares, guarantee or an unlimited company. A company limited by guarantee is the only company without share capital although just like other companies it is allowed to carry on business. Incorporated trustee and a Company limited by guarantee are incorporated for charitable causes.
COMPANY REGISTRATION IN THE NEW CAMA, 2020
The Companies and allied matters Act (CAMA), 1990 was repealed and re-enacted by the National House of Assembly with CAMA 2018 after 30 years of application, the new CAMA, was signed and assented into law by President Muhammadu Buhari on the 7th of August 2020, which is the day it was considered to have come into force in Nigeria. The new CAMA integrated provisions for ease of doing business in Nigeria. Some of the benefit of the new CAMA as showed by the Nigerian Senate includes:
- Making Nigeria’s business environment as competitive as other countries around the world.
- Empowering a one-person ability to open and run a company.
- Promoting the use of technology in the registration of businesses so that Companies can be registered in Nigeria from anywhere in the world using the e-registration system.
- Ending all pointless regulatory provisions for small companies
- Creating a new category of legal identity for Nigerian businesses.
EASE OF DOING BUSINESS IN THE NEW CAMA, 2020
With the new CAMA, the Corporate Affairs Commission (CAC) upgraded its website (online registration portal) to include automated new pre company incorporations features and post company incorporation features. The novel introductions are in line with the Federal Government’s mandate of improving the ease of doing business in Nigeria. The automated features include:
- E-search of Company Records: This enables individuals or businesses to visit the CAC portal https://search.cac.gov.ng/home to find out the position of a registered business. All that is needed is the name of the Company.
- Automation of Pre and Post Company Incorporation Fillings:
- Pre-incorporation filing: This enables all applications for company incorporations to be made by individuals or professionals via https://pre.cac.gov.ng/home Upon approval by the CAC electronic certificate of incorporation (E-Certificate) are issued and downloaded via the portal.
- Post incorporation filing: All post company incorporations for changes to registered business can be made via https://post.cac.gov.ng/login including change of name, addition or reduction or change of shareholders or directors, change of business address, change of business structure, filing of annual returns etc.
These novel features are excellent and support swift applications to the CAC. However, the online portal faces technical challenges that occasion delays. There is therefore the need for the CAC to properly support the Portal.
The novel provisions and sections of the New CAMA aim to have an excellent business environment for businesses thrive without hindrances. In 2020, Nigeria ranked 131 on the World Bank’s Doing Business 2020 Index. According to the Index, showing Nigeria moved up 15 places from its 2019 position. Based on the ranking, the World Bank ease of doing business concluded that the country is one of the most improved economies in the world for running a business. The improvement, according to the agency, happened because of reforms carried out by the Federal Government. The new Companies and Allied Matters Act is an improvement of the repealed CAMA, 1990. The Act promises to meet up with the current realities of doing business in the 21st century. However, there is need for the CAC to properly maintain and manage the online portal for avoidance delay in filings occasioned by technical and of course the Act it is not without need for more review and reforms.