*We Should Laud Passage Of CAMA & Those Behind It—Seni Adio, SAN
*CAMA WIll Foster Cost Reduction & Greater Transparency On Business Climate— Dr. Jumoke Oduwole
*According To Impact Assessment & Economic Indices, 2.9M Jobs To Be Created —Nnanna Ude
*Inclusion Of BRIPAN In CAMA, Not To Take Advantage Of Other Professional Bodies—Toyin Bashir
*Reduction In Cost Of Securities Registration, Capable Of Unlocking Values—Ozofu Ogiemudia
The NBA-SBL Webinar On Companies & Allied Matters Act, 2020 which TheNigerialawyer(TNL) monitored was held on 20th day of August, 2020, and moderated by the Vice-Chairman NBA-SBL & Lead Partner Detail Commercial Solicitors, Ayuli Jemide.
The speakers who spoke at the webinar were: Seni Adio, SAN, Chairman, NBA-SBL & Managing Partner, Copley Partners; Dr. Jumoke Oduwole, Senior Special Adviser to the President on Ease of Doing Business & Secretary, Presidential Enabling Business Environment Council(PEBEC); Alhaji Garba Abubakar, Registrar General, Corporate Affairs Commission (CAC); Ozofu Ogiemudia, Udo Udoma & Belo-Osagie ; Nnanna Ude, Senior Fellow(Legislative Reform Strategy & Programme Management) NESG & CEO, Agon Continental Ltd; Toyin Bashir, Partner Banwo & Ighodalo.
The CAC Registrar, A.G Abubakar stated, “Everything about the Law, the issue of a statutory declaration; at least owners of these companies can now have the option to do statement of compliance, so lawyers can be engaged by those who can afford to do so but for those who cannot afford, it means they can register on their own directly”.
Dr. Jumoke Oduwole stated that the CAMA 2020 is tricky, but she’ll “go for the options that provide for electronic meetings, electronic transfer of shares, virtual AGMs” amongst others.
Nnanna Ude also agreed with the moderator on single shareholders limited liability companies etc. He also said it will unlock the power of innovation and enterprise from a number of young people.
Toyin Bashir, however, has two points in which she explained firstly how glad she is on the” Exemption and definition; redefinition of small companies to allow quiet a number of businesses to qualify as being a small company that take credit and not having to deploy that portion of that credit on regulatory costs.” Secondly, on “company rescue & how it is going to open up field of practice and creates a floor for lawyers who think the CAC has taken from them in terms of filing and can choose to make their area of specialist out of it.”
Ozofu Ogiemudia stated that for her, the reduction in the cost of registering securities is going to have such an impact in unlocking values to company that takes credit and not having to deploy a significant portion on regulatory cost. Also, she said company rescue.
However, it was further explained that it now cost less to borrow money, cause when the filings are done at CAC, eventually it’s the customer that pays, so, it’s expected to see more people going to the bank to borrow money at least costs.
While reacting to concerns that people are not sure about the effectiveness of the CAMA 2020, the transition provisions amongst others, the Registrar General explained that “by provision of the authentication Act, the National Assembly has to gazette it and that process is ongoing” therefore, “the Act is to come into effect immediately because there is actually no transition in the new provision “.
“The only transition may relate to issue of share capital, issued and authorized but other provisions are supposed to come into effect immediately.” He added.
Meanwhile, he further stated that “for the new legal entities like LLP and LP might not be immediate because you need an end to end electronic solution to do that but that of one-man company, issues of statement of compliance and other matters relating to new registration can happen as soon as the Law is gazetted.”
Furthermore, responding to when the Law is expected to be gazetted, he said “hopefully by the beginning of October. “We want to see if we can get this accomplished by the end of September, so that latest by 1st October, this Law should be in place. The implementation can start”
In addition, Dr.Oduwole said “it’s rightly conservative. Of course we are going to push for more quicker”.
Meanwhile, reacting to growing concerns of some NGOs that Sections 1 and 839(1) which appear to have given CAC wide powers to remove trustees and capable of being used capriciously, the RG said:
“The controversy is actually unnecessary because these provisions are consistent with best practice. Is not peculiar to Nigeria, we have similar provisions under the Charities Act of UK . In fact, our own provision is no where close to that under the Charities Act. The Charities Act provisions are more stringent.
“Section 839 has two legs to it. The first part deals with the powers of the commission to suspend trustees and the grounds upon which that suspension can be made are clearly stated.”
“CAC may suspend a trustee where there is a misconduct or mismanagement in the administration of the Association or where it is necessary or desirable to do so for the purpose of protecting the property of the Association” amongst others.
He further stated that the power is not absolute because an inquiry has to be made before such is exercised.
In addition, he said that “fundamentally, we need to understand the fact that unlike companies where the Law says if you’re carrying out your business under any name other than your full name or surname, you must register. For associations, you don’t have to register with CAC. You can run your association without registration. The language of the Law is “may” but if you agree to register and you submit yourself to regulatory oversight, then you must behave in accordance with the Law. Your action must be consistent with the Law and your Constitution.”
Furthermore, it was noted that the CAC is involving relevant stakeholders with a view to setting up a committee to look into the regulations and guidelines, “so that we come out with standard guidelines and stakeholders buying. CAC will not do it alone.”
In addition, Dr. Oduwole while sharing her thoughts from the ease of doing business perspectives, she said:
“So first of all, the objective is to reduce cost, and to make it quicker to do business and then, to lear greater transparency on our business climate.”
Therefore, she stated that the laudable provisions on virtual meetings amongst others are certainly ways of reducing costs. Also, “legal community, don’t get upset because we’re expanding the pile. We have a lot more registrations that we’re expecting. The legal work will become more sophisticated, which means more fees. So, let’s not even be upset at all about things like decoration of compliance which are really at the bottom of food chain. There is a lot more to look forward to.”
On cost reduction, “the reduction in the charges to 0.35% and also we expect that about 65% reduction in the entire regime of charges.”
Furthermore, she stated that the CAMA 2020 has laudable innovations and “I am glad to see that the whole community is responding very well to these ease of doing business provisions”, she said.
In addition, while reacting to whether there are things being put in place to fast track the implementation of the objectives of the new Act, she noted that the ease of doing business is a national project and that there is a collaboration with the States Government, National Assembly, Judiciary and several MDAs at the federal level, thus, “its a very collaborative intervention, very close partnership with organized private sector. What this means is that feedback and verification. If we don’t get validation for the project that we set in place and for the reforms that we announced, then we know we are not there.”
“The SBL and PEBEC have been working closely with NESG, with players in the FG MDAs anchored by Ministry of Justice to draft an omnibus bill, we’ve been doing it quietly for about two years now”, she said.
Similarly, she commended the 8th & 9th National Assembly for demonstrating continuity in government. Thus, she said the both have worked as a government in continuum which made the CAMA 2020 to see the light of the day.
Meanwhile, Mr. Nnanna while responding to questions about the impact of the Act on SMEs, he noted that the NESG did an economic impact assessment and it would be discovered that there is global research which suggests that when a country moves from the last quarter of doing business ranking to the first quarter, it produces a 2.3% increase in a GPD.
Therefore, it was noted that in the assessment that was done, a projection was made that in the first year, that by migrating the enterprises into the formal economy, they project “creation of about 2.3 million new jobs in the first year, additional 2.4 in the second year, another 2.9 in the third year and so these are critical economic indices that will be transformed directly simply because we have a new legislation like this.”
“Formalizing the informal economy is critical to GPD growth”, he said.
In another development, Toyin Bashir while reacting to some of the criticisms levied against Section 705(1) of CAMA 2020 which recognizes a kind of licensing regime for parts of insolvency in Nigeria.
Reacting to the controversial recognition of Business Rescue & Insolvency Practitioners Association of Nigeria (BRIPAN) by the Act. She stated that when changes are made in legislations, the first thing is to ascertain the intention of the Lawmakers and whether the practice is usual, in line with global best practices.
She noted that in her view, the object was not to take advantage of other professional associations, she said she “struggles to find fault in such inclusion”. Also, she noted that the other relevant subsections do not only list BRIPAN as the only professional body CAC would consider. She also noted that it would be more “productive to look into the other professional associations CAC should consider and start making a case for it. “
Furthermore, the CAC RG contributed by stating that one does not have to be a member of BRIPAN, therefore, other professionals may be accredited in that line. Thus, he said “the argument does not hold water, there is no basis for that argument at all.”
In addition, Mr. Seni Adio further contributed by saying provisions such as that ought to be commended, “people should be lauding the statute and those behind the statute because what we’ve gotten through the business rescue provision.”
“A lot of these issues in terms of who is eligible, who is qualified can be done through implementing regulations by the CAC. A lot of people try to be mischievous when some of these issues are not considered from a very wholesome perspective.”
In another development, while raising the issue of independent directors under the new Act, Toyin Bashir noted that “the whole rationale for introducing independent directors was essentially to improve decision making at the board to make it more balanced.”
Speaking on Annual General Meetings and whether the new Act mandates small companies to hold same, the CAC RG said:
“I think there is a drafting error, the intention actually is those small companies are actually exempted from holding annual general meetings at all. So, small companies are actually exempted from that provision at all. It’s only private companies other than small companies that are required to hold annual general meetings. A small company does not have to hold meetings. They are exempted from audit, exempted to file financial statements with the CAC but other private companies, there may be big companies that are private like Ecobank and others. Those big private companies have to hold their meetings. What the Law is saying is can they hold it in Nigeria or outside Nigeria.”
Furthermore, speaking on the statutory declaration of Legal Practitioners in the incorporation process under the Act, he noted as follows:
“The issue of statutory declaration by Legal Practitioners is still an option. The promoters have the option to do a statement of compliance or where a Lawyer is involved in the incorporation process, he can submit a statutory declaration.”
“The accreditation remains but it will be renewable annually for a fee.” He added.
“We have so many people on the accreditation list. Some have been barred from practice, some have left the shores of Nigeria and you have other people using their own numbers to make submissions, to submit applications. Through a renewal process, it may not be one year, it maybe five years, at least you will be able to sanitize the list of accredited agents.” He further added.
