The new company law in Nigeria has ushered in some changes, designed to improve the ease of doing business in Nigeria. The President of Nigeria signed into law, a new federal legislation on companies and related matters. The new law has repealed and put to rest the earlier Companies and Allied Matters Act made since January 2, 1990. Among the changes brought by the new law is the place of company secretaries in small companies.
With the new Act that was signed on 7 August 2020, small companies no longer need company secretaries. Before now, at incorporation (registration), a small company was required to appoint a company secretary. This caused hardship, especially to small scale businesses. Now a small company can be registered in Nigeria without a company secretary. Also, the new federal law allows a single person to register, operate and own a small company in Nigeria, contrary to the previous practise, where a company must have at least two (2) persons as directors and shareholders.
A small company in any given financial year is a private company without a turnover of more than N120 Million Naira/an amount to be determined by CAC, without net assets value of not more than N60 Million Naira/an amount to be determined by CAC, without a member that is a foreigner/government/representative of government as a shareholder and if a company with shares, its directors hold not less than 51% of the equity share capital. And, a private company is a company that its memorandum of association states that it is a private company and does not have more than 50 members, excluding employees.
My authorities are:
- Sections 22(1), 22(3), 330(1), 394, 868 and 870 of the Companies and Allied Matters Act 2020.
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