The Companies and Allied Matters Act (CAMA) 2020 was passed by the National Assembly early in the year and signed into law by President Muhammadu Buhari on August 7, 2020 without the pomp and ceremony that often accompany such important legislations. It replaces the original CAMA (1990) which is now repealed to give way to a modernised, robust version of practically a Nigerian guide to organisational management. It seeks to answer questions on corporate governance, providing solutions to corporate problems, simplifying complex issues and, sometimes, complicating regular matters like religious worship, which seems to have brought down the roof on the heads of its authors, the government, which must claim ownership of this valuable but troublesome legislation.
The uproar that has surrounded this law is an indication of how influential the legislation is in the lives of Nigerians. The CAMA 2020 is a complex piece of legislation and its authors probably did not anticipate the mixed reactions it has generated. And the reactions range from those who think some of its provisions are positively revolutionary, to those who are so sure they are a declaration of war on Christianity and an agenda to destroy the church. The riddle is how was it possible to go through the laborious process of legislation in the National Assembly without exposing all those explosive provisions of the Act. Thus, the Act practically caught the Christian lobby by surprise and before they knew it, the president had added his assent. Pessimists contend that the drafters lifted from previously rejected “obnoxious” bills and simply copied and pasted those objectionable and authoritarian sections into the Act. The pressure all round is to do something about the Act and the most reasonable suggestion is get the church and the civil society organisations assemble their lawyers, conduct a comprehensive review of the Act and draft an acceptable amendment, and get the amendments through the National Assembly as quickly as possible.
The beauty of the Act is mostly in its new provisions which contain the “ease of doing business” provisions which most business men had dreamt about for years. They include the simplification of ownership structures, share capital, share transfers, statement of compliance, the exemption of small firms from the onerous paperwork and the tedium of hosting annual general meetings which can now be held electronically and virtually.
Small firms are now exempt from appointing auditors and company secretary, as this is now optional. The filing fees and registration charges are also now reduced. The restriction of the number of public companies on which a person can serve as director to a maximum of five received a lot of commendation. It also created limited liability partnerships thereby introducing flexibility and consideration on the tax status of partnerships, enhancement of minority shareholders protection and engagement. The Act also restricts private companies from appointing the same individual to hold the office of the chairman and the chief executive officer at the same time.
CAMA also delved into the reformation of corporate governance and several other changes including the promise of first offer of share transfers to existing shareholders. A member of a company is therefore prohibited to transfer shares in a company without first offering the said shares to existing members, nor would a company sell 50 per cent of its shares to a non-shareholder without first offering same to existing members. Other changes include the definition of five per cent as significant shareholding in a company; the common seal which used to be a required stationery for companies is no more mandatory; electronic signatures are now deemed to satisfy the need for signing of documents, and small companies can now have a single director. CAMA is such a voluminous law it contains more than 613 headings and runs across more than 700 pages.
The ire of the church and the civil society is directed mostly at Section 839 which deals with the corporate governance of non-governmental organisations, and charities, including religious organisations. The sore point is the section that empowers the Corporate Affairs Commission to suspend trustees of a non-profit organisation (which includes the church) and appoint interim managers to handle the affairs of the association for reasons of mismanagement. The resentment against this part of the law has been visceral and unrelenting.
We have no doubt that it could not have been the intention of the government to make a law that would rile so many members of the society. Legislations such as the CAMA are designed to unite rather than divide the people. The government should move quickly to amend the offending sections of the law without abandoning the principles behind it. We must continue to uphold the nation’s constitutional position that Nigeria is and should remain a secular state.