| S/N | Law Section | Summary | Narration |
|---|---|---|---|
| 1 | Section 27 | Replacement of authorized share capital with minimum share capital | The provisions of section 27 of the CAMA 2020 has replaced the mandatory requirement of authorized share capital under the CAMA 1990, with the requirement of minimum share capital for companies. |
| 2 | Section 330 | Exemption from mandatory agreement | exempt small companies from mandatory engagement of the service of a company secretary |
| 3 | Section 266(1) | Exemption from keeping minute books | By the provisions of section 266 (1) of the CAMA 2020, companies with a single shareholder are exempted from keeping minute books of meetings. |
| 4 | Section 421(1) | Exemption from compliance with the statutory time of filing annual returns | By the provisions of section 421 (1) of the CAMA 2020 , companies with single shareholder are exempted from compliance with the 42 days statutory period required for filing of annual returns after a company’s Annual General Meeting. |
| 5 | Section 323-329 | Restriction on the use of protected information of Directors | By the provisions of sections 323-329 of the CAMA 2020, information of Directors which relate to their residential address is now treated as protected information and this information does not cease to be protected even after the Director leaves office. Disclosure of this information may however be permitted by the consent of the Director, by court order, or by the Commission to communicate with the Director. |
| 6 | Section 271(1) | Exemption from the minimum requirement of two Directors | Formerly, under the CAMA 1990, all companies were mandatorily required to have at least two Directors and whenever the number of Directors falls below two, companies were required to appoint new Directors within one month. However, by the provision of section 271 (1) of the CAMA 2020, small companies are now exempted from the mandatory requirement of two Directors. This implies that small companies can now establish and carry on their business with the appointment of only one Director. |
| 7 | Section 394 | Qualification of a small company. | A company is small if it is a private company with a revenue of not more than N120,000,000 or such amount to be determined by the Commission; its net assets are not more than N60,000,000 or such amount to be determined by the Commission; none of its members is a foreigner, government, government corporation or representative of a government; all the directors hold at least 51% of its equity share capital by the provision of section 22 (1) and (3) of the CAMA 2020. A private company is also, one in which its Memorandum of Association states to be a private company and its members do not exceed 50 |
| 8 | Section 101 | Introduction of electronic signature | Under the second leg of the provision of section 101 of the CAMA 2020, documents requiring authentication by a company can be electronically signed by the designated/authorized officers of the company and the same will be accepted as satisfying the requirement for signing. This provision implies that documents need no longer be physically signed by authorized officers of a company but can be signed electronically from any part of the world by authorized officers who may not be physically present do so. |
| 9 | Section 240 | E-meetings for private companies | By the provisions of section 240, private companies do not need to hold their general meetings physically or in-person and at a specific location which must be in Nigeria. Small companies can now validly hold their meetings virtually from any part of the world and these meetings will be deemed as properly constituted. |
| 10 | Section 237(1) | Exemption from the mandatory annual general meeting of companies | Formerly, all companies were mandated by the CAMA 1990 to hold annual general meetings, however by the provisions of section 237 (1) of the 2020 Act, small companies and companies having a single shareholder are now exempted from holding the statutory annual general meetings. |
| 11 | Section 849 | The merger of not-for-profit associations or charities | By the provision of section 849 under Part F of the CAMA 2020 which deals with provisions relating to Incorporated Trustees, two or more associations with similar aims and objectives are now free to merge to achieve their combined aims and objectives. This will facilitate the emergence of bigger and stronger associations that can deliver on their combined objectives to achieve growth and maximize output, rather than having numerous smaller and weaker associations that struggle to meet their objectives. |
| 12 | Section 3 | Companies limited by guarantee | Non-profit organisations seeking to establish companies limited by guarantee will still need to obtain the consent of the Attorney General of the Federation prior to registration at the CAC. If, however, all requisite documents have been submitted but the Attorney General does not grant his consent or communicate his refusal within 30 days, the promoters may place an advertisement in 3 national newspapers inviting the general public to make any objections to the incorporation of the company which will be considered the CAC. If the CAC is satisfied that the memorandum and articles of association of the company are compliant with the CAMA 2020, the CAC will advertise the application in 3 national newspapers, inviting objections from the public to the proposed incorporation. If no objections are received from the public within 28 days (or the CAC receives, considers, but rejects such objections), the CAC can assent to the application and register the company without the consent of the Attorney General.27 To reflect current economic realities, the minimum amount to be contributed to the assets of the company by its members in the event that the company is wound up, has been increased from NGN10,000 to NGN100,000 |
| 13 | Section 288 | Removal of a Director is now a basis for disqualification | CAMA 2020 retains the procedure for removal of directors outlined under the Repealed CAMA. A key change, however, is that directors who are suspended or removed in a general meeting of the company in accordance with section 288 of CAMA 2020, will be disqualified from being directors of other companies |
| 14 | Section 119-120 | Persons with Significant Control | Provide that persons who hold significant control in any type of company are required to disclose particulars of such control to the relevant companies within seven days of acquiring such significant control. All affected companies must inform the Commission within one month of receipt of the information, disclose the information in their annual returns to the Commission and update their registers of members with the appropriate details. |
| 15 | Section 98 | Company Seal optional | It is no longer mandatory for a company to have a company seal and companies now have the sole discretion to choose whether or not to have one. |
| 16 | Section 98 | Share certificate | CAMA 2020 now provides that a share certificate may either be (a) issued under the company’s seal (where the company has a common seal or (b) signed as a deed by the company. |
| 17 | Section 402 | Exemption of companies that hasn’t carried out business since incorporation | Exempts small companies and companies that have not carried out business since incorporation (other than an insurance company or a bank or any other company as may be prescribed by the CAC) from the requirements of the law relating to the audit of accounts in respect of a financial year. |
| 18 | Section 240 (2) | General meetings for private companies | Private companies are now permitted to hold general meetings virtually. However, this amendment does not extend to public companies. Consequently, public companies are still required to hold general meetings, physically. |
| 19 | Section 839 (1), (5) and (7) | Power to remove or suspend Trustee of an Association | Though this power needs the blessing of the Minister of Trade |
| 19 | Section 405 | Corporate responsibility for financial reports | Certification of financial statements by CEO/CFO |
| 20 | Section 257 | Disclosure of remuneration of managers | The compensation of managers of a company shall be disclosed to members of the company at the annual general meeting |
| 21 | Section 119-120 | Disclosure of capacity by shareholder | Notification of person(s) with significant control and substantial shareholder |
| 22 | Section 320 | Register of Directors’ Residential Addresses | Every company is required to keep a register of director’s residential address |
| 23 | Section 772 & 807 | Filing of statement of accounts and solvency statement by a LLP & LP | A Limited Liability Partnership (LLP) or Limited Partnership (LP) is required to prepare a statement of account and solvency within 6 months from its financial year end. |
| 24 | Section 31,32 | Minimum share/authorized share captal of foreign company | CAMA does not exempt foreign companies from compliance with the minimum share capital/authorised share capital requirements mandated by some sectors prior to registration as well as the issuance of relevant operating permits/licenses. Consequently, there is a need for synergy and cooperation between the Act and other sectoral requirements. |
| 25 | Section 848 | Filing of annual returns for Incorporated Trustees | The financial year for Incorporated Trustees has been fixed at 1 January to 31 December. The Trustees are required to file a bi-annual return made up to a year to 30 June and 31 December each year, to be filed not later than 15 July and 15 January. In addition to the above, the Trustees are required to file an annual return (not earlier than 30 June or later than 31 December); the annual return must be accompanied by an audited statement of accounts. Since the financial year end is stipulated as 1 January -31 December, it appears that it is only the annual return for financial year 2020 that can be filed after June. For subsequent years, it would be impossible to file the annual return at any period before 31 December, as to do otherwise would mean that the return would not have considered a full financial year. |
| 26 | Section 882 | Filing of financial statements by a Business name | A business name must file its annual return alongside the financial statements not later tthan 30 June every year |
| 27 | Section 772(4),773 & 807 | LLP & LP to audit account | A limited liability partnership (LLP) or limited partnership (LP) is required to audit its accounts in accordance with rules prescribed by the Minister.The LLP/LPs must also file annual returns within 60 days after the financial year. |
| 28 | Section 22 | Right of first offer | Subject to the provisions of the articles of association of a Company, it is now prohibited for a member of a private Company to transfer shares in the said Company to a non-member, without first offering the said shares to existing members.Again, a Company cannot without the approval of all its shareholders, sell assets having a value of more than 50% of the total assets of the Company. Also, a shareholder or a group of shareholders, acting in concert, can not agree to sell more than 50% of the shares of the Company to a non-shareholder without such non-shareholder agreeing to buy the shares of the other existing shareholders on the same terms. |
| 29 | Section 427 | Restrictions on distributable profits | Restricts the profits of a Company available for payment of dividends only to the company’s accumulated realized profits (so far as not previously utilized by distribution or capitalisation) less the Company’s accumulated, realized losses (so far as not previously written off in a lawfully made reduction or reoganisation of capital |
| 30 | Section 394 | Requirements to be qualified as a small company | Turnover not more than N120million,Net assest of not more than N60million,No alien member,Directors hold 51% of the shares of the Company. |
| 31 | Section 731 (2) | Form of register. | Company records can be maintained in electronic form |
| 32 | Section 860(1)(2) | Electronic document | Certified true copies of electronically filed documents to be admissible in evidence as same will have equal validity as the original documents |
| 33 | Section 127 | Procedure for Increasing Share Capital | Pass a resolution approving the allotment of new shares to named persons, Notified CAC of the increase and allotment within 15 days of passing the resolution |
| 34 | Section 400 | Minister’s right to alter accounting requirements | The Act gives the Minister of Industry, Trade and Investments (in collaboration with the Financial Reporting Council of Nigeria) liberty to modify the requirements or add to the classes of documents to be included in a company’s financial statements. |
| 35 | Section 17 | Pre-action Notice and Restriction on Levy if execution | Provides that a legal action cannot be commenced against CAC until the expiration of 30 days after a written notice of intention to commence legal action is served on the Commission by the intending Plaintiff or his agent. |
| 36 | Section 824 | Classification of NGOs, Associations, and Foundations | A provision which empowers the CAC to determine the classification of Associations according to their aims and objectives |
| 37 | Section 831 | Related Associations | To unilaterally merge two or more associations together whether for having same trustees or similar aims and objectives. |
| 38 | Section 842 | Accounts of Dissolved Incorporated Trustees i.e. NGOs, Associations and Foundations | CAMA 2020 also gives CAC the power to deal with the bank accounts of NGOs, Associations and Foundations, where such account is dormant. Section 842 directs banks to notify the CAC of such dormant account irrespective of any duty of restriction on disclosure of information of the Bank. Furthermore, the Act provides that where the Commission receives a notice from the Bank, it may request the association to provide evidence of its activities and if the association fails to respond satisfactorily within 15 days, the Commission may dissolve the association and direct the bank to transfer the amount standing to the credit of the relevant association to such other association as may be specified by the Commission. For this purpose, an account is dormant if no transaction other than a transaction consisting of a payment into the account or a transaction initiated by the bank for a period of five years immediately preceding the date a report is made to CAC concerning the account. |
| 39 | Section 849 | Merger of NGOs, Associations, and Foundations | Provides that two or more associations with similar aims and objectives may merge under terms and conditions that may be prescribed by CAC. |
| 40 | Section 851 | Establishment of Administrative Proceedings Committee | Mandates CAC to establish an Administrative Proceedings Committee to be chaired by the Registrar General. The objectives of the Committee are to resolve disputes or grievances arising from the operation of the Act or its regulations, and to provide an opportunity of being heard for persons alleged to have contravened the provisions of the Act or its regulations and lastly to impose administrative penalties for contravention of the provisions of the Act or its regulations in the settlement of matters before it. Sanctions that may be imposed by the Administration Committee include penalties, suspension or revocation of registration, or recommendation for criminal prosecution. Furthermore, parties dissatisfied with the decisions of the Committee may appeal to the Federal High Court. |