COMPANIES AND ALLIED MATTERS ACT 2020

The Companies and Allied Matters Act (CAMA) 2020 is a landmark piece of Nigerian federal legislation that governs the formation and management of business organizations in the country. It was signed into law on August 7, 2020, and repealed the previous CAMA of 1990, introducing significant reforms aimed at simplifying business registration and enhancing the ease of doing business in Nigeria (Olawuyi, 2020). The act covers various forms of business organizations, including companies (private and public), limited liability partnerships, business names, and incorporated trustees. Key Provisions and Reforms CAMA 2020 introduced several key reforms that have modernized Nigeria's corporate legal framework: • Single-Member Companies: A private company can now be formed with just one shareholder and one director. This provision significantly reduces the regulatory burden and initial cost for solo entrepreneurs, a change that aligns Nigeria's corporate law with that of many other jurisdictions (Akinyemi, 2021). • Minimum Share Capital: The act replaced the concept of "authorized share capital" with "minimum issued share capital." This reform means that a company is only required to issue a minimum amount of shares at the time of incorporation, rather than having a large authorized pool. The minimum for a private company is now ₦100,000, while for a public company it is ₦2,000,000, which has been hailed as a positive step for small businesses (Banwo & Iheme, 2020). • Electronic Filing and Virtual Meetings: In line with modern practices, the act permits the electronic filing of documents with the Corporate Affairs Commission (CAC). It also allows private companies to hold virtual general meetings, provided their articles of association permit it. This provision has enhanced business continuity and reduced the operational costs of physical meetings. • New Business Structures: CAMA 2020 introduced two new business structures: Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs). These structures provide a flexible and legally recognized option for professionals and businesses that combines the features of a partnership with the limited liability of a company. • Exemptions for Small Companies: The act provides several exemptions for small companies, including not being required to appoint a company secretary or a statutory auditor. They are also not required to hold an Annual General Meeting. This reform aims to reduce the compliance costs for small and medium-sized enterprises (SMEs) to foster growth. • Disclosure of Beneficial Ownership: The act now mandates companies to disclose the details of individuals with significant control (beneficial owners) to the CAC. This provision aims to promote greater corporate transparency and combat financial crimes like money laundering.