THE  BILL  FOR  AMENDMENT  OF  THE  COMPANIES  AND 
 ALLIED MATTERS ACT 1990: A PANORAMIC VIEW OF THE 
 AMENDED PROVISIONS 
                CHIOMA OKONKWO  
                cokonkwo@aelex.com 
                Chioma 
                Corporate/Commercial Practice Group  
          INTRODUCTION 
          The  Companies  and  Allied  Matters  Act  Chapter  C20  Laws  of  the  Federation  of  Nigeria 
          2004  (CAMA)  was  enacted  in  1990.  Although  it  was  an  improvement  of  the  repealed 
          Companies Act 1968, it can be considered as being obsolete almost thirty years after it 
          came into force. There have been cries from many quarters for CAMA to be amended so 
          that investors and business owners can operate under favourable business conditions.  
          Consequently, on 22 January 2019, the House of Representatives of the Federal Republic of 
          Nigeria passed the Bill for an Act to Repeal the Companies and Allied Matters Act 1990 and 
          enact  the  Companies  and  Allied  Matters  Act  2018 
          Senate had previously passed the Bill in May 2018.  
          The Bill seeks to cure the existing shortcomings of the extant CAMA and bring it in line 
          with global best practices.  
          The major substantive amendments are highlighted below:  
                           CURRENT PROVISIONS                        AMENDMENT  
      Single Member        There  must  be  a  minimum  of  It is possible for a company to have 
      Companies            two members in a company at all  only one member. 
                                  1
                           times     
      Substitution of      Under  Section  99  of  CAMA,  The                requirement       for    minimum 
      Authorised           there is a requirement for every  authorised  share  capital  has  been 
      Share Capital        company  to  have  a  minimum  replaced  with  a  minimum  issued 
      with Issued          authorised      share    capital.    A    share capital. Once a company allots 
      Share Capital        company  cannot  issue  shares  shares  to  the  tune  of  the  minimum 
                           above  the  minimum  authorised  issued share capital, it has complied 
                           share  capital.  Stamp  duties  are       with  the  provisions  of  the  Bill.  
                           therefore, paid on the minimum  Stamp duties are only paid on shares 
                           authorised share capital whether  which have been issued. 
                           the  shares  are  finally  issued  or      
                           not. 
                                                                       
                           The  minimum  authorised  share  The  minimum  issued  share  capital 
                           capital for a private Company is  for  a  private  company  is  One 
                                                                     Hundred Thousand Naira while that 
                                                                           
                1 Section 18 CAMA 
                                                                 Ten  Thousand  Naira  while  that  of  a  public  company  is  Two  Million 
                                                                 of  a  public  company  is  Five  Naira.  
                                                                 Hundred Thousand Naira. 
              Paid-Up                                            CAMA  currently                                                does                  not              The                Bill               mandates                             twenty-five 
              Capital                                            provide  for  any  percentage  of  percent of the issued share capital of 
                                                                 the  share  capital  of  a  company                                                                   a company to be paid up at all times. 
                                                                 to be paid up. 
              Reduction in                                       A public or private company that  The Bill allows a private company to 
              Share Capital                                      wishes  to  reduce  its  share  reduce its share capital by passing a 
                                                                 capital  must  pass  a  special  special  resolution  to  that  effect 
                                                                 resolution for the reduction and  without                                                                                           the               added                    burden                       of 
                                                                 thereafter  apply  to  the  Federal                                                                   applying  to  court  for  confirmation. 
                                                                 High                  Court                    for             an             Order  However,  a  public  company  still 
                                                                 confirming the reduction2.                                                                            requires  a  court  order  to  reduce  its 
                                                                                                                                                                       share capital. 
              Submission of                                      Currently,  physical  copies  of  The  Bill  provides  for  electronic 
              Incorporation                                      incorporation  documents  must  submission/filing  of  incorporation 
              Documents                                          be  delivered  to  the  Corporate  and other documents. This gives full 
                                                                 Affairs                        Commission                                    (CAC)  effect                                      to             the               current                       online 
                                                                 before a company is registered3.                                                                      registration regime by the CAC. 
              Limited                                            There  is  no  provision  for  this                                                                   The  Bill  creates  new  forms  of  legal 
              Liability                                          under the current CAMA.                                                                               entities  known  as  limited  liability 
              Partnerships                                                                                                                                             partnerships                                (LLP)                   and                limited 
              and Limited                                                                                                                                              partnerships  (LP).  The  LP  and  LLP 
              Partnerships                                                                                                                                             must have a minimum number of two 
                                                                                                                                                                       partners.                            A               limited                         liability 
                                                                                                                                                                       partnership  must  have  at  least  two 
                                                                                                                                                                       designated                             partners                        who                would 
                                                                                                                                                                       oversee  the  day-to-day  activities  of 
                                                                                                                                                                       the  partnership.  In  the  case  of  a 
                                                                                                                                                                       limited partnership, there must be at 
                                                                                                
                                     2 Sections 106 and 107 of CAMA 
                                     3
                                          Section 35 CAMA 
                                                                                    least  one  limited  partner  and  one 
                                                                                    general  partner;  the  general  partner 
                                                                                    is     tasked       with       the     day-to-day 
                                                                                    management of the partnership. The 
                                                                                    maximum  number  of  persons  that 
                                                                                    can  join  a  limited  partnership  is 
                                                                                    twenty  while  that  of  a  limited 
                                                                                    liability partnership is unlimited. 
                                                                                     
                                                                                    The  Bill  also  provides  that  the 
                                                                                    provisions  of  the  Partnership  Act 
                                                                                    1890          shall         govern          limited 
                                                                                    partnerships; this is not applicable to 
                                                                                    limited        liability      partnerships          as 
                                                                                    detailed provisions for its operations 
                                                                                    are  specified  under  the  Bill.  In 
                                                                                    addition,           where           there         are 
                                                                                    inconsistencies               between             the 
                                                                                    provisions  of  the  Bill  and  the 
                                                                                    provisions of the Partnership Act, the 
                                                                                    provisions of the Bill will prevail.  
       Redefinition of           Under  Section  351  of  CAMA,  a  The  Bill  has  included  most  SMEs 
       Small                     small  company  is  a  private  under the small company category by 
       Companies                 company which:                                     increasing the turnover and net asset 
       and                       1.  Has  a  turnover  of  not  more                threshold for a small company.  
       Concessions                    than Two Million Naira.                        
                                 2.  Has  net  assets  of  not  more                Thus,  a  small  company  is  a  private 
                                      than One Million Naira.                       company with a turnover of not more 
                                 3.  None  of  its  members  is  an                 than  One  Hundred  and  Twenty 
                                      alien or government agency.                   Million  Naira  and  net  assets  of  not 
                                 4.  The          directors          between  more than Sixty-Five Million Naira.  
                                      themselves hold not less than   
                                      fifty-one percent of the share  The                     Bill     also      accords         certain 
                                      capital of the company.                       privileges         to      small        companies 
                                                                                    including: 
                                                                                     a.  Exemption from external audit if