The House of Representatives, on Thursday, passed through third reading, the bill on Companies Limited Liability Partnerships, Limited Partnerships, Registration of Business Names together with Incorporations of Trustees of certain Communities, Bodies, Associations; and for related matters.
The lawmakers had during the Committee of Supply, held on Wednesday, adopted the 870 clauses of the proposed bill, which also seeks to repeal the current Companies and Allied Matters Act, Cap. C 20 Laws of the Federation of Nigeria, 2014.
The new CAMA bill which seeks to provide for the incorporation of companies, Limited Liability partnerships, limited partnerships, registration of business names together with the incorporation of Trustees of certain communities, bodies and associations, by replacing the 30-year-old Act promulgated in 1990.
Clause 18 of the bill makes it possible for a single person to form a private company for the first time in Nigeria, as obtained in developed economies such as the United Kingdom, India and Singapore.
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Clause 184 of the bill also provided that ‘a limited liability company may purchase its own shares including redeemable shares provided that – a company may only purchase its own shares if so permitted by its articles.
Clause 185 also provides that: “where a company buys back its shares, payment for the share buyback shall be made from the distributable profits of the company.”
Clause 316 also provides that: “Where a company receives money by way of loan for specific purpose or receives money or other property by way of advance payment for the execution of a contract or project; or with intent to defraud, fails to apply the money or other property for the purpose for which it was received; every Director or other officers of the company who is in default is personally liable to the party from whom the money or property was received for a refund of the money or property so received and not applied for the purpose for which it was received and nothing in this section affects the liability of the company itself.”
In the same vein, the bill provides for exemption of small companies from appointing auditors if it has not carried on business since its incorporation, or in particular financial year and where the company’s turnover is not more than N10 million and its balance sheet total is not more than N5 million.
The new bill also removed the bureaucratic bottlenecks in obtaining the Attorney General’s consent in registering Companies limited by guarantee, as well as enhance minority shareholder rights; regulate related party transactions and shareholders access to judicial redress, among others.
While speaking on the synopsis of the report on Wednesday, Majority Leader, Hon. Alhassan Ado-Doguwa, stated that the bill was passed in the previous Assembly but was not assented to by the President due to major issues.
According to Hon. Doguwa, the critical concerns raised by the President which led to his decision to withhold assent in the 8th Assembly, was its contradiction to the functions of the Attorney General’s office.
Hon. Doguwa stated that the Bill is an important tool, that will aid the ease and efficiency of doing business and for the good of the business environment.
The Deputy Speaker, Hon. Ahmed Idris Wase, who presided on the Committee of Supply, assured that the flaws of the first bill had been taken care of.
He further observed that the Executive Arm of government is keenly interested in its passage as it will ease the modalities in the business sector and for the good of Nigerian entrepreneurs.
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