Last week, the Senate of the Federal Republic of Nigeria passed the new Companies and Allied Matters Act (CAMA) bill into law after going through the third reading on the floor of the upper chamber of the national assembly. It is said to be one of the biggest business reform bills passed in Nigeria in over 28 years.
The benefits/direct effects of the bill on small businesses are highlighted below;
- It will make Nigeria’s business environment as competitive as its counterparts around the world.
- With CAMA, any individual can start and run a company totally resolving business registration bottlenecks. A lot of businesses have been forced into unnecessary partnerships because prior to the passage of this bill, to legally own a business in Nigeria, you needed to provide at least two or more people as co-owners of the business.
- It promotes the use of technology in the registration of businesses in a faster and more efficient way.
- CAMA removes all the unnecessary regulatory provisions for small companies such as the requirement for ‘annual general meetings’ and ‘company secretaries.’ This would make business ownership and registration less stressful, as the bill provides an environment for small business to start and grow.
- The bill creates the ‘LLP’ (Limited Liability Partnership) which is a new form of legal identity for businesses in Nigeria that is targeted at increasing foreign investments in the country.
- It reduces the minimum share capital for companies and start-up in Nigeria. Evidently, this will encourage more investments and create new jobs.
- It ensures that Nigerians can now register their businesses from anywhere in the country through the e-registration system that the senate’s amendment gives legal backing. With the bill, people can register their small businesses from the comfort of their homes without having to go through all the previous rigorous processes.
In summary, this new development is expected to impact on the growth of the economy through;
- Provision of more employment opportunities.
- Increased revenue for the government.
- Boost investors’ confidence in online business transactions.
- Improve the current position of the country on the ease of doing World Bank rankings.