THE EFFECT OF THE NEW CAMA 2020 ON NON-PROFITS IN NIGERIA
The Companies and Allied Matters (Amendment) Bill was signed into law by the President of Nigeria, Muhammadu Buhari on the 8th of August 2020. The bill, now referred to as the Companies and Allied Matters Act, 2020 (the Act) repealed the Companies and Allied Matters Act 1990 (which had been in operation for 30 years).
According to a report by Deloitte.com, The Act changes Nigeria’s corporate landscape by facilitating the ease of doing business, reducing regulatory hurdles and aligning corporate operations in Nigeria with global practices and procedures.
In a comparative analysis of the innovations of the 2020 CAMA, DNL Legal stated that the changes begin with the arrangement of sections, CAMA 2020 has expanded the scope of the old Act by introducing additional sections which is broken down into Part A to G with a total of 870 sections.
The innovations of the CAMA can be listed as: Single Shareholder/ Single Director Companies, Small companies redefined, with additional benefits, Electronic innovations, Changes to Share Capital, New corporate structures, Reduced costs for registering security, Framework for implementing mergers. This is to mention but a few. However, as is the sole concern of this article, particular attention would be paid to how this new Act affects non-profits.
The New CAMA has affected the welfare of nonprofits in many ways but significant of which is the controversial 839(1)(a)(b)(c)(2)(3) of CAMA 2020, which empowers the Corporate Affairs Commission (CAC) to suspend the trustees of an association and appoint interim managers to manage the affairs of the association. Some analysts have perceived this to be a gross violation of their fundamental rights to fair hearing, freedom of thought, conscience and religion and their right to peaceful Assembly and Association as enshrined and guaranteed by the 1999 Constitution of Nigeria as amended.
For nonprofits registered as companies limited by guarantee, all the innovations earlier stated apply. There are the:
- E-reservation of business names
- No need for company seal anymore
- Adjusted framework for implementing mergers which is also affected greatly by the Federal Competition and Consumer Protection Act 2018 (FCCPA’19)
- Permission to hold e-meetings for small companies
- Single member company
- Statement of Compliance: Section 40(1) replaces the previous requirement for a Declaration of Compliance attested to by a Lawyer or witnessed to before a Notary Public with a Statement of Compliance signed by an Applicant (or agent), without the need for a Lawyer or Notary Public.
- Provision for electronic signature: a document or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorized officer of the company, and need not be signed as a deed unless otherwise so required. It also states that an electronic signature is deemed to satisfy the requirement for signing. This is innovative and that eases company operations in Nigeria.
…To mention but a few, especially based on relevance. In the light of the above, it can be gleaned that the CAMA 2020 improved the status of non profit organisations in Nigeria. The controversial issue of government control of incorporated trustees still remains a controversial subject.