- An Overview of the Business facilitation (Miscellaneous Provision) Bill 2022 vis a vis the Companies And Allied Matters Act 2020
(Changes and innovations)
The Business Facilitation Act was passed into law by President Muhamadu Buhari on February 15th, 2023 to facilitate the ease of doing business, transparency, and efficiency and to remove bureaucratic constrains to doing business in Nigeria. With the modifications and amendment of 21 business-related laws, it is the commitment of the government towards making Nigeria a progressively easier place to do business.
Of the 21 business-related laws that were amended, we shall be looking at some consequential amendments made to the Companies and Allied Matters ACT 2020.
Previously, Section 127 of the CAMA 2020 provides that a company having a share capital may in its general meeting and not otherwise increase its issued share capital by the allotment of new shares, a new subsection (1) is now been substituted which provides that a company having a share capital may increase its issued share capital by the allotment of new shares as it considers expedient in a general meeting or by a resolution of the board directors subject to the conditions that may be imposed in the Article or by the company in a general meeting.
Section 142 of the Act is amended in subsection (1) by inserting after letter “A” the word “private” which now provides that A private company shall not in any event issue shares unless they are offered in the first instance to all existing shareholders. Also substituting a new Subsection (2) paragraph (c) states that if the offer is not accepted within 21 days of the notice, the offer shall be deemed declined. Previously, the word reasonable time was used.
Section 149 subsection (1) of the Act previously provided that the powers of a company to allot shares is vested in the company, and in the case of a private company, the powers may be delegated to the directors ; however it has been amended by substituting a new subsection (1) which now says that the powers to allot the shares of a company are not exercised by the directors of a company, unless express authority to do so has been vested in the board of directors by the company in a general meeting or company’s articles.
Section 154 is also amended in subsection (1) by substituting for the words “one month’ with the expression “15days” which states that whenever a company limited by shares makes any allotment of its shares , the company shall within 15 days deliver to the commission for registration .
Section 171 is amended by inserting a new subsection (7) which provides that “certificate” i.e. a share certificate may be in physical or electronic form.
Section 207 subsection (4) substitutes a new subsection which provides that notwithstanding any provision in this bill or any law to the contrary and without prejudice to the provisions of section 204, the holder of a fixed charge shall have priority over other debts of the company including preferential debts .
Section 240 (2) of the act deletes the word private which now states that a company may hold its general meeting electronically provided that such meetings are conducted in accordance with the articles of the company; previously, only a private company can hold its general meeting electronically but with this consequential amendment any company may hold its general meeting electronically.
Also Section 248 is also amended by inserting the word “electronic voting” which means that electronic voting is now provided for in the new provisions of the Companies And Allied Matters Act. 2020.