Companies and Allied Matters Act 2020: What You Need To Know
An important stride towards improving the ease of doing business in Nigeria was achieved on Friday, August 7, 2020 with the assent of President Muhammadu Buhari to the Companies and Allied Matters Bill, 2020 which was recently passed by the National Assembly. The Act repeals Companies and Allied Matters Act, Cap. C20 Laws of the Federation of Nigeria (LFN) 2004 and enacts the Companies and Allied Matters Act, 2020 (the Act) in its place.
The Act is the first significant amendment in Nigeria’s corporate law jurisprudence in 30 years. The Act is made of seven (7) Parts and 870 Sections. It introduces four (4) new Parts in addition to the three (3) Parts in Companies and Allied Matters Act Cap C.20 LFN 2004. These parts cover Limited Liability Partnership, Limited Partners, General (Administrative Proceedings Committee), and creates a new Part for Incorporation of Companies and Incidental matters.
In a nutshell, the revised Act seeks to make Nigeria’s business environment as attractive as its counterparts around the world. The introduction of Limited Liability Partnerships and Limited Partnership combines the flexibility and tax status of a partnership with the limited liability status of members of a Company. This implies that there are more options in setting up a business in Nigeria and sponsors have the option to enjoy the benefits of other business structures such as partnerships. In addition, businesses domiciled in States without a Limited Partnership Law like Lagos State may now set up limited liability partnerships and limited partnerships.
We have outlined important provisions of the Act which impact on the business landscape under the following heading: –
a.) Ease of Doing Business;
b.) Structure of Business Organisations;
c.) Company Management;
d.) Company Securities;
e.) Mergers & Acquisitions/ Insolvency Matters.
Kindly click here to view what you need to know about the Companies and Allied Matters Act 2020.
The provisions of the Act are considered as a major improvement in company regulation and practice as it will enhance productivity and promote ease of doing business in Nigeria. It is important that the draftsmen of the Act have introduced provisions embracing technological changes in the world of business. This reveals the goal to be more in tune with contemporary trends, enhance flexibility, and promote ease of doing business.