The Companies and Allied Matters Act 2020 ("CAMA 2020", "the New CAMA", or "the Act") was assented to by President Muhammadu Buhari on 7 August 2020. In effect, the new CAMA repealed and replaced the CAMA of 1990. The new CAMA offers a number of legal innovations engendering the ease of doing business in Nigeria.
At Greystone Solicitors, our lawyers are accredited to undertake all forms of company registrations with the Corporate Affairs Commission
First we determine the nature of the company to set up. Is it going to be a private company limited by shares, private company limited by guarantee, a public company, or an incorporated trustee?
The next practical step is we conduct a search with the Corporate Affairs Commission (CAC), the statutory body responsible for the administration and enforcement of the CAMA in Nigeria. This search is called 'name availability search' and the process typically takes less than 24 hours. If the name is available, the CAC will issue an approval note. If the name applied for is disapproved, a disapproval note would be issued by the CAC.
Our lawyers next objective is to understand the nature of the business of the company for the preparation of the Memorandum of Association (MoA), the document that contains the fundamental conditions upon which the company is formed and allowed to operate in a given jurisdiction.
Section 36 of the Companies & Allied Matters Act 2020 provides that the MoA shall be delivered to the Commission together with an application for registration of a company, documents required by the Act and a statement of compliance. The application must state the;
(a) The company's proposed name;
(b) The registered office address and head office address if different from the registered office address;
(c) Whether the liability of the members of the company is to be limited and if so, whether it is to be limited by shares or by guarantee; and
(d) Whether the company is to be a private or a public company.
Documents required by the Act for incorporation include;
A. Form CAC 1.1-Application for Registration of Company
In this Form, the applicant is required to complete it with the following information among others:
II. Statement of Capital & Initial Shareholdings
For private companies limited by shares, section 37 of the CAMA 2020 requires that the statement of capital and initial shareholdings must be stated as well as the total shares taken by the subscribers on formation of the company. It must also state the number, class, and the aggregate nominal value of the shares as well as the aggregate amount (if any) to be left unpaid on the subscribers' shares.
II. Statement of Proposed Directors
Section 39 of the CAMA 2020 provides that the statement of the company's proposed directors shall contain the particulars of the proposed director(s) and secretary or joint secretaries of the company. The statement shall also contain consent by each of the persons named as a director, as secretary or joint secretaries, to act in the relevant capacity.
III. Statement of Compliance
Section 40 of the Act requires that a Statement of Compliance be delivered to the CAC. A Statement of Compliance is a statement of an applicant or an agent that the requirements of the Act have been complied with. The CAC may accept the compliance as sufficient evidence of compliance. This is a new development under CAMA 2020.
After completion, CAC Form 1.1, shall be submitted to the CAC with the Memorandum of Association & Articles of Association of the Company.
B. Memorandum of Association & Articles of Association of the Company (together, the 'MemArt')
The Memorandum of Association and Articles of Association (MemArt) are legal documents that form the constitution of the company. They both regulate the external and internal affairs of the company respectively. The Articles of Association, on the other hand, regulates the company's internal workings, powers and rights, duties and management, etc.
By a combined reading of sections 20(2) and 41(1) of the CAMA 2020, the MemArt must be subscribed to by at least two (2) persons and who may not necessarily be Nigerians
Section 27(2) of the Act places a minimum issued share capital of not less than N100 thousand for private companies and N2 million in the case of a public company.
Our attorneys assist with the filing of Annual Returns (AR) which are statutory done to the Corporate Affairs Commission. Annual Returns are prescribed under Part XII clause 370-378 in the Company and Allied Matters Act CAMA. They include Audited accounts signed and approved by the shareholders and board of directors of a company, details of shareholdings for the year, debentures or loans.