In a developing nation like Nigeria, one of the greatest tests to a legal system is its ability to respond to changes in a timely manner.
The CAM Bill is a direct response to critical bottlenecks in doing business and a step in the right direction towards a pro-business and investor-friendly environment.
With about 90% of Nigerian business being micro, small and medium scale enterprises (MSMEs), the Bill offers a tangible framework for economic growth.
In May 2018, the CAM Bill was passed by the Senate (upper legislature) and in January 2019, it received a concurrence in the House of Representatives (lower legislature).
The final stage in the legislative process requires the President’s assent to the Bill and stakeholders are confident that there will be no delays.
Ozofu Ogiemudia, a corporate partner in the private equity, corporate advisory and mergers and acquisitions divisions in Udo Udoma and Belo-Osagie, chaired the technical advisory committee that prepared the CAM Bill.
She believes it redefines the way Nigerian businesses will operate in the 21st Century.
For example, on private equity transactions, the CAM Bill provides for the registration of limited partnerships and limited liability partnerships, when previously they were previously only registrable in Lagos State.
The introduction of such partnerships will resolve concerns that private equity funds and other investment funds, seeking to establish a presence in Nigeria, had with respect to the recognition of the limited liability status of partnerships registered in Lagos State.
Also, the introduction of single-member and single-director companies, and the new parameters for determining what constitutes a “small company”, are welcome developments for MSMEs.
Social enterprises and non-profits are not left out. They will benefit from the simplified process for registering a company limited by guarantee.
Company voluntary arrangements and administration provisions have also been introduced to promote business rescue and resolving insolvency by providing a much preferred alternative to winding up, in situations where a company is unable to pay its debts.
“The CAM Bill is a true reflection of the positive change being made in Nigeria through the power of collaboration between the arms of government and the private sector,” Ogiemudia says.
Yemi Candide-Johnson SAN is the senior partner at Strachan Partners and current president of the Lagos Court of Arbitration (LCA). He has decades of experience advising clients on commercial transactions and dispute resolution. To him, the CAM Bill is “alert, responsive and agile” making it fit-for-purpose with key provisions including:
The introduction of the “interests of justice” exception to the famous Foss v. Harbottle rule which will now afford minority shareholders greater protection from the abuse of power by the majority;
The introduction of damages as a remedy for a shareholder who successfully sues for the infringement of his personal rights.
The unified efforts of the Presidential Enabling Business Environment Council, (PEBEC) through its secretariat, the legislature, the Nigerian Bar Association - Section on Business Law (NBA-SBL), and multiple stakeholders have seen this Bill come to life.
With the current aspiration of PEBEC to move Nigeria to the sub-100 position on the World Bank Doing Business Rankings by October 2019, the CAM Bill plays a more than instrumental role in this strategic plan.
There is no question - Nigeria is ready and open for business.
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