How CAMA 2020 Reshaped the Corporate Affairs Commission in Nigeria

The duties of the Commission are set out in section 7 of the Companies and Allied
Matters Act and they include the following:
1. To administer the Act, including the regulation and supervision of the
formation, incorporation, management and winding up of companies;
2. To establish and maintain company registries and offices in all the states of the
Federation suitably and adequately equipped to discharge its functions under
the Act or any law in respect of which it is charged with responsibility;
3. Arrange and conduct investigations into the affairs of any company where the
interests of the shareholders and the public so demand;
4. To perform such other functions as may be specified by any Act or Enactment;
5. To undertake such other activities as are necessary or expedient for giving full
effect to the provisions of the Act.
The Commission also registers Business Names, Incorporated Trustees and
provides a wide range of ancillary services. As an aside, it has been posited that these
functions should not collude or affect the powers, duties or jurisdiction of the
Securities and Exchange Commission under the Investment and Securities Act.8

Equally, the Commission has the power to carry out all the above mentioned functions
and, in addition, it may apply to court for directions in respect of any matter
concerning its duties, powers, and functions under the Act and, on any such
application, the court may give such directions and make such further order as it
thinks fit.9 The Commission may also make enquiries on any person or company
relating to compliance with the Act.10
It is worthy of note to state that the Commission has offices in all the states of
the federation. As a result of commercial climate of some states, there arose the need
to have more than one office e.g. Lagos State has three offices situated at Yaba, Ikeja
and Marina. The following are among the services offered at the state zonal offices
with the aim of bringing the services of the Commission closer to the people11 and
they include:
i. Business name registration;
ii. Processing of statutory filing under the Act and subsequent transfer to the
Headquarters for further necessary actions;
iii. Verification and assessment of applications for company incorporation after
which they are sent to the Headquarters for final approval and registration;
iv. Sale of all statutory forms and publications of the Commission;
v. Responding to enquires and complaints in respect of the services of the
Commission;
vi. Handling the preliminary process of accreditation of professionals like lawyers,
chartered accountants and chartered secretaries.

The duties and powers of the Commission will be subdivided and discussed in
full details as follows:
1(a) Regulation and Supervision of the Formation of Companies, Business Names
and Incorporated Trustees
Under the CAMA, any two or more persons can form and incorporate a
company.13 The following types of companies exist:
(i) Company Limited by Shares: This is a company having the liability of its
members limited to the value of the shares he holds.
(ii) Company Limited by Guarantee14: This is a company without a share
capital. It is a non-profit oriented company where the liability of its members
is limited to such amount as the members respectively undertook to contribute
to the assets of the company in the event of it being wound up. Due to the tax
exemption and other benefits granted to this type of company, the consent of
the Attorney General of the Federation is required for the registration.
(iii) Unlimited Company15: This is a company where the members’ liability is not
limited to any particular amount.
Each of these primary types of companies may be a private16 or a public
company17. A private company is one, which places restriction on transfer of shares by
members, and limits its membership to 50 persons. It is also prohibited from inviting
the public for subscription to its shares or debentures. On the other hand, a public
company has no such restrictions as its shares can be freely traded on. It can be listed
or unlisted. It is usually listed when it is quoted on the Stock Exchange.18
The minimum share capital required of a private company is N10, 000 and for
a public company, it is N500, 000. This requirement seems inadequate with the value
of the naira having changed drastically between 1990 (when the law was made) and
today. The Memorandum of Association of the company must state that the
subscribers "shall take amongst them a total number of shares of a value of not less
than 25 percent of the authorised share capital and that each subscriber shall write
opposite his name the number of shares that he takes".
Taking cognizance of the need for business expediency, the CAMA allows
Attorneys, Accountants, to hold shares for promoters, provided the fact of such shares
held on trust is disclosed in the Memorandum & Articles of Association. A number of
foreign investors in order to expedite the incorporation process give Powers of
Attorney to local professionals to incorporate companies for them and to obtain the

relevant statutory licenses and approvals for the establishment of enterprises in
Nigeria.19
Part B is for Business Names –This is restricted to Sole Proprietors,
Partnerships & Firms
Business Names: These are the names or styles under which any business is carried
on, whether in partnership or otherwise. The expression ‘firm’ is used when 2 or more
persons have entered into a partnership with a view to carrying on business. Business
names are to be registered under CAMA where the name consists of an addition to a
person’s name. e.g. "John Smith" is not required to be registered, but "John Smith &
Co" requires registration.20
Sole Proprietorship: This is a one-owner business, and should be registered with the
CAC as a Business Name under Part B of CAMA.
Partnership/Firm: This has the same format as a registered sole proprietor, except
that there is more than one person involved.21
Part C: Incorporated Trustee: This is used for establishing non-profit making
organizations popularly referred to as Non-Governmental Organizations (NGOs). It is
used for the establishment of social, scientific, educational, religious, cultural and
other similar bodies. The organization is required to appoint trustees who will then be
registered as the "Incorporated Trustees of XY Educational Support Foundation". The
Commission is saddled with the responsibility of ensuring compliance with the
provision of the Act in relation to the formation of companies.
1(b) Incorporation and Registration of Companies, Business Names and
Incorporated Trustees
Incorporation of Companies: In registering a company under Part A of the Act,
the following should be delivered to the Corporate Affairs Commission for
registration:
i) Availability/Reservation of Name Form: This is done by obtaining and filling
Form CAC 1. Section 32 of the Act permits reservation of names for 60 days.
ii) Prepare the requisite incorporation documents and pay the stamp duty; there
must be strict compliance with section 35 of the Act. The incorporation
documents include;
Memorandum and Article of Association
Notice of address of registered address22 (form CAC)
Particulars of Directors (form CAC7)
Authorized share capital (form CAC2)
Notarized statutory declaration in a prescribed form (form CAC4)