On 15th February 2023, President Muhammadu Buhari signed the Business Facilitation (Miscellaneous provision) bill into law. This law seeks to consolidate and reaffirms the PEBEC’s role in eliminating unnecessary bottle-necks in MDAs.
While the provisions of the Act contain directives at MDA, the Schedule of the Act has amended the following laws:
- The Companies and Allied Matters Act 2020,
- Customs and Excise Management Act.
- The Nigerian Export Promotion Council Act
- The Export Prohibition Act
- The Financial Reporting Council Act
- The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act
- The Immigration Act
- The Industrial Inspectorate Act
- The Industrial Training Fund Act
- The Investment and Securities Act
- The National Housing Fund Act
- The National Office for Technology Acquisition and Promotion Act
- The National Planning Commission Act
- The Nigerian Customs Service Board Act
- The Nigerian Investment Promotion Commission Act
- The Nigerian Oil and Gas Industry Content Development Act
- The Nigerian Ports Authority Act
- Patents and Design Act
- Pensions Reform Act
- Standards Organisation of Nigeria
- Trademarks Act.
For this article, we will focus on key highlights from the amendment of the Companies and Allied Matters Act (See Schedule, Part 1 of the Business Facilitation (Miscellaneous Provisions) Act 2023).
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- Increase of share capital: A company may now increase its issued share capital by allotment of new shares by a resolution of the Board of Directors, subject to the articles of association or as authorized at a General Meeting. See amendment to Section 127(1). This means that the long-standing rule that increases in share capital and allotment must be by special resolution, has been abolished. A company may increase its share capital by its Board of Directors and, as authorized in its Articles of Association or General Meeting.
- Authority of Directors to allot shares: The authority of Directors to increase share capital must be expressed via a General Meeting or the Companies Articles. See amendment to Section 149.
- Time to exercise pre-emptive rights: A defined time for existing shareholders to exercise their pre-emptive rights has been described by the amendment of Section 142(2)(c). Here, where an offer to existing shareholders is not accepted within 21 days, it is deemed declined.
- Time for filing return of allotment: The return of allotment filing, expected to be done within one month, has been reduced to 15 days. See Section 154.
- Priority for a holder of fixed charge: The holder of any fixed charge will now have priority over all company debts, including preferential debts. This is in addition to the provisions of Section 204 of CAMA. See Section 207(4).
- Notice circulation: Circulation of notice of meetings can now be given to any member personally, electronically, by sending it by post to him or his registered address, or where he has to registered address within Nigeria, to the address supplied by him to the Company for giving notice to him. This amendment also includes the deletion of Section 244 (3).
- Electronic voting in meetings: Electronic Voting is now recognized. See amendment to section 248(1).
- Number of Independent Directors: The requirement that a public company must have at least 3 Independent Non-Executive Directors has been abolished. The amendment stipulates that at least 1/3 of its total number of Directors shall be independent. See amendment to Section 275(1) and (2).
- Removal of Director: Where a Director’s removal is based on fraud, dishonestly, or unethical conduct, such a Director is disqualified from being a Director. This puts to rest the argument that where a Director is removed from a company instead of resigning, such a Director cannot be appointed Director in any other company. See amendment to Section 283.
Other notable amendments to the laws mentioned above were captured under the Schedule.
Disclaimer: The critical items highlighted above are solely for academic purposes and should not be taken as legal counsel. For further information, kindly email u.ukefi@zuriel.com.ng, or contact our office, Zuriel Law Practice, 14a Dasilva Street, Off Ayo Jagun Street, Lekki Phase 1, Lagos.