TheCable

A bill seeking to repeal and re-enact the companies and allied matters act (CAMA) has passed second reading at the senate.

The bill, which was passed by the senate under the leadership of Bukola Saraki, was not assented to by President Muhammadu Buhari.

In November, the president asked the national assembly to effect some corrections to the bill.

The president wanted section 26(5) of the act to read: “(a) Preserve the powers of the Attorney-General of the Federation to approve the registration of companies limited by guarantee and

“(b)Reflect the ease of doing business principles in a veto order (1) of 2017 on the promotion of transparency and efficiency in the business environment.”

Leading the debate on the bill on the floor of the upper legislative chamber on Thursday, Yahaya Abdullahi, senate leader, said the bill would enhance Nigeria’s business environment and make it competitive.

“Consent of attorney-general of the federation for a company limited by guarantee: three significant changes have been introduced in this aspect,” he said.

“Firstly, the bill dispensed with the requirement of consent of the AGF before registration of a company limited by guarantee and replaced with a duty on the commission to cause the application to be advertised in three national dailies. This is because there is no basis for consent of the AGF when the same promoters can opt to register an incorporated trustees whose objectives are similar.

“Secondly, the total liability of members of a company limited by guarantee to contribute to the assets of the company in the event of its being wound up has been increased from N10, 000 to N100,000.

“Thirdly, a framework for the conversion of companies limited by guarantee to companies limited by shares has been introduced.

“The bill introduces a business rescue policy and insolvency framework, slightly different from outright liquidation. The aim of this framework is to rescue companies from absolute demise.

“The provisions include the appointment of an administrator, mitigation of credit risks, and debt settlement arrangements.”

The senate leader said the bill would have the overall effect in making the country’s corporate law more in tune “with today’s business realities.”

The bill was passed for second reading after it was put to a voice vote by Senate President Ahmad Lawan.