Economy

The New CAMA and the Rules of ‘KARMA’

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In the wake of the easing of lockdown on the economy as a result of the Covid-19 pandemic, President Muhammadu Buhari took a crucial step by vetoing the Companies and Allied Matters Act, 2020 (CAMA 2020) Act Cap C20 Laws of the Federation of Nigeria. The presidential assent to the amended act repeals the Companies and Allied Matters Act (1990) (1) (the ‘Repealed Act’). The Corporate Affairs Commission (CAC) of Nigeria, established in 1990, is headed by the Registrar-General who is charged with the daily operations of business activities in the country. Before CAMA came into being, operating businesses in the country were coordinated by Companies Act (1968).

Since it was passed into law by the 9th Assembly of the Nigerian Senate, the 870 sections contained in 604 pages has received knocks and kudos from all sections of concerned citizens. The ensuing arguments of both sides of the divide is directed at the rationale behind some of the key changes in the newly introduced CAMA. On one hand, the ‘antagonists’ question the veracity of the unmistakable traps in the voluminous and newly-introduced Nigerian business legislation.

Ideally, one will wonder at the interrelation between the new Nigerian CAMA law and the ancient Hindus ‘Karma’: one is a mortal reality while the other is a body of philosophy backed by the world of Spiritism. A closer observation at some of the 12 laws of the Karmic teachings establishes to certain extents the commendations and condemnation of the new company law signed in August, 2020.

According to the Karma laws, life is closely linked to the cause and effects phenomenon. The perception of one school of thought as relating to the new CAMA legislation is based on their inferences, experiences and biases. This will in turn influence decision to be made by such individuals or association. Take for instance, one of the largely contended section of the new CAMA law is the section 839 which states thus:

839 (1) The Commission may by order suspend the trustees of an association and appoint an interim manager to manage the affairs of an association where it reasonably believes that –

   (a) there is or has been any misconduct or mismanagement in the administration of the association;

   (b) it is necessarily or desirable for the purpose of –

                  (i) protecting the property of the association

(ii) securing a proper application for the property of the association towards     achieving the objects of the association, the purposes of the association of that property or of the property coming to the association

(iii) public interest; or

  (c) the affairs of the association are being run fraudulently.

From the above quoted section of the C20, the grievance of the opposing party is sincerely understood. The current administration in matters concerning public policies has not really gone down well with a good number of the populace.

This coincides with the third Law of Karma – the Law of Humility, ‘One must accept something in order to change it. If all one sees is an enemy or a negative character trait, then they are not and cannot be focused on a higher level of existence.’ If the newly-introduced law which is by far more flexible than the previous one is geared towards making business running in the country easy, the needed publicised ‘change!’ mantra must begin with some of those in government.  For those against the law, the perceived law seems as a faux pas, an easier passage to further oppress the masses.

Similarly, the outright criminalisation of unregistered business entities in the country pouts at the finesse of the CAMA 2020 legislation. By relevant statistics, the informal sector contributes a significant part of the annual Gross Domestic Product (GDP) to the growth of the Nigerian economy. As Economists will concur, the informal sector is the life wire of every economy. In one of the reports by the Bank of Industry, the informal sector contributes up to ‘65 percent of the country’s GDP.’  In real terms, the informal sector is comprised of rural small-scale farmers, urban small-scale retailers, artisans and freelancers.

The section reads:

863. (1) A person or association of person shall not carry on business in Nigeria shall not carry on business in Nigeria as a company, Limited Liability partnership, Limited partnership or under a business name without being registered under the act.

       (2) If an individual, corporation or association or persons required under this Act to be registered carries on business without registration or under a name registration of which has been refused or cancelled under this Act, the individual, corporation or every partner in the firm commits an offence and is liable on conviction to a fine prescribed in the commission’s regulation from time to time, of N 200.00 for every day during which the default continues, and the court shall order a statement of the required particulars for the registration of the business to be furnished to the Commission for registration within such time as may be specified in the order.

By implication, over 21 million Nigerians who fall within the bracket at the risk of ‘a fine prescribed in the Commission’s regulations from time to time’. In a way, the section will help the Corporate Affairs Commission (CAC) ascertain the total number of businesses actively operating in the country. Before enforcing the new legislation, the government may like to answer these questions:  What facilities have regulatory bodies provided to companies? What are the support systems provided to small industries, businesses and corporate bodies? What steps are taken by the CAC to salvage a nearly bankrupt company? Are there any projections aimed at the growth of the private sector in the next five years? 

In the Karmic Fourth Law of Growth: Wherever you go, there you are. It is we who must change and not the people, places or things… All we are given is ourselves. That is the only thing we have control over. When we change who and what we are within our hearts, our lives follow suit and change too. The government should understand that there is need to look inwards by implementing pragmatic policies that will support the existing registered firms before enforcing section 863 of the new CAMA law. Rather than arm twist smaller businesses in the Informal sector, government should work at improving on the business operating standards in the country.

Does the new CAMA Law take cognizance of the ‘NGO Bill’? Let us revisit Section 839 of the CAMA law:

(1) The Commission may by order suspend the trustees of an association and appoint an interim manager to manage the affairs of an association where it reasonably believes that –

   (a) there is or has been any misconduct or mismanagement in the administration of the association;

   (b) it is necessarily or desirable for the purpose of –

                  (i) protecting the property of the association

(ii) securing a proper application for the property of the association towards     achieving the objects of the association, the purposes of the association of that property or of the property coming to the association

(iii) public interest; or

  (c) the affairs of the association are being run fraudulently.

It is infamously purported that this is an attempt by the government to foist the disregarded NGO bill on Nigerians by inserting certain sections of that bill into the new CAMA legislation. This is untrue. In the Karmaic ninth Law of Here & Now: ‘One cannot be in the here and now if they are looking backward to examine what was or forward to worry about the future. Old thoughts, old patterns of behavior, and old dreams prevent us from having new ones.’Even though it is evidently clear that there are no significant similarities between CAMA 2020 and the rejected NGO Bill, the government at all tiers usually fail to usually fail to engage all major stakeholders before drafting bills or formulating policies that affects a sector of the economy. This breeds suspicion and resistance due to the gulf in communication.

In reaction to Section 839 (1)of (CAMA 2020) Act cap C20 Laws of federation of Nigeria, some leading church leaders have publicly decried the new legislation as a scheme aimed at gagging the church. The Spiritual leader of INRI Evangelical Spiritual Church, Primate Ayodele aired his disproval of the new legislation noting that, ‘Nobody can shut down my account, no one can get a trustee for me. The government needs to be cautioned; they don’t have anything to do with the church.’ Similarly, Bishop David Oyedepo of the Living Faith Church was quoted as saying, ‘The church works on the pattern delivered by God not the pattern of man. The government has no power to appoint people over churches. This is a secular nation. The church is the greatest asset of God in this country. Please be warned. Judgment is coming. The Lord says I have been still but now I will arise. Anybody that is in this deal is taking poison. This will never work. I am waiting for a day when anybody will appoint a trustee over this church… You can’t gag anybody…’

The Section 839 (2) provides for the procedure of the earlier mentioned subsection 1 of Section 839. For the given condition of the commission to sufficiently order the ‘’suspension of the trustees of any association’, the erring trustees of the association shall be on order of Court upon petition by the Commission or one-fifth membership of any of such embattled association. From the look of things, this section follows a democratically crafted procedure. Under Subsection 3 of the Section 839, the ‘appointment of interim managers’ shall be aided by a duly constituted judicial process. This lay to rest insinuation by the clergymen.  This is echoed by the second Karmaic Law of Creation: ‘Life requires our participation to happen. It does not happen by itself. We are one with the Universe, both inside and out. Whatever surrounds us gives us clues to our inner state. Surround yourself with what you want to have in your life and be yourself.’

On a brighter side, the CAMA 2020 Law is cognizant of technological advancement with Section 861 and Section 176 (1) respectively approving the filing of certified true copies (CTC), other documents, shares transfer through electronic means. The new CAMA in accordance with Articles of Association of any company provides for virtual general meetings.

In the same light, S.223 (12) of CAMA 2020, the fees for filing to CAC has been reduced to 0.35% of the value of the charge. In accordance to S.98 with the new company regulatory Act, company’s seal is no longer compulsory while S.307 (1) of the Act prohibits a single individual from being a director in more than five (5) public companies.

For the purpose of flexibility and undue bureaucratic bottlenecks in the administration of private companies, S.402 of the new company law exempts any organisation with a shareholder from appointing auditors for their financial records at the end of a fiscal year. Similarly, Section 330 (1) of the CAMA 2020 law states that the appointment of company secretaries is no longer a requisite perquisite requirement. Interestingly, distressed companies can now be rescued with regards to the provisions in S.443, S.549, S.718 and S.721.

Read Also: Tunisia Organises e-Business Exchange for Nigerians

Finally is the sixth law of the Karmic Law of connection: The smallest or seemingly least important of things must be done because everything in the Universe is connected. Each step leads to the next step, and so forth and so on. Someone must do the initial work to get a job done. Neither the first step nor the last are of greater significance. They are both needed to accomplish the task. Past, Present, and Future are all connected.

Babatunde Odubanwo is a media professional and writer with a background in Economics and History.

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Categories: Economy, Features, Financial Services

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