Home VOL 6 | 2020 Effectiveness of the Companies and Allied Matters Act, 2020 In Nigeria’s Quest...

Effectiveness of the Companies and Allied Matters Act, 2020 In Nigeria’s Quest for Foreign Investment By Samuel E. Ojogbo

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Abstract

The corporation is the major vehicle for driving economic activities within a given jurisdiction. Thus, corporate statutes in every jurisdiction provide for the regulation of corporate actors and relationships among corporate participants. Companies and Allied Matters Act (CAMA) 2020 is the primary legislation that regulates the operations of corporations in Nigeria. Shareholders are contributors to corporate capital and they are protected under corporate statutes. This paper argues that shareholders’ protection is imperative for attracting investment capital and identifies protection under corporate statutes and their enforcement is fundamental to the decision to invest. The paper investigates the provisions in the CAMA for shareholders/ investors protection. This investigation reveals a major gap in the disclosure rules. The paper contends that this gap and the acknowledged enforcement deficiency in the Nigerian justice system renders the current CAMA inadequate for protecting investors. The paper suggests amendment of CAMA to among other thing provide timelines for the speedy resolution of cases concerning shareholders’ rights.

Keywords: Corporate Law, Corporate Governance, Shareholders Protection, Foreign Investment, Corporate Finance.

Introduction

On Friday 7th of August 2020 the President of Nigeria signed into law the long awaited Companies and Allied Matters Act (CAMA) 2020, which repeals and replaces the Companies and Allied matters Act 1990 that has been regulating the operations of Nigerian companies for thirty years. This piece of legislation has been hailed by most companies and industry experts as a great charter for the ease of doing business in Nigeria.

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