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Nigeria Introduces New Legal Forms of Doing Business and Other Company Changes Including Beneficial Ownership Register Requirements — Orbitax Tax News & Alerts

Nigeria has introduced changes through the Companies and Allied Matters Act 2020 (CAMA 2020), which was signed on 7 August 2020 and repeals the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria 2004. This includes the introduction of new legal forms of business through which a person can invest in Nigeria. In addition to the already existing forms, a person can now set up a private company with a single shareholder, a limited liability partnership, or a limited partnership. Further, in order to minimize costs of incorporation, the government replaced "authorized share capital" with "minimum share capital". With minimum share capital, promoters of a business can subscribe for shares that are needed at a specific time.

Unlike the practice in the past, Nigeria is also digitalizing several obligations for companies. This includes the possibility for companies to file returns electronically and make electronic share transfers and allowing private companies to hold e-meetings and virtual general meetings. A beneficial ownership register has also been introduced, and, going forward, there is a requirement for the disclosure of persons with significant control in companies in order to enhance corporate accountability and transparency.

Lastly, small companies or companies with a single shareholder are no longer mandated to appoint auditors at the annual general meeting to audit the financial records of the company. The government also restricted multiple directorships in public companies. Going forward, an individual cannot be a director in more than five public companies at a time.