Since the formation of the Presidential Enabling Business Environment Council (PEBEC) in 2016, with a mandate to improve the ease of doing business in Nigeria, several reforms have been implemented in the business environment. Notably, on the World Bank Ease of Doing Business ranking, Nigeria’s ranking improved 24 places to 145 in 2017, amid reforms initiated by PEBEC.
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To give a legal backing to the above, and ease regulatory gridlock to doing business, the Senate recently passed the amendment of the Companies and Allied Matters Act (CAMA) into law, on 15th of May 2018. The amended act allows for; sole ownership of a Company (with limited liability); limited liability partnerships (beyond the prior limitation to accounting and law firms); reduction in the required minimum share capital; e-Business registration; and removed all unnecessary regulatory requirements for MSMEs (e.g. mandatory AGM).
Though long overdue, the amendment is broadly positive for Domestic/Foreign Investors and the larger economy, as it further eases the regulatory requirements for doing business and investing in Nigeria. However, with the new provision for a sole shareholder corporation, the overbearing influence of the owner may be a downside risk to sound corporate governance practices.