By Oluchi Elendu
For over three decades, the Companies and Allied Matters Act of 1990 had been regulating businesses in Nigeria without any reform. This is despite massive development and evolution in the business world which largely rendered some of the provisions of the law outdated.
On the 7th day of August 2020, the Companies and Allied Matters Act, 2020 (CAMA 2020) was signed into law by President Muhammadu Buhari. The Act introduced immense significant changes in Nigeria’s business environment and lessened obstruction which over the years had frustrated business dealings in Nigeria.
These significant changes made under the 2020 Act are to promote access to the business world for foreigners and national investors as well as encourage investments from new entrepreneurs that permit owners of small and medium-scale businesses to succeed and improve Nigeria’s economy.
Some of the apparent benefits of CAMA 2020 are:
Lessened the effectiveness of the regulations for Micro, Small, and Medium Enterprises.
Lessened the time and cost of setting up a company.
Encourage financial steadiness.
Improve investment by increasing investor confidence in the Nigerian financial sector as well as all sectors of the economy.
Create a conducive business for transactions.
Notwithstanding the above-listed innovations and assurance, CAMA 2020 does not come without its defects and uncertainties.
Section 849 of the amended CAMA 2020 provides for the merger of associations. It provides thus:
“Two or more associations with similar aims and objects may merge under terms and conditions as the Commission may prescribe by regulation’’.
Below are appraisals of section 849 of CAMA 2020 –
Section 849 of CAMA 2020 is unconstitutional –
The above section authorized the commission to merge incorporated trustees with the same aims which is both unconstitutional, and a total aberration of fundamental rights to freedom of association as provided for under section 40 of the 1999 Constitution which provides –
“every person shall be entitled to assemble freely and associate with other persons, and he may form or join any political party, trade union, or any other association for the protection of his interest’’.
Section 1(1) of the 1999 Constitution (as amended) made the Constitution the supreme law of the land and binding on all citizens of Nigeria. Furthermore, section 1(3) of the 1999 Constitution (as amended) provides – “if any law is inconsistent with the provisions of this constitution, this constitution shall prevail, and that other law shall to the extent of its inconsistency be void”, thus declaring any conflicting laws with any provision of the constitution inapplicable to the extent of the inconsistency.
This is called covering the field. Under the doctrine of covering the field, neither the National Assembly nor the State House of Assembly can make a valid law covered by the constitution. This was also the ruling of the court in the case of Attorney General of the Ogun State v. Attorney General of the Federation (1982) 2 NCLR 166.
The Court of Appeal, in the case of Inspector General of Police v. ANPP and Ors applied this doctrine by declaring the provisions of the Public Order Act which provided that a permit is needed from the Governor before people can assemble in public, contrary to the provisions of fundamental human rights of freedom of expression and association provided for under S.40 CFRN 1999 (as amended) and therefore null and void.
Section 40 of the Constitution is very explicit in granting trustees and members of the Board of Trustees of a duly registered Incorporated Trustee protections under the law.
Considering the above, an association cannot be dissolved except in accordance with section 850 of CAMA nor can it be merged with another Association with similar objects’ without infringing on the fundamental rights of the trustees because they are afforded protection under the law. It is therefore submitted that the provision of Section 849 is inconsistent with the provisions of the constitution and is therefore null and void to the extent of that inconsistency.
Section 849 CAMA 2020 is autocratic-
From the foregoing, the provision of section 849 of CAMA is autocratic as it fails to bring into the limelight the sovereignty of the people as enshrined in the constitution under S. 14 (2)(a) CFRN 1999 (as amended). This democratic precept includes the protection of fundamental human rights as provided in the constitution. It is therefore autocratic and tyrannical for an association(s) to be merged without the consent of the persons who formed the association and therefore constitutes a violation of their democratic rights.
Section 849 of CAMA is incomplete –
The section is incomplete as information with regards to similarities in association, the procedure for a merger, etc. were not provided by the regulation.
Conclusion:
It is submitted that Section 849 of CAMA is inconsistent with the provisions of the 1999 Constitution of the Federal Republic of Nigeria (as amended) which is the supreme law of the country and is therefore null and void. This article serves as a call to the National Assembly for an urgent review in other to prevent possible autocratic exertion of powers by the Registrar-General of the Corporate Affairs Commission.
Oluchi Elendu is a Human Rights Public Interest Lawyer, Chartered Mediator and Conciliator (ICMC) Nigeria, and a trained data collector/analyst in the criminal justice sector.
