The newly signed Companies and Allied Matters Act (CAMA) 2020, if well implemented will enhance borrowings to the Micro, Small and Medium Enterprises (MSMEs) by financial institutions.
Some stakeholders in the financial industry gave the submission at the 10th webinar series by DCSL Corporate Services Limited in Lagos.
The News Agency of Nigeria (NAN) reports that President Muhammadu Buhari had on Aug. 7, signed into law the amended CAMA Act 2020 to further promote ease of doing business in the country.
Mr Shofola Osho, Company Secretary and Legal Adviser of the Development Bank of Nigeria (DBN) said that MSMEs were legal entities also entitled to accessing loans.
Osho said that the Act tends to promote ‘good governance’ whereas, single member companies could also push corporate governance better than most multi-member companies.
“DBN has been waiting for such opportunities to lend and support MSMEs.
“MSMEs with only one director or shareholder are legal entities and not different from other companies. Banks will lend to them.
“Corporate governance is all about corporate responsibility, compliance and other engagements. It is about commitment and a single member company can drive that.
“It can be easier for one man to push corporate governance than an army in the multi-member companies to do so,” he said.
The legal adviser, however, said that the act had taken away the mandate to have company secretaries.
Mrs Tosin Ajose, Lead Adviser, Deal HQ Partners said that it was progressive to have single member director companies.
Ajose, however, said that it was difficult to separate the company from the owner.
According to her, the burden of governance kills business in sub-sahara Africa.
“Business is to run and make profit but most companies are after their organogram and there should be balance.
“In a single member company, it is always difficult to separate the company from the owner, however, it is progressive to have a single member director,” she said.
Ajose also noted that the CAC had been burdened with a lot of responsibilities that had hitherto been the responsibilities of legal practitioners.
Mr Tolulope Sonaike, an Assistant Director, Corporate Affairs Commission (CAC) at the webinar said that the Act focused more on small and private companies.
Sonaike said that this was because small businesses engaged around 80 per cent of the workforce and contributed 50 per cent of the Gross Domestic Products (GDP) of the country.
“The objective of CAMA is to make doing and registering businesses easier, faster and for transparency.
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“The focus would be among small and private companies because they engage 80 per cent of the workforce and 50 per cent to GDP to ensure transparency in company engagements.
“It will also ease participation of all shareholders in bigger companies, e-meetings promotion and add value,” Sonaike said.
The webinar, with the theme “A Discourse on CAMA Act 2020 and its Implications for Businesses’ was moderated by Ms Ayotola Jagun, Chief Compliance Officer and Company Secretary, Oando Plc. (NAN)