This article highlights a few of the new provisions of the Companies and Allied Matters Act, 2020 (“the Act”) and examines how it aids the advancement of technology and the ease of doing business in Nigeria.
ELECTRONICALLY FILED DOCUMENTS
Section 860 of the Act provides that certified true copies of electronically filed documents are admissible in evidence, with equal validity as the original documents. The forerunner of the admissibility of electronically generated evidence is the Evidence Act, 2011 which amended the definition of documents to include computer-generated/electronic evidence [1]. The Evidence Act goes further and lists out conditions to be satisfied before a person can rely on computer/generated or electronic evidence[2]. These provisions are welcome developments and give credence to the notion that electronic evidence will be at the fore front of evidence tendered in court during this pandemic period and beyond. It is necessary to mention that strict compliance with the provisions of the Evidence Act 2011 will be necessary to make such evidence admissible before the courts[3]. Electronically filed documents benefits both the companies and the courts, as it will help companies save cost just as much as it will be easy to access and track by both the court and the members of the company.
ELECTRONIC INSTRUMENTS OF TRANSFER
Section 176 (1) of the Act also provides that instruments of transfer of shares shall include electronic instruments of transfer. Companies are able to record equity such as preferred shares, ordinary shares, convertible notes as digital shares, and issue them accordingly. A number of developed countries have since advanced towards digitization and Nigeria is following in this pattern with the advantage and convenience of electronic shares.
Electronic shares have quite a number of advantages over paper issued shares, one of which being that they cannot be easily lost or stolen as compared to the paper certificates.It is also easier to track and manage electronic shares by the company, and more important, the transitioning to electronic shares is an effortless and easy exercise.
REMOTE VIRTUAL MEETINGS
The Act also provides for remote or virtual meetings, provided that such meetings are conducted per the Articles of Association of the company. One of the advantages of this new statutory development is that it allows participants to connect from anywhere in the world. It also enables easy recording and sharing of documents with participants which encourages efficiency.This also implies that notice of meetings, agenda of meetings, length of notice of meetings, the content of notice of meetings, persons entitled to notice of meeting and service of the notice of meeting, the procedure of voting at meetings, proxies, and much more can now be done electronically. This is especially relevant today given the disruptions caused by the Covid-19 pandemic to company operations around the world as this was a major debate and point of discussion at the onset of the pandemic.It should also be mentioned that the Act further exempts small companies and a company with a single shareholding from conducting annual general meetings.
In conclusion, these new provisions are expected to alleviate to operations of small businesses and make the Nigerian business terrain more attractive to foreign investors.
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Adedoyin Adesina
FRC Associate
Oluwatumininu Jimoh
Corps Member attached to FRC
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Adedoyin Adesina
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Oluwatumininu Jimoh
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[1] Section 258 of the Evidence Act, 2011
[2] Section 84(5) of the Evidence Act, 2011
[3] Kalejaiye P; 2020; “The Importance of Electronic Evidence amidst the Coronavirus Pandemic”; accessed at https://www.google.com.ng?url?sa=t&source=web&rct=j&url+http://www.kusamotu.com/wp-content/uploads/2020/05/THE-IMPORTANCE-OF-ELETRONIC-EVIDENCE-AMIDST-THE-CORONAVIRUS-PANDEMIC-by-Paul-Kalejaiye-Esq..pdf&ved=2ahUKEwiZquv4g6XrAhVOT8AKHYJgCIUQFjADegQIRAB&usg=AOvVaw0gHJwCceT5ifG8xxOKi; retrieved 16th August 2020.
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