The schedule of the BFA has made consequential amendments to at least 21 business-related laws in the bid to achieve its primary objectives as stated in Section 1 of the Business Facilitation Act, 2023.
INTRODUCTION
The Business Facilitation (Miscellaneous Provision) Act (BFA), 2023, is a legislative intervention by the Presidential Enabling Business Environment Council (PEBEC), passed into Law on February 13th, 2023, with the view of creating an enabling environment for businesses to thrive without unnecessary restrictions. The Business Facilitation Act has amended various business-related laws eliminating bureaucratic constraints to doing business in Nigeria. Some of these laws include; the Companies and Allied Matters Act, 2020, Customs and Excise Management Act, the Financial Reporting Counsels Act, the Immigration Act, the Investment and Securities Act, the National Office for Technology Acquisition and Promotion (NOTAP) Act, Trade Mark Act, Standard Organization of Nigeria (SON) Act, National Housing Fund Act, Nigerian Investment Promotion Commission (NIPC) Act, amongst others.
This article shall highlight the provisions of the (BFA) vis-a-vis the provisions of these laws, carefully emphasizing the amendments done, and the consequential impacts of these amendments on the Nigerian business Environment.
GENERAL PROVISIONS
By the provisions of Section 1 (1) a & b, the objectives of the Act are to eliminate bottlenecks, amend relevant legislation to facilitate and promote the ease of doing business in Nigeria as well as institutionalize all the reforms to ease implementation[1]. Generally, the BFA among other things, mandates all Ministries, Departments, and Agencies (MDA’S) of the Federal Government, which provide business-related services, to publish a complete list of requirements to obtain permits, licenses, waivers, filings, approvals, registrations certificates, and other services in accordance with their functions and to ensure that the list is kept up to date at all times[2]. MDA’s are also required to communicate their approval or rejection within the stipulated time, failure to which will be deemed an approval and a grant[3]. The BFA also provides for a One Government Directive, requiring the collaboration of all MDA’s to process and deliver services to the public and conduct necessary verifications or certifications. There is also now the requirement to have a service level agreement that will be binding on the MDA and which amongst others shall provide a list of products and services rendered, documentation, and timeliness required[4]. Further to these general provisions, the Registrar-General of the Corporate Affairs Commission (CAC), has within 14 days of the commencement of the Business Facilitation Act to ensure that all application processes at the CAC are fully automated from start to completion[5].
CONSEQUENTIAL AMENDMENTS TO OTHER BUSINESS-RELATED LAWS
The schedule of the BFA has made consequential amendments to at least 21 business-related laws in the bid to achieve its primary objectives as stated in Section 1 of the Business Facilitation Act, 2023. This article will briefly outline the amendments effected by the BFA on a few of these laws as well as the implications of these provisions.
THE COMPANIES AND ALLIED MATTERS ACT
The BFA has expanded the boundaries of the provision for the exemption of foreign companies registering as separate entities in Nigeria[6]by adding a third paragraph (paragraph (c)). By this, it has included the exemption of foreign companies that have been “exempted under any other Act of the National Assembly”[7]. To this effect, there are now three types (previously two) of exemptions available to foreign companies for the purpose of carrying on business in Nigeria. This additional provision has expounded the scope of the exemption and would go a long way to foster foreign participation in Nigeria.
Section 127 (1) of the CAMA provides for a Company (limited by shares) to increase its issued share capital only in a General Meeting. The BFA has amended this provision and has replaced the whole of (1)[8]. The implication of this amendment is that a resolution of the Board of Directors alone would suffice to increase the share capital of a company, of cause, subject to the terms imposed in the Article of Association.
Section 142 of the CAMA has been amended to restrict the enforcement of pre-emptive rights to existing shareholders, and has provided that the offer of shares be accepted within21 days after which it shall be deemed declined[9].The one-month requirement for returns on the allotment of shares to CAC[10] has also been reduced to 15 days[11].
In furtherance to this, the BFA has now imbibed the trend of technological advancement by making provision for electronic share certificates to be issued[12], allowing for virtual meetings[13], and electronic voting[14]. Before now, the CAMA restricted conducting of Virtual meetings to Private Companies[15] and the only valid means of voting was by show of hands or a poll[16].
By the provisions of the BFA, the minimum number of independent directors of a public company would no longer be three (3)[17] but one-third of the Board[18]. The BFA amended sub-section 3 of Section 307 of the CAMA (which provides for multiple Directorships) by introducing an entirely new sub-section 3 of Section 307, of the CAMA. To this end, the BFA emphasizes that a person can be a director in only five public companies – and any person who before the commencement of the Act was already a director in more than five public companies is required to resign as a director of all, but five, of the companies before the next annual general meeting of the companies, following two years from the commencement of the Act[19].
The provision of Section 572(a) of CAMA 2020 provides to the effect a company must have a due debt to a person of a sum exceeding₦200,000 (Two Hundred Thousand Naira), before it can be described as a company that is unable to pay its debt. However, the BFA has amended the provision to replace the₦200,000 (Two Hundred Thousand Naira),requirement with a sum to be determined by a regulation issued by the Commission. In simple terms, the Commission, by regulation would determine the amount that a company will owe before it can be said to be unable to pay its debt.
CUSTOMS AND EXCISE MANAGEMENT ACT
The most significant amendments under the Custom and Excise Management Act are in regard to goods that are uncleared or missing from vessels, aircraft, ships, and other vehicles. The BFA now requires[20] that a list of goods that have not been cleared should be made and reported on the fifth day after vessels have been cleared as opposed to the previous requirement of 15 days[21]. Also, with regards to the unloading of vessels, the customs officer is required to transfer uncleared goods to a government warehouse within 4 days as opposed to the previous provision of 14 days[22]. This will ensure expeditious handling of goods and would ensure that proper reports are made and kept in real-time.
The BFA also introduces the principle of a “single window”. The Act defines a Single Window[23] to mean a platform that allows parties involved in trade and import to lodge all transit data through a single-entry point interface to fulfil all regulatory requirements. This means that all data regarding imported goods should be passed through one interface. This will ensure proper monitoring of goods that are imported into the country for efficient control. Part 26 of the schedule to the Act inserts subsection (a) and (b) after Section 18 of the Custom and Excise Management Act further stating requirements for the use and maintenance of a single window.
FINANCIAL REPORTING COUNCIL ACT (FRCA)
The BFA has now made a compulsory requirement for every Company, government organization, and corporation to have financial statements and prepare them in line with financial reporting standards issued and adopted by the Financial Reporting Council of Nigeria[24].
IMMIGRATION ACT
The BFA has amended the Immigration Act to effect the following changes[25]:
By the provisions of the BFA only the Comptroller General of Immigrations now has the power to make a departure prohibition order, instead of the Minister. Changes in the particulars of business permits are to be given to the Comptroller General of Immigration. It also provides that the Immigration Service should accredit and use an electronic communication system to enable the automated submission of any document, information, or return required by the Act. In addition, it empowers the Immigration Service to make regulations relating to the standards of operation and quality of any chosen system.
INVESTMENT AND SECURITIES ACT (ISA)
Section 43 of the BFA[28] amends section 67(1) of the ISA. The amended subsection prescribes that no allotment of securities can be made unless certain conditions are met, which differ depending on whether the company is public or private. For a public company, the minimum number of securities to be allotted is as stated in the prospectus, as determined by the directors. The sum payable on application for that amount must be paid to and received by the company before any allotment can be made. For a private company, the conditions for allotment are prescribed by the commission through regulation.
NATIONAL OFFICE FOR TECHNOLOGY ACQUISITION AND PROMOTION (NOTAP) ACT
Section 5(2) of the NOTAP Act requires that every agreement or contract for the transfer of foreign technology to Nigeria must be registered with the National Office not later than 6 days from its execution. However, the provision of the BFA has included a proviso exempting companies from penalties for non-registration in their first two years of business operations, where the agreement in question is registered before the end of the two-year grace period[29].
TRADE MARK ACT
The provisions Section 67(a)of the Trade Marks Act has been amended, defining goods used in the necessary context within the TMA to include both goods and services, as the case may be. The general implication of this is that rights accruable to a trademark proprietor would now be applicable also to proprietors of a service mark in Nigeria.
Trade Mark is now defined under the BFA to include service marks, laying to rest the legal debate on whether a trademark includes a service mark.[30]
STANDARDS ORGANIZATION OF NIGERIA (SON) ACT