Following the enactment of the Companies and Allied Matters Act (“CAMA”) 2020, there has been positive changes to the incorporation process of companies limited by guarantee (Ltd/Gte). The process is largely the same as in the repealed CAMA, however requirement and process for procuring the consent of the Attorney General of the Federation has been modified to allow for a simpler and more efficient incorporation.
While the consent of the Attorney General of the Federation (“AGF”) is still a pre-requisite for the registration of a company limited by guarantee, there is now a specific time within which the AGF must issue the approval or objection. Under the repealed CAMA, the AGF had the prerogative to issue or withhold consent and there was no timeline attached to such consent.
The AGF is now required to grant approval for the incorporation of a Ltd/Gte within thirty (30) days (where there are no objections or other cogent reasons for refusal) of receipt of the incorporation documents. If the AGF’s approval is not issued within the stipulated time, the promoters of the Ltd/Gte can place an advert in three (3) national newspapers and invite objections to the incorporation of the company within twenty-eight (28) days. Where there are no objections, the CAC can proceed to register the company without the AG’s consent, after further advertising the application in three national newspapers.
This provision is a welcome development as it removes a bottleneck in the process for the incorporation of Ltd/Gtes and makes the incorporation process more efficient. Under the prior procedures in the repealed CAMA, the incorporation of Ltd/Gtes could take as long as eight (8) months to complete. We expect this timeline to improve materially as the CAMA 2020 changes are implemented.