The Business Facilitation (Miscellaneous Provisions) Act 2023, also referred to as the “Omnibus Act” was enacted on February 14, 2023, by President Muhammadu Buhari as part of the Federal Government’s initiatives to support MSMEs in Nigeria.
The primary goal of the Act is to “promote the convenience of doing business in Nigeria and remove bottlenecks.”. The Federal Ministry of Justice, the Nigerian Economic Summit Group (NESG), the Office of the Attorney General of the Federation, the Nigerian Bar Association Section on Business Law (NBA-SBL), and the Nigerian Assoc for the Advancement of Science and Technology (NAAAST) collaborated with public and private sector stakeholders to develop the act.
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The world is interconnected, and there is a global competition for the allocation of resources. It is important for Nigeria to make herself attractive to prospective investors by removing bureaucratic bottlenecks which could hinder efficient interface with businesses.
This prompted the Federal Government of Nigeria to recognize the importance of Micro, Small, and Medium-sized Enterprises (SMEs) and startups to the Nigerian economy. These businesses serve as the foundation of the economy because they create jobs, significantly increase GDP growth, encourage the inflow of foreign direct and portfolio investment, foster innovation, and strengthen export trade within our regional business ecosystem. Also, the government realized that it was necessary to minimize the administrative, legal, and regulatory burdens that had previously hampered MSMEs’ and startups’ ability to grow and operate effectively to foster an environment where they could thrive.
Key Provisions Of The Business Facilitation Act
The following provisions are key and innovative provisions of the act:
The Act amended the provisions of CAMA 2020 in the following ways:
- A company may only increase its share capital during a general meeting. Now, a company may also increase its shares by a resolution of the board of directors.
- The time within which to accept new shares is now 21 days and no longer within a reasonable time, thereby introducing certainty.
- A company limited by shares now has 15 days to make a return on an allotment as against 1 month.
- electronic general meetings can now be held by all companies and not just private companies. This also extends to voting during any general meeting of a company etc.
- The Act amended the Investment and Securities Act to the effect that a private company can allot its securities to the public through any lawful means as the Securities and Exchange Commission may prescribe by regulation.
- The Act amended the NIPC Act that enterprises that have commenced business but subsequently secured foreign participation must register with the NIPC within three (3) months of such acquisition. Prior to this, the NIPC Act only mandates companies that secure foreign participation before commencement to register with the NIPC.
- The Act amended the Standard Organisation of Nigeria Act to the effect that the powers of the Director General in relation to hazardous products can only be exercised upon an ex parte application to the court.
- The Act has amended the Trade Marks Act to include services when referring to goods. Going forward, any reference to goods under the Trade Marks Act now includes services thereby widening the scope of the Act beyond tangible goods.
The objective of the act is to reduce bureaucratic barriers and make registration processes with Ministries, Departments and Agencies(MDAs) more transparent, making it easier to start and grow a business in Nigeria. The Act aims to institutionalize reforms that would guarantee transparency and prompt public sector delivery. The act deals with the obstacles and difficulties that new businesses in the nation encounter, such as bureaucratic difficulties, corruption and limited access to credit. The act aims to safeguard the sustainability of the business climate on transparency and efficiency in business. The Act also complements the objectives of the recently-enacted Nigeria Start-up Act 2022 in improving the investment climate and business environment in Nigeria.
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