Questions Concerning the New Company Law In Nigeria
Just recently, the National assembly announced modifications to the Companies and Allied Matters Act (CAMA) which seeks to remove lawyers as middlemen for company registration. This new development caused several reactions.
On one hand, it seemed the legal profession raised an eyebrow. Could this be a sabotage?
On the other hand, nonlawyers seemed excited about this new development. It appears that there had been an unspoken disparity between what lawyers charged for company registration and what the clients were willing to pay.
Were lawyers charging arbitrarily? I think not. However… A few lawyers have accused the NBA of not protecting the interest of lawyers in times like this. But what exactly is the NBA supposed to do and are changes like this going to render the law profession obsolete? I will answer these questions quickly without wasting anyone's time.
The lawyer or the law, which comes first?
Everyone who passes through a university's LLB program is taught that the word "Law" has no universally accepted definition. As true as that may be, one thing is universally accepted. Law is for the benefit of man. Law was made for man and not man for the law. But what happens to a law that has stopped benefiting those it was made for and shifts only in favor of a microscopic few?
Answer: Hypothetically, that law is useless and serves no purpose. Lawyers are members of the judiciary. The function of the judiciary is to interpret the law. It is the legislature that functions as the maker of laws. Without the law, there won't be lawyers. The law dictates what the lawyer should do. Lawyers are learned in the law. They are trained to know where to find and apply where necessary but that's not all. Laws are not made for lawyers only but for everyone.
Everyone should and ought to know where to find the law and how to apply, but not everyone can, hence the need for lawyers. This is not the end of this article so let's look a little further. In Nigeria, a major part of our legal system is derived from English law. By virtue of our being colonized by the British, we were quick to adopt without major modifications their own laws rather than make new laws for ourselves. For instance, the CAMA was modeled after the English Companies Act. The CAMA was originally enacted in 1990 and ever since nothing about it has changed. 1990 was 28 years ago. It means that in the area of company regulations our National Assembly had hitherto lifted no finger.
Another pointer to our long sleep is the Land Use Act of 1974 which is still the law regulating land ownership and transfer. This law remains unamended. There are many other laws begging to be amended which, however, the legislature have not given attention to. Come down to the state level, for instance, the Lagos State Government in collaboration with the LGAs and LCDAs are charging taxes based on outdated laws that add no value. For instance, the Entertainment Tax Law which imposes a tax on hotels and restaurant defines entertainment as "A dance".
These kinds of laws hinder economic progress in many ways. Back to CAMA and why it was modified. The CAC recently launched its online platform for company registration and the reason for doing so is very simple. In line with the ease of doing business initiative which Nigeria embraced wholeheartedly, the Federal Government had instructed the CAC to look for ways to make registration of businesses fast, easy and convenient. To make this happen technology was brought to the rescue. Also, the middlemen had to be removed. Hence the new CAC online portal for self-registration. The old CAC has no provision for technology hence it had to be amended. This may be very unfair to lawyers but comparing it to the number of individual investors (both foreign and local) that will benefit from this new development, I think we both know where the scale tilts. If you are still in doubt, let's quickly take a look at the benefits of the amendment as outlined on the National Assembly's medium page.
7 Benefits of the Senate’s New Bill -#CAMA
1. It will make Nigeria’s business environment as competitive as its counterparts around the world.
2. One person can now open and run a company. This is good for start-ups and young entrepreneurs.
3. Promotes the use of technology in the registration of businesses.
4. Removes all the unnecessary regulatory provisions for small companies.
5. It reduces the minimum share capital for companies and start-up in Nigeria.
6.It creates another new category of legal identity for Nigerian businesses.
7.It ensures that Nigerians can now register their businesses from anywhere in the country through the e-registration system.
Will the legal profession become obsolete?
The legal profession is very conservative. It is so because it tries to cocoon itself and whom would you blame? Lawyers are unfairly treated, bashed and derogated against. Just recently, the NBA Tiger Branch chairman had a face off with the Lagos Commission of police simply because the former had staged a protest against the arbitrary increment of the land use charge.
Lawyers are called liars, they are hated, feared, revered and abused. In order to maintain its fast eroding image, many steps were taken to preserve the legal profession from harakiri. Hence, the Rules of Professional conducts were made. A rule stipulated that a lawyer could not advertise or deliberately solicit for clients. Hence he could only rely on close relatives, friends, and acquaintances for referrals. Without referrals, he would have nothing to work with. It would usually take a lot of years of hard work and perseverance for an average lawyer to finally start earning a reasonable sum.
Whereas, the well-established lawyers sucked in all the cash-strapping clients charging them highly for services that the average lawyer would have charged peanuts for. It began to appear that the profession was robbing itself. A dog eats dog situation. The backlash of this would be evidenced in the robbery technological advancement will bring. While the senior and successful lawyers would get it all, the average younger ones are left with little or nothing. The legal profession like many other professions would soon have to compete with machines. I predict that in ten years from now, the internet, Internet of Things, Artificial Intelligence as well as Blockchain Technology may begin to push out the traditional legal system.
But will the legal profession be erased completely?
The answer is No. Advocates will remain, solicitors will remain. Man is neither ready nor will ever be ready for artificial advocacy. Although there will come a time when: A new law school will be built out of the bricks of technology. Coding will become a compulsory course and lawyers would learn how to create smart contracts. Lawyers will learn solidity, and the work of the judiciary which is to interpret the law, adjudicate and win cases will be eased by autonomous platforms.
However, I predict that if the NBA does not wake up to the call early enough, the era of the wig and gown will phase out. I also predict that the existing legal framework for commercial transactions will undergo a baptism of fire, a complete overhaul while new laws will be made.
I applaud the National Assembly for its commendable work and push for more reforms especially with NIPOST and other ministries that have been eaten up by the worms of neglect. I am also calling for reforms of the financial sector, a new law on ISA giving SEC the nudge to open up to crowdfunding, the blockchain, and cryptocurrency.
Although my predictions are capped at a ten-year time frame, I foresee this happening sooner.
Disclaimer
This article is highly opinionated reflecting only the thoughts and reflections of the author. It should be taken as is and not as ought to be. This article is neither a sponsored post nor does it hold or express the views of a corporate body, a government agency or a group of persons. The article also does not express the views of the organizations mentioned within vis-à-vis the NBA, the Judiciary or the Legislature. This is purely a product of the author's ingenuity.