The Companies and Allied Matters Act CAMA 2020 was signed into law by President Muhammadu Buhari and serves as the apex regulatory guide for Corporate practice in Nigeria.
Unlike the previous CAMA 2004(now repealed), the new CAMA has certain provisions governing Corporate Insolvency practice in Nigeria which revolves around the methods and processes used to manage companies in a state of Insolvency or debt.
This article will be talking about the most important provisions of CAMA 2020 on Insolvency practice in Nigeria, with a focus on :-
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– Who can become an Insolvency practitioner in Nigeria.
– How to become an Insolvency practitioner in Nigeria.
– The new methods of Insolvency/Debt Recovery and Management under CAMA 2020.
Who exactly is an Insolvency practitioner?
An Insolvency practitioner in Nigeria is a person who acts and renders insolvency management services as a :-
– Liquidator or provisional liquidator.
– An official receiver.
– An administrator or administrative receiver or receiver/manager
– A supervisor of a company’s voluntary arrangement.
Who is eligible to be an Insolvency practitioner in Nigeria?
– A Lawyer as defined under the Legal Practitioners Act (LPA) or accounting degree holder(ICAN/ANAN- accredited) with a minimum 5- year post-qualification experience ranking.
– A holder of an authorization grant by the Corporate Affairs Commission (CAC).
– Any certified member of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) or any other body recognized by the CAC.
– A member of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN).
What makes up the Regulatory Framework governing Corporate Insolvency in Nigeria?
Corporate Insolvency in Nigeria is governed by :-
– The Companies and Allied Matters Act CAMA 2020
– The Corporate Affairs Commission (CAC)
– The Companies Regulations 2021
What are the new methods of Insolvency practice introduced by the CAMA 2020?
Two novel introductions of the CAMA 2020 to Corporate Insolvency practice in Nigeria are the processes of :-
– Company Voluntary Arrangements :- Which are enforceable agreements for the payment of outstanding debt obligations between a company and its unsecured creditors.
– Administration :- This is an Insolvency practice measure involving the appointment of an administrator to efficiently manage a company’s assets in order to partly or wholly resuscitate the company as an alternative to winding-up the company.
What are the requirements for becoming an Insolvency practitioner?
The requirements for Insolvency practitioner accreditation by the Corporate Affairs Commission are :-
– A Duly completed Form CAC-MISC.
– The payment of a prescribed application fee (50 Thousand Naira).
– Proof of membership of the relevant professional body recognized for Insolvency practice by the CAC.
– Evidence of professional experience of at least 5 years before the application date.
Is accreditation by the CAC as an Insolvency practitioner renewable?
Yes, Insolvency practitioner accreditation is renewable every 2 years at zero cost.
What happens when Insolvency filings are prepared, signed and submitted to the CAC by a non-accredited Insolvency practitioner?
The filings will simply be rejected by the CAC.