Law Of CAMA, The CAC Proffers Solution To Protesting Churches To Dissolve Into Associations

The Corporate Affairs Commission (CAC) has announced that churches, religious bodies and non-governmental charitable organizations registered with the commission as association were free to dissolve as a registered association if they were not comfortable with the newly signed Company and Allied Matters Act (CAMA) 2020, ASIRI NEWS gathered

CAC’s Registrar General, Alhaji Garba Abubakar who made the disclosure in Abuja, stressed that it was not mandatory for associations to be registered before they can operate.

“Anybody that feels he does not want to come within regulatory oversight, if you feel your members will agree with you to run the association and they make donations individually, you don’t have to register with CAC. But for as long as you register, because it is not a business, there are a lot of physical exemptions granted to associations, the government should be interested in how these organizations are run and whether the income and property are being utilized for the objective enshrined in the constitution of the association,” he said.

He adds: “For businesses, the law is saying you must register. It is mandatory if you are carrying out business using names rather than your surname or full names, the law says you must register. But, for associations, you don’t necessarily have to register.”

The CAMA Act signed into law recently by the President has generated tension in the country, with the Christian Association of Nigeria (CAN) rejecting the law and describing it as ungodly. However, CAC said the law was not targeting any particular group, but to close gaps against corruption and to instill confidence in foreign NGOs and foreign donors in line with global practices.

According to Abubakar, the new law has given CAC the power to classify associations. He explained that “this classification may be according to how the objectives are set, they may be religious or they may be non-governmental. One fundamental difference between associations and companies is the requirement that whatever asset or property the association owns should strictly be used to pursue the objectives of the association. We have a provision dealing with the suspension of Trustee as enshrined in section F39 of the Company and Allied Matters Act (CAMA) 2020.

“This is not targeted at any particular group, but what we have done is to bring our law to be consistent with what is obtained in other countries. All these provisions borrowed from the Charities Act of the United Kingdom (UK),” he stated.

He explained that “the law says if CAC has reasonable grounds to believe that any Trustee due to misconduct, or mismanagement, or allegation of fraud, after an enquiry, there has to be an enquiry. The meaning of enquiry is that you have to give the other person fair hearing and the accused have to defend themselves. CAC will now recommend to the Minister of Industry, Trade and Investment based on their findings and the Minister can approve the suspension of the Trustee.”

Abubakar said the new law has provided for the establishment of Administrative Proceedings Committee (APC) which will be chaired by the Registrar General of CAC with about five directors as members, a representative from the Ministry of Industry, Trade and Investment, with observers from members of the civil society groups, and other relevant groups.

Another scenario for suspension of a Trustee under the new law is the court. That is, “if CAC approaches the court in respect of an allegation against a trustee bordering on corruption or misconduct, or if 20 per cent of the membership of an association approach the court, if found guilty, a trustee can be suspended.

The registrar stated further: “There are provisions of the law dealing with dormant accounts by incorporated Trustees. The law has imposed an obligation on the banks to inform the commission about any account of any association that has been dormant for the period of five years, and once they give that information, no transaction should be allowed on that account without notifications to CAC. Even when we have reasons to believe that the account is now active, they cannot allow unhindered access to the account without notification to the CAC.

“The law has also given CAC the right where such an account is dormant to give directives for the balance to be transferred to another association with similar objective because the whole essence of having money in an incorporated Trustee account is to utilized it to pursue the objective of that association.

“So, if you have established an organisation to support maybe the IDPs, and you have money in your account that has been there for five years, you are not supporting anybody and nobody is touching the money, the money is not for you personally. After five years, CAC can give directives that this money should be moved to another organization that is established for similar objectives so that this money will be utilized.”

Abubakar said under the new law, “except for those limited by guarantee, the income and profit cannot be shared by members of an association but strictly used for the objective of the association. If you are on the wrong side of the law, of course, laws are to be obeyed and if there are infractions, there will be a sanction,” he stated.

Associations are now required to maintain financial information with the CAC, their day to day income, their expenditure and at the end of the year when they are filing in their financial returns, the law requires them to submit the account statement of the association to CAC.

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