The enactment of the Companies and Allied Matters Act, 2020 (“CAMA 2020”) introduced a significant development in Nigerian corporate law by permitting the incorporation of private companies with a single shareholder1. This represented a departure from the position under the repealed Companies and Allied Matters Act, 1990, which required every company to have a minimum of two shareholders.
Following the commencement of CAMA 2020, the Corporate Affairs Commission (“CAC”) initially permitted share transfers in private companies, such that a company initially incorporated with two or more shareholders could apply to reduce their shareholding to one. which resulted in such companies becoming single shareholder entities. The CAC, however, subsequently adopted a restrictive interpretation of the provisions of CAMA 2020 and took the position that private companies incorporated before the commencement of CAMA 2020 could not restructure their shareholding to become single shareholder companies.
