The Private Companies Conversion and Listing Bill 2013, which recently passed second reading, will enable private companies operating in the country to comply with regulatory requirement of the Nigerian constitution.
The deputy chairman, House Committee on Capital Market Institutions, Chris Emeka Azubogu, disclosed this in Lagos during an interactive session with journalists at the weekend, remarking that the bill when passed into law would also stabilise the macro-economic system.
The Act will also boost the contribution of the formal sector and that of the Nigerian capital market to the gross domestic product (GDP).
The proposed act provides for companies whose shareholders’ funds exceed N40 billion or annual turnover exceed N80 billion or total assets exceed N80 billion to convert to public liability companies and get their shares listed on any stock exchange that is registered by the Securities and Exchange Commission (SEC), the apex regulatory body of the capital market. The bill which is a private bill is being sponsored by Mr Azubogu as a concerned stakeholder in the Nigerian economy and the capital market in particular.
When the bill is passed into law, a private company that falls into the category shall, within 12 months from the commencement of the bill, take all necessary steps to convert from a private limited liability company to a public company within the provisions of the Companies and Allied Matters Act (CAMA).Such a company shall, within 12 months from the date of conversion, take all necessary steps to list its shares on a stock market for brokerage.
Azubogu said a private liability company, which the provision of the bill applies, shall maintain or cause to be maintained proper accounts and records to enable fair view, to be formed, of its assets, liabilities, income and expenditure. He added that the SEC shall in addition to its powers under the Investment and Securities Act 2007 have powers to administer the provision of the bill among others.
He listed the incentives that companies that fall into this category shall enjoy as follows: If a company lists 40 per cent of its issued share capital, it shall be eligible for a tax incentive at a rate of one-third of its applicable income tax, 30 per cent of its issued share capital, shall enjoy up to one-fourth of its applicable income tax while the company that issue up to 20 per cent of its called up capital will get one-eighth of its applicable income tax.
Source : Leadership