If you run a lending business in Nigeria, CAMA is the law that determines whether your company legally exists in the first place.
Every license you hold, every loan agreement you sign, every investor conversation you have rests on the foundation of a properly registered and maintained company. CAMA 2020, which repealed and replaced the older Companies and Allied Matters Act of 2004, is the legislation that governs that foundation.
It covers how companies are incorporated, how they are governed, who controls them, and what happens when things go wrong. Understanding it is less about reading law and more about knowing what keeps your operation protected and defensible.
What CAMA governs
The full name of the legislation is the Companies and Allied Matters Act, 2020, and it applies to all companies incorporated in Nigeria, including private companies limited by shares, public companies, companies limited by guarantee, and limited liability partnerships.
The Act sets out the rules for incorporation and classification of business entities under Parts A and B, grants companies their legal personality and capacity under Sections 42 to 44, regulates share capital and ownership disclosure under Sections 119 to 165, and governs directors, company secretaries, and corporate governance under Sections 271 to 333. It also covers meetings and resolutions, financial records and audits, statutory filings with the Corporate Affairs Commission (CAC), and the full range of insolvency and winding-up procedures.
For lenders and credit providers, the relevance of these provisions goes beyond compliance formality. Regulators in Nigeria, including the CBN, FCCPC, and NDPC, increasingly cross-reference CAC records with their own databases. A company with unresolved filing gaps, undisclosed shareholders, or an inactive registration status sends a signal that most regulated lenders cannot afford to send.
Recommended read: Nigeria Data Protection Act (NDPA)
Corporate personality and what it means for lenders
Once a company is incorporated under CAMA, it becomes a separate legal entity with perpetual succession and the capacity to sue and be sued in its own name. This separation, established under Sections 42 to 44, is what gives limited liability its practical meaning. Your personal assets are not the company’s liabilities, and the company’s obligations do not automatically become yours.
The legislation does preserve circumstances where courts and regulators can look past the corporate form, particularly when the company is being used for fraudulent or unlawful purposes. For lending businesses, this matters because regulators are not naive about the ways corporate structures can be layered to obscure accountability. If your business uses holding companies, nominee shareholders, or complex ownership arrangements, those structures will be examined.
Incorporation requirements
Sections 18 to 41 cover the requirements for company incorporation. A company must reserve and receive approval for a unique name, submit its memorandum and articles of association, disclose its registered office address, and provide particulars of its directors, shareholders, and persons with significant control. Where applicable, minimum share capital requirements also apply.
A company cannot legally commence business until it is duly incorporated and, where required, has issued a statement of compliance. Running a lending operation through an entity that has not met these requirements exposes promoters and officers to personal liability. This is not a theoretical risk. In a sector where regulatory scrutiny has intensified, the CAC registration status of a lending entity is one of the first things checked during due diligence, whether by a potential banking partner, an institutional investor, or a regulatory inspector.
Ownership disclosure and persons with significant control
CAMA 2020 strengthened transparency requirements around ownership in ways that directly affect how lending businesses are assessed by regulators. Under Sections 119 to 122, companies are required to maintain a register of persons with significant control (PSC), disclose allotments and changes in shareholding, and file PSC information with the CAC.
Persons with significant control are individuals who hold more than 25% of shares or voting rights in a company, or who otherwise exercise significant influence or control over the company’s affairs. The PSC framework exists so that regulators can identify the ultimate beneficial owners of any business, regardless of how ownership is structured on paper.
For lending platforms and credit providers, this matters because regulators use PSC filings to assess fitness and propriety. If the ultimate owners of a lending business would not pass a regulatory suitability test, the PSC disclosure mechanism is what brings that to light. Missing or inaccurate PSC filings are treated as a governance red flag, not an administrative oversight.
Recommended read: Federal Competition and Consumer Protection Act
Directors’ duties and governance obligations
Sections 271 to 333 impose substantial obligations on the directors of Nigerian companies. Directors are required to act in good faith and in the best interests of the company under Section 305, exercise reasonable care, skill, and diligence, avoid conflicts of interest, and disclose related-party transactions under Sections 303 to 306. The Act also places restrictions on multiple directorships in certain circumstances.
Section 506 creates personal liability for fraudulent or reckless trading. Where a director has consented to, connived in, or failed to take reasonable steps to prevent a regulatory breach, personal liability follows. For directors of lending businesses, this means governance cannot be treated as something that only matters to large institutions. The same exposure applies to a fintech founder running a ten-person team.
The company secretary provisions under Sections 330 to 333 require public companies to appoint a qualified company secretary responsible for statutory filings, corporate records, and board compliance support. Neglecting this function has a practical cost: missed filing deadlines, outdated records, and avoidable regulatory exposure.
Financial records, annual returns, and the CAC
Under Sections 374 to 405, companies must keep proper accounting records that show and explain their transactions, prepare annual financial statements, and appoint auditors, subject to exemptions for small companies. Annual returns must be filed with the CAC.
Failure to file annual returns is one of the most common ways Nigerian companies end up in difficulty. The CAC can strike off companies that persistently fail to file, and a struck-off company faces serious legal consequences, including the potential invalidation of contracts entered into during the period of non-compliance. For lending businesses that rely on enforceable loan agreements, that is a meaningful risk.
The CAC’s filing portal provides guidance on annual return requirements, and the process has become more accessible with the Commission’s move toward online services. There is no reasonable excuse for allowing annual returns to lapse, but it happens frequently enough that it is worth treating as a standing operational priority rather than something to address reactively. You can find the CAC’s filing guidance at cac.gov.ng/annual-returns.
Insolvency and business rescue
CAMA 2020 introduced modern insolvency tools that were not available under the old legislation, including company voluntary arrangements, administration and receivership mechanisms, and business rescue frameworks. These provisions apply when companies face financial distress and are designed to protect creditors and preserve business value where possible.
For lenders, the practical relevance is in understanding how borrower entities might be restructured rather than simply wound up when they cannot meet their obligations. The existence of a formal rescue framework changes the risk calculus on loans to corporate borrowers in distress, and lenders who understand these mechanisms are better positioned to engage constructively in those situations.
Recommended read: Nigeria’s Banks and Other Financial Institutions Act
What this means for your lending business
CAMA compliance is not a box-ticking exercise conducted once at incorporation and then largely ignored. It is an ongoing obligation that affects your legal standing, your relationships with regulators and banking partners, and the enforceability of your business arrangements.
For lenders and credit providers operating in Nigeria, the practical implications cover several areas. Your company’s CAC registration status, directorship records, shareholder registers, and PSC filings should be accurate and current at all times. Annual returns must be filed on schedule. Directors need to understand their personal obligations under the Act, not in a theoretical sense but in terms of the decisions they make day to day. And any entity you lend to or partner with should be verified against CAC records before you commit to a formal relationship.
Regulators will continue to raise the bar on corporate compliance as part of broader governance expectations in Nigeria’s financial sector. The lending businesses that build clean, well-documented corporate foundations now will encounter fewer obstacles when licensing requirements shift, when investors ask harder questions, or when regulatory inspections arrive without much notice.
If you are building or scaling a lending business and want infrastructure that helps you stay on the right side of these requirements, Lendsqr is worth a look. We work with lenders across Nigeria and beyond, and we understand the regulatory environment you are operating in. Start here.
