Like in any other nation, corporate restructuring in Nigeria entails a number of intricate procedures intended to enhance a company’s financial and operational performance. The following are some crucial details about business restructuring in Nigeria:
Legal Framework
Become familiar with the pertinent rules, regulations, and policies that Nigerian corporate restructuring is subject to. The Investments and Securities Act (ISA) 2007 and the Companies and Allied Matters Act (CAMA) 2020 are important pieces of legislation.
Restructuring Types
Recognize the many business restructuring methods, including spin-offs, mergers, acquisitions, demergers, and amalgamations. Each category is subject to different laws and regulations.
Regulation Approvals
Be aware of the necessary regulatory approvals from governmental organizations including the Federal Competition Commission, the Securities and Exchange Commission, the Corporate Affairs Commission, and the Consumer Protection Commission (FCCPC) 2018.
Shareholder Approval
Under the Companies and Allied Matters Act (CAMA) 2020, most company restructurings require the consent of shareholders. For some restructure kinds, special resolutions can be required.
Tax and Financial Considerations
Examine the restructuring’s financial effects, including any potential tax repercussions. To ensure compliance and tax efficiency, seek competent financial and legal assistance.
Due Diligence
Perform a rigorous due diligence procedure to evaluate the companies involved in the restructuring’s financial standing, assets, liabilities, and potential risks.
Employee Rights
Be aware of the rights and protections of employees during a reorganization, including any potential severance benefits, job transfers, and prospective job losses.
Creditor Considerations
Be mindful of creditors’ interests and make sure rules are followed for debt restructuring.
Public Disclosure and Communication
Create a communication plan to tell stakeholders, including workers, shareholders, clients, and suppliers, about the restructuring intentions. Abide by the disclosure guidelines established by regulatory agencies.
Integration and Implementation
Carefully consider how to integrate the various restructuring entities. To get the desired results, implementation must be done effectively.
Post-Restructuring Compliance
After the restructuring is finished, make sure that all legal and regulatory requirements are still being met.
Cultural and organizational challenges
Be ready to address any cultural or organizational issue that may come up throughout the integration process, particularly if there are variations in management methods or corporate cultures.
Work with Professional consultants
Corporate restructuring can be complicated and delicate, so think about working with knowledgeable legal, financial, and tax consultants who are experts in corporate laws and regulations in Nigeria.
Keep in mind that any corporate restructuring in Nigeria will have characteristics that will depend on the sector, the size of the companies involved, and other particulars. To ensure a seamless process navigation and compliance with Nigerian laws and regulations, always seek professional advice from a lawyer.
- About the Author
- Ekemini is a Lawyer with Kalapanzy Partners “KpLaw” LLP. He is a member of the firm’s Corporate Commercial Team.