Benue State University, Makurdi

Analysis of the Legal Framework on Corporate Insolvency in Nigeria Under CAMA 2020 and Companies Winding up Rules 2001

Okwudiri Nwosu*

Abstract

This article examined some aspects of the Companies and Allied Matters Act 2020 which is the principal legislation regulating corporate insolvency matters in Nigeria. The Act made some provisions that relates to the activities of actors and officers like Official Receiver, Special Manager and Liquidator who participates during winding up proceedings of an insolvent corporate entity. The paper also highlighted the appointment of these officers, restructuring mechanisms of ailing companies under CAMA and winding up procedures, which seems very technical in its operation. It discovered that there are challenges created by some of the CAMA provisions, in dealing with corporate Insolvency. Again, the Companies Winding up Rules (CWR) 2001 which complements the provisions of CAMA, provided enormous technicalities which obviously affects the early rescue of corporate entities undergoing insolvency. Doctrinal research method was adopted in this work. Having analysed the relevant statutory provisions under CAMA and CWR as it relates to corporate insolvency, recommendations were made to amend some of the provisions which would ultimately save businesses instead of extinction of corporate entities arising from insolvency. Court proceedings should not be involved in the cumbersome procedure for effecting arrangement and compromise under CAMA in order to rapidly revive financially distressed insolvent company.

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