Blog

Navigating Corporate Decisions in Nigerian Companies Limited by Shares Under CAMA 2020.

aeolawpractice

The Companies and Allied Matters Act 2020 “CAMA 2020” provides a modern and comprehensive framework for regulating corporate governance and decision-making in companies limited by shares. It classifies companies limited by shares into small companies,1 companies other than small companies, large companies, and public companies,2 each with distinct legal obligations regarding share capital, governance thresholds, and secretarial appointments. This article examines how these classifications influence corporate governance and decision-making through general and board meetings, supported by statutory provisions.

1. Governance Categories Under CAMA 2020

CAMA 2020 differentiates companies primarily by financial size and corporate structure. Private companies with share capital must have a minimum issued share capital of ₦100,000, while public companies must maintain ₦2,000,000 at a minimum3.

A small company is defined as a private company with a turnover of not more than ₦120 million and net assets not exceeding ₦60 million, with at least one director and one shareholder4, and no mandatory requirement for a company secretary4b.

Companies exceeding these thresholds fall into the category of companies other than small companies, and are expected to appoint at least two directors and one shareholder. While a company secretary is not mandatory, many appoint one for procedural efficiency. Large companies often possess a minimum share capital of ₦300 million or more, especially in regulated sectors, and typically maintain secretarial and compliance functions.

Public companies, by contrast, are mandated to have at least two directors and two shareholders, and are required to appoint a qualified company secretary5. Though the statutory minimum issued share capital is ₦2,000,000, listing rules by the Nigerian Exchange Group (NGX) often require ₦300 million or more in paid-up capital, depending on the sector.

2. Decision-Making Through General Meetings

Under CAMA 2020, decision-making through board meetings—BMs, general meetings—Annual General Meetings, “AGMs” and Extraordinary General Meeting, “EGMs”—is central to corporate governance. Shareholders exercise control via ordinary and special resolutions at general meetings whilst the board of directors make decisions about the daily operations of the company and choice of the company’s management staff /board officers through board resolutions at board meetings.

Ordinary Resolutions

Pursuant to Section 238 of CAMA 2020, ordinary resolutions are passed by a simple majority of members present or represented by proxy at AGMs(EGMs), and are used to address matters classified as ordinary business, such as the appointment/removal of auditors, declaration of dividends, election or removal of directors (as permitted under s288 CAMA), presentation of financial statements, disclosure of managers’ remuneration, fixing of auditors’ fees, and constitution of audit committees—particularly in public companies and some large private ones.

Importantly, audited financial statements do not require shareholder approval at the AGM. They are only required to be “laid before” shareholders—meaning presented for discussion after prior circulation—without any need for a formal vote6.

For instance, a small company with a turnover of ₦80 million may dispense with holding AGMs entirely, provided it opts out in its Articles and meets statutory criteria7. The single shareholder/sole director may pass written resolutions instead, in line with the flexible governance model for small companies8.

In medium-sized private companies with ₦250 million turnover—ordinary resolutions may be used at AGMs to approve budgets and appoint auditors. Such companies often require a company secretary to aid compliance.

Large companies, with turnover exceeding ₦1 billion, use AGMs to resolve issues bordering on director remuneration or strategic decisions, often following formal compliance procedures.

Public companies are obligated to hold AGMs and statutory meetings9. They use ordinary resolutions transacted under ordinary business to, for instance, reappoint auditors or approve dividend declarations10.

Special Resolutions

Special resolutions require at least 75% of votes cast by members present or by proxy to effect significant structural changes in companies limited by shares of all classes. These typically arise at EGMs, but may also occur during AGMs for matters outside the scope of ordinary business. Special resolutions are required to alter the Articles11, change the company’s name12, increase or reduce share capital13, for voluntary winding up14 and resolve any issue not categorized as “ordinary business”.

All ordinary and special resolutions must be filed with the Corporate Affairs Commission (CAC) within 15 days15.

However, for private companies, Section 21(2) of CAMA stipulates that assets sale valued over 50% of total company assets require unanimous shareholder consent16. While for public companies, such actions usually require special resolutions—particularly for capital restructurings or rights issues.

3. Decision-Making at the Board Level

While shareholders at general meetings decide on strategic matters, directors manage day-to-day business through board resolutions, guided by the company’s Articles and CAMA 2020 provisions.

In small companies, board decision-making is often informal. For example, a startup with one director may adopt written resolutions to appoint bankers and signatories to the company’s bank account or enter contracts17.

Larger companies typically hold formal board meetings, where multiple directors deliberate and pass board resolutions on matters such as capital expenditure (which will be finally brought before shareholders at general meetings under special business, requiring special resolution), enter contracts, or appoint board officers and management staff.

Public and large companies adopt structured governance. A multinational oil company also requires at the first phase a board resolution to authorize acquisitions or long-term investments before finally transacting it under special business in a general meeting. Board resolutions—including written ones—are also required to change authorized signatories of bank accounts, in compliance with CAMA18.

4. Compliance and Record-Keeping Obligations

CAMA mandates that all minutes of board, and general meetings be properly documented whilst resolutions passed at general meetings are to be filed with the CAC. Board actions may be executed by any director, secretary, or manager—or solely by the director in one-person companies19. While directors are responsible for preparing financial statements and preparing directors’ report, section 405(1), requires the CEO and CFO to verify and certify the accuracy of the financial statements. These are laid before shareholders for review not approval—as approval lies with the board of directors at the AGM, pursuant to Section 386(4).

Public companies must also constitute a Statutory Audit Committee, comprising three shareholder representatives and two director representatives20. This committee reviews but does not approve financial statements; that responsibility lies solely with the board.

5. Risks of Sole Directorship and Shareholding

While CAMA 2020 permits sole directorship/shareholding for small companies, this structure comes with governance risks:

  • Concentration of power, leading to limited oversight
  • Reduced innovation due to a lack of diverse perspectives
  • Greater exposure to risk through unchecked decisions
  • Succession planning gaps in the event of incapacity
  • Difficulty in raising capital, as investors view such setups as risky

It is therefore important for small companies to balance flexibility with accountability by incorporating diverse viewpoints and strong governance practices by setting up an advisory board.

Conclusion

CAMA 2020 enables flexible yet robust governance frameworks aligned with company size and complexity. While small companies enjoy simplified procedures, larger and public companies are held to stricter standards. Understanding and applying CAMA’s decision-making provisions—referred to as resolutions, board structures, or compliance protocols—ensures both strategic efficiency and legal conformity in Nigeria’s dynamic corporate environment.

Endnotes

  1. Companies and Allied Matters Act 2020 (CAMA 2020), s 22(1),(3),&(4)
  2. Ibid, s 24
  3. ibid, s 271(1).
  4. ibid, s394(3a-f) & s330.
  5. ibid, s 332.  
  6. Ibid, s388(1).
  7. CAMA 2020, s237(1).
  8. ibid, s259 & s289(8).
  9. ibid, (n7).
  10. Ibid, s238
  11. ibid.
  12. ibid.
  13. Ibid.
  14. Ibid, s262(4d)
  15. Ibid s237(4) & 262(1)(4b).
  16. Ibid, s262(4c).
  17. Ibid, s289(8). However for a board to pass valid board resolutions aside from written resolutions s 292(2) requires 14 days notice in writing to all directors entitled to receive notice of the directors meetings.
  18. ibid.
  19. Ibid s286
  20. Ibid s404(3)

Written by Adeola Osifeko LLB, BL,LLM,ACIS, ABR, Principal Partner at AEO Law Practice. You can contact her on adeola@aeolawpractice.com

Complying with the Companies & Allied Matters Act 2020 and the Tax Reform Acts 2025: Governance, Administration, and Benefits for Nigerian MSMEs

aeolawpractice

The Companies and Allied Matters Act 2020 (CAMA 2020) and the Tax Reform Acts 2025 (collectively referred to as “the Reformed Acts”), which take effect from 1 January 2026, represent a landmark shift in Nigeria’s regulatory framework for businesses—especially Micro, Small, and Medium Enterprises (MSMEs), classified in law as “small companies.” These laws combined aim to streamline corporate governance, modernise tax administration, and provide targeted incentives that foster growth and formal participation in the economy. This article traces how small companies can align with these compliance requirements to improve operational efficiency, and unlock long-term benefits.

Defining Small Companies under the Reformed Acts

CAMA 2020 introduces a clear classification system for private companies, with “small companies” defined by specific financial and ownership criteria. A business qualifies as small if its annual turnover does not exceed ₦120 million, its net assets are below ₦60 million, it has no foreign or governmental shareholders, and, where applicable, the directors between themselves hold at least 51% of its equity share capital¹. This classification confers a range of corporate governance reliefs, such as exemption from appointing a company secretary or formally holding annual general meetings.

Complementing this, the Nigeria Tax Act 2025 offers a fiscal definition for small companies: those with annual turnover below ₦100 million are exempt from key taxes, including Companies Income Tax (CIT), Capital Gains Tax (CGT), and the development levy. This threshold—an increase from the ₦25 million turnover cap under the Finance Act 2023—broadens access to tax relief and encourages smaller businesses to formalise their operations.

While the corporate and tax classifications differ, they serve complementary purposes. CAMA governs internal governance and legal status, while the Finance Act 2023 and Reformed Acts define fiscal obligations. For MSMEs to maximise regulatory benefits, a comprehensive understanding of both is essential.

Easing Governance through CAMA 2020

One of the most impactful features of CAMA 2020 is the governance flexibility it affords small companies. It permits incorporation with a single director, effectively bridging the benefits of sole proprietorship with the protection of a separate legal entity². The appointment of a company secretary is optional³, and small companies are exempt from formally holding annual general meetings, provided decisions are properly recorded in written resolutions⁴ or conducted virtually⁴B.

To fully utilise these flexibilities, small companies should align their Articles of Association with the updated provisions. This allows founders to concentrate on core business activities while remaining compliant with statutory governance obligations.

Corporate Administration and Digital Filings

CAMA 2020 also modernises corporate administration by mandating timely filings with the Corporate Affairs Commission (CAC). Resolutions related to any change in corporate information such as directorship, shareholding, or share capital must be filed within 14 days⁵. The Act affirms the legal validity of electronic documents⁶, allowing businesses to handle compliance via the CAC’s online portal (www.icrp.cac.gov.ng).

Failure to meet filing deadlines may result in daily penalties and could impair a company’s legal standing during the period of non-compliance⁷. Small businesses lacking internal capacity may find value in engaging professional services to ensure timely and accurate filings, thereby preserving transparency and enforceability of contracts.

Financial Record-Keeping: Bridging Compliance and Strategy

Although small companies are not required to file audited financial statements⁸, they must maintain accurate and up-to-date accounting records under Section 374(3)(a)(b) CAMA 2020. These records—which should include income, expenditure, assets, and liabilities—are essential for preparing annual returns and meeting tax obligations such as applying for tax clearance under the current Finance Act 2023 and the upcoming Nigerian Tax Act 2025.

Under current law, the Finance Act 2023 exempts companies with turnover below ₦25 million from several taxes⁹. From 1 January 2026, the Tax Reform Acts 2025 will extend these exemptions and introduce a unified tax regime, including exemption from remitting 4% development levy on assessable profits (replacing multiple fragmented levies) and deployment of digital tools for regulatory compliance and monitoring¹⁰.

Businesses should adopt digital bookkeeping tools such as QuickBooks or Zoho Books to track financial performance. Records must be retained for a minimum of six years¹¹, and periodic turnover assessments are necessary to confirm continued eligibility for small company benefits¹². Where needed, professional accountants can assist in aligning internal practices with evolving regulations¹³.

Strategic Gains from the Tax Reform Acts 2025

The Tax Reform Acts 2025—comprising the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and Joint Revenue Board Establishment Act—introduce a simplified, tech-driven tax regime tailored to the needs of small companies. These reforms officially define a small company as one with annual turnover not exceeding ₦100 million and fixed assets below ₦250 million¹⁴.

While businesses with turnover under ₦25 million continue to enjoy full tax exemptions, others falling within the revised ₦100 million threshold also benefit from reduced liabilities and streamlined compliance procedures. The Nigeria Revenue Service Act facilitates a fully digital tax administration system, promoting e-filing, real-time reporting, and reduced bureaucracy¹⁵.

Furthermore, the Nigeria Tax Act 2025 exempts exports—whether in goods, services, or intellectual property—from VAT, bolstering the competitiveness of Nigerian small companies in regional and global markets¹⁶. Additional incentives are directed at priority sectors such as agriculture, manufacturing, and technology¹⁷.

To ensure fairness and resolve disputes efficiently, the Joint Revenue Board Establishment Act introduces mechanisms like a Tax Ombudsman and Tax Appeal Tribunal. These bodies provide accessible channels for addressing taxpayer grievances and investigating misconduct, thereby promoting accountability and taxpayer confidence¹⁸.

Transforming Compliance into Strategic Value

Regulatory compliance, when approached strategically, can yield competitive advantages. Accurate financial records allow small businesses to identify cost efficiencies, assess profitability, and make informed decisions. Transparent governance and proper filings enhance credibility with investors, lenders, and partners¹⁹.

Moreover, correct application of tax exemptions and incentives directly translates to lower operating costs and higher reinvestment capacity in innovation and growth. Export-focused businesses, in particular, stand to benefit from VAT exemptions and improved digital tax systems that support cross-border trade and scalability.

To realise these benefits, small companies should routinely evaluate their compliance status, analyse financial data for insights, and stay informed about legal updates via official portals or professional advisors. These actions ensure readiness to adapt as the regulatory landscape evolves.

Conclusion

The combined framework of CAMA 2020 and the Tax Reform Acts 2025 offers Nigerian MSMEs an unprecedented opportunity to simplify governance, minimise tax liabilities, and optimise operations. With these reforms taking effect from 1 January 2026, small companies are well positioned to benefit from reduced administrative burdens and improved access to capital, markets, and incentives.

By adopting digital tools, aligning governance structures with the law, and seeking expert guidance where necessary, small businesses will not only remain compliant but also scale effectively in emerging markets—particularly under initiatives like the African Continental Free Trade Area (AfCFTA). The key to unlocking these benefits lies in proactive engagement with the reforms and a commitment to transparent, data-driven business management.

Endnotes.

  1. CAMA 2020, s 394(3)
  2. CAMA 2020, ss 271(1), 18 respectively.
  3. Ibid, s 330(1).
  4. Ibid, s 238, 4b. Ibid, s 240.
  5. Ibid, ss 295, 336.
  6. Ibid, s 860.
  7. Ibid, ss 245(6),862.
  8. Ibid, s 402(1)(b).
  9. Finance Act 2023, s5. Section 5 of the Finance Act 2023 affirms the definition of small company in Section 105 Company Income Tax Act which states that, a small company is one that has a gross turnover of N25,000,000 or less in a year of assessment. Under Section 23(1)(o) of the CITA, the profits of a small company, as defined in Section 105, are exempt from companies income tax if the gross turnover does not exceed N25 million in a year of assessment. Also, see NTA 2025 s 56(2).
  10. NTA 2025, s 158(2): Nigeria Tax Administration Act 2025, cls 7–9, 23
  11. CAMA 2020, s377
  12. Ibid, s 394
  13. NTA 2025 (n10)
  14. Ibid, s 56
  15. Nigeria Revenue Service Act 2025, s 3.
  16. NTA, s186
  17. NTA, s 166, Tenth Schedule.
  18. Joint Revenue Board Establishment Act 2025, s 41
  19. CAMA 2020, s425

Written by Adeola Osifeko LLB,BL,LLM,ACIS,ABR Principal Partner at AEO Law Practice.

Nigeria’s 2025 Tax Reforms: What Technology, Life Sciences & Media Businesses Need to Know.

aeolawpractice

On June 26, 2025, President Bola Ahmed Tinubu signed into law four significant tax reform bills collectively referred to as “the Reform Acts.” The first, the Nigeria Tax Act (NTA) also called the Ease of Doing Business Act seeks to streamline the country’s previously fragmented tax regulations. Complementing this is the Nigeria Tax Administration Act (NTAA), which seeks to harmonize legal and operational procedures for tax administration across all levels of government: federal, state, and local. The third, the Nigeria Revenue Service Act (NRSA), replaces the existing Federal Inland Revenue Service Act and establishes a more autonomous, performance-driven national tax authority called the Nigerian Revenue Service. Lastly, the Joint Revenue Board Act (JRBA) creates a formal governance structure to improve coordination and cooperation among tax authorities nationwide. These reforms represent one of the most extensive restructurings of Nigeria’s tax system in decades and are set to take effect on January 1, 2026.

The reforms are designed to streamline compliance, promote fairness, and boost revenue collection, while fostering economic growth. At the same time, these new laws signal the beginning of a more complex regulatory environment—marked by increased scrutiny and the need for strategic adjustments by businesses operating in Nigeria. Here’s what technology, fintechs, healthtechs/life sciences & media/creative arts entrepreneurs and business owners should know.

Consolidation, Repeal, and Update of Nigeria’s Tax Laws

As part of the broader goals of the Nigerian Tax Reforms, the NTA consolidates key fiscal laws into one cohesive framework. It repeals and integrates the core provisions of several major tax statutes, including the Capital Gains Tax Act, Companies Income Tax Act, Personal Income Tax Act, Stamp Duties Act, and Value Added Tax Act. Additionally, it introduces amendments to other important laws such as the Petroleum Industry Act and the Tertiary Education Trust Fund (Establishment, etc.) Act. One notable change is the revocation of the 2021 VAT (Modification) Order. The overarching aim is to simplify Nigeria’s tax landscape, reduce redundancies, and promote clarity for businesses navigating the tax environment.

Creation and Role of the Nigeria Revenue Service (NRS)

A significant institutional shift introduced by the reforms is the replacement of the Federal Inland Revenue Service (FIRS) with a newly established Nigeria Revenue Service (NRS). This development, formalized through the NRSA, marks the beginning of a more autonomous and efficiency-driven tax authority. The NRS not only assumes responsibility for tax collection but is also tasked with overseeing the administration of non-tax revenue. The agency is expected to introduce a standardized legal and administrative approach across the country to ensure consistency and improve compliance in revenue collection.

The New Tax Landscape for Businesses

For businesses, several changes will reshape how taxes are paid and managed. A key update is the introduction of a tax on profits from foreign subsidiaries that could have been paid out as dividends but weren’t, affecting Nigerian companies with overseas operations.

Another major shift involves Value Added Tax (VAT). While the rate remains unchanged at 7.5%, the rules around recovery of VAT have been expanded. Businesses can now recover VAT on all purchases, including services and fixed assets, as long as they relate to taxable sales. This reduces costs for businesses offering respite for many companies by lowering overall operating costs.

Additionally, certain essential items i.e goods and services such as basic food, medical products, educational materials, electricity, and non-oil/gas exports are now zero-rated for VAT, meaning businesses selling these can recover VAT costs, improving cash flow and cost savings.

What Individuals and Employers Should Watch

On the individual side, the government has toughened penalties for tax non-compliance. Failing to file tax returns now comes with steeper penalties- ₦100,000 for the first month rising to ₦530,000 in the second month. This puts pressure on both individuals and businesses to meet deadlines and maintain accurate records.

To make dispute resolution easier, a new Tax Ombuds Office has been established. This independent body will help resolve issues between taxpayers and the tax authorities, providing a more accessible avenue for raising concerns and ensuring fairness in enforcement.

Restructuring and Strategic Planning

Companies considering restructuring or expansion—especially those with international operations—should revisit their tax strategy. The new Controlled Foreign Company rules mean that previously untaxed profits abroad may now trigger tax in Nigeria. Businesses with foreign subsidiaries should evaluate how the new tax on undistributed profits impacts financial planning and corporate structure

Additionally, businesses should take advantage of VAT recovery or zero-rated items and review supply chains for compliance.

Administrative Changes and Compliance

The tax administration system is also undergoing structural reform. The Federal Inland Revenue Service (FIRS) has been renamed the Nigeria Revenue Service (NRS), reflecting its enhanced role. Meanwhile, state-level tax agencies are now autonomous, allowing for improved local tax collection and coordination.

The VAT revenue-sharing model has also shifted. The federal government will now receive 10% of VAT revenue, down from 12%, while states will receive 55% and local governments 35%. These adjustments are designed to strengthen local governance and, potentially, improve infrastructure and services that benefit businesses.

A particularly impactful update is the requirement for all businesses to adopt electronic invoicing. This measure is part of a broader push for transparency and digital compliance. To remain compliant, companies will need to update their accounting systems and ensure they meet the new digital standards.

Industry-Specific Impacts

In the financial services sector, the expanded VAT recovery rules are especially beneficial. Banks, insurance firms, and fintech startups can now claim back VAT on purchases that support taxable services, helping reduce overall costs. However, compliance is more critical than ever, with steep penalties for missed filings. The Tax Ombuds Office could prove particularly useful for resolving disputes in this highly regulated industry.

For life sciences and healthcare, the reforms bring immediate cost relief. Medical goods and pharmaceutical products are now zero-rated for VAT, allowing businesses to recover input VAT and make healthcare more affordable. It’s vital for companies in this space to update their tax processes to take full advantage of the changes.

Technology and media companies also stand to benefit. Many digital exports are now zero-rated for VAT, which supports firms serving international markets. The mandatory adoption of e-invoicing aligns well with tech operations but still requires system upgrades and staff training to stay compliant.

Taking Action: What Businesses Should Do Next.

To navigate these changes effectively, businesses should begin by aligning their leadership, operations, and finance teams around a shared understanding of the implications. Key steps include:

  1. Conducting training sessions and strategic reviews to stay current with the evolving tax landscape. It’s also essential to assess the impact on your company’s structure, supply chains, and financial arrangements.
  2. Updating the tax strategy to take advantage of opportunities such as VAT recovery.At the same time, enhance compliance by modernizing accounting systems—especially for electronic invoicing—to meet new reporting and regulatory requirements.
  3. Embracing technology as a critical enabler. Use tools that not only comply with current regulations but are also adaptable to future changes. A robust tax risk management framework will help identify both compliance gaps and potential efficiencies.

Finally, businesses should stay actively informed. Monitor government updates, tax circulars, and implementation guidelines regularly. While the Tax Ombud’s Office provides support, early engagement and proactive compliance remain the most effective ways to minimize both risk and cost.

Final Thoughts

Nigeria’s new tax laws mark a bold step toward modernising the country’s tax system. They create both challenges and opportunities for businesses. Those that take the time to understand the changes, update their systems, and plan ahead will be well positioned to thrive in the new environment commencing in six months time.

Author

Adeola Osifeko LLB,LLM,ACIS,ABR, Principal Partner. She can be reached on adeola@aeolawpractice.com

Commoditisation of Legal Services in Nigeria: A Collaborative Regulatory Approach under the Rules of Professional Conduct for Legal Practitioners 2023.

aeolawpractice

In March, we examined whether the Legal Practitioners Remuneration Order 2023 would strengthen or strain Nigeria’s legal industry and concluded that it could be both — a potential game-changer or a troubling constraint — depending on implementation, adaptation, and innovation within the profession.

Now, another fundamental shift looms on the horizon — the commoditisation of legal services — a process powered almost entirely by artificial intelligence (AI) and digital transformation. This development raises significant ethical and regulatory questions, especially concerning the increasing involvement of non-lawyers in delivering legal services. The core issue is not whether commoditisation should occur, but how it should be effectively regulated to balance innovation and professional ethics.1.

The Reality of Commoditisation

Commoditisation, in this context, refers to the packaging of legal services as accessible products, often supported by artificial intelligence (AI). These technologies, including large language models (LLMs), are increasingly capable of performing tasks such as reviewing and redlining contracts and commercial agreements; drafting legal documents including pleadings and opinions; simulating legal reasoning using expansive databases.2 Although these tools improve efficiency and access, many are developed and deployed by non-lawyers operating outside traditional regulatory structures. Some technology firms providing “legal tech” service do not have lawyers in board and management roles, raising questions about compliance with legal ethics. Without oversight, such innovations risk violating professional standards and threatening client protection.

Legal and Ethical Challenges under the RPC 2023.

The Rules of Professional Conduct 2023 (RPC 2023) outlines clear ethical standards regarding the delivery of legal services, particularly in relation to non-lawyers:

(i) Rule 3 prohibits lawyers from aiding or abetting the unauthorized practice of law and from sharing legal fees with non-lawyers, except under specific conditions prescribed in Rule 53.3

(ii) Rule 4 prohibits intermediary agencies from intervening in the relationship between lawyer and client.

(iii) Rule 5 forbids lawyers from forming partnerships with non-lawyers for the purpose of practicing law and prohibits the operation of law firms as corporate entities.

(iv) Rule 19 mandates strict adherence to client confidentiality—standards that many unregulated tech platforms may fail to meet.

(v) Rule 74 classifies unauthorized legal practice as professional misconduct, warranting disciplinary action.

These provisions demonstrate that unauthorized legal services by non-lawyers carry serious risks, including breaches of confidentiality, inadequate legal advice, and conflict of interest (notably under Rule 17). Nonetheless, a blanket prohibition could stifle technological innovation that has the potential to enhance access to justice.

Why Collaboration Is Preferable to Prohibition4

Given the rapid global expansion of alternative legal service providers (ALSPs), as documented by Gartner, and the entry of major firms like KPMG into the legal services market with initiatives such as KPMG Law US on 27 February 2025, prohibiting non-lawyers from offering commoditised legal services appears increasingly impractical. These developments reflect a broader shift toward technology-enabled, cost-efficient legal solutions that challenge traditional delivery models. Rather than resisting this evolution, the legal profession in Nigeria must focus on regulatory integration—ensuring such innovations operate within an ethical framework. This approach aligns with Rule 1 RCP 2023 which charges lawyers with promoting justice—a mandate that includes leveraging legal technology to expand access to legal services.

Collaboration with non-lawyer providers offers tangible benefits:

(i) Market Integration: By regulating these services, the Nigerian Bar Association (NBA) can limit the impact of unregulated foreign platforms.

(ii) Client Protection: Oversight enables compliance with ethical obligations, such as confidentiality (Rule 19) and due diligence (Rules 61–69).

(iii) Innovation: Lawyers can take the lead in developing and supervising legal technology, consistent with the continuing professional development (CPD) goals set out in Rule 11.

Strategic Regulatory Approaches for the NBA

To manage commoditisation effectively, the NBA—empowered by its self-regulatory authority under Rule 73—can adopt the following strategies:

1. Legal Tech Licensing Framework

The NBA could establish a licensing regime, possibly through the Nigerian Bar Association Anti-Money Laundering Committee (NBAAMLC) or a dedicated Legal Tech Committee. This framework would:

(i) Require non-lawyer providers to register and operate under the supervision of licensed legal practitioners (Rules 3, 4);

(ii) Limit non-lawyers to non-contentious tasks, preserving complex legal advisory roles for qualified practitioners (Rule 16);

(iii) Enforce client confidentiality obligations (Rule 19) and compliance with anti-money laundering (AML) rules (Rules 57–60).

This approach enables controlled innovation while safeguarding ethical delivery.

2. Partnerships Between Law Firms and Tech Providers

Encouraging partnerships between law firms and tech developers, within the boundaries of Rule 5, would integrate innovation into regulated structures. This could involve:

(i) Registering NBA-approved law firms for such collaborations;

(ii) Mandating lawyer validation of legal outputs for accuracy (Rule 15);

(iii) Offering CPD credits to incentivise participation (Rule 11).

Such oversight ensures legal compliance while leveraging technological capacity.

3. Regulatory Sandbox for Legal Tech

The NBA could create a “sandbox” environment to pilot legal tech innovations under supervision, using risk-based models outlined in Rules 61–68. Features would include:

(i) Conditional testing with safeguards on data protection (Rule 19) and beneficial ownership disclosure (Rule 69);

(ii) Mandatory compliance reporting and risk assessments (Rule 66);

(iii) Transition plans for successful tools to achieve full licensing.

This would allow experimentation without compromising legal integrity.

4. Training and Certification for Non-Lawyer Providers

The NBA may also deliver training on RPC 2023 obligations to non-lawyers, certifying them as compliant under a supervised framework. Programs could cover:

(i) Legal ethics and confidentiality (Rule 19);

(ii) AML compliance (Rules 57–60);

(iii) General professional standards, qualifying as CPD under Rule 11.

Certified entities could be listed as “NBA-approved legal tech providers,” reducing misconduct risks through education.

5. Public Awareness and Enforcement

The NBA should initiate campaigns to educate clients on the dangers of using unregulated platforms. This would involve:

(i) Publishing lists distinguishing regulated and unregulated services (Rule 39);

(ii)Mandating certified providers to display NBA seals;

(iii) Investigating and disciplining unauthorized practice through the NBAAMLC (Rule 74(2)).

This approach promotes public trust and incentivises compliance by non-lawyer providers.

6. Legislative Advocacy

Finally, the NBA may advocate for amendments to the Legal Practitioners Act to provide statutory authority over legal tech. Drawing from Rule 76, these amendments could define “legal services” within the context of commoditisation; establish a legal tech regulatory agency under NBA oversight; align statutory requirements with AML/CFT obligations (Rules 57–71). This would establish a legal foundation for regulating technology-driven legal services.

Empowering Lawyers through Legal Technology

Lawyers themselves must be equipped to thrive in a digital legal environment. The RPC 2023 encourages legal professionals to engage in ongoing training (Rule 11), including modules on legal tech and AI which the NBA Section in Legal Practice is currently promoting. Law firms that embrace innovation will be better positioned to offer compliant services, reducing the influence of unregulated providers.

Future Considerations

As emerging technologies—such as neurotechnology( brain-computer interfaces) continue to evolve, the legal profession must anticipate and adapt to new challenges. The RPC 2023’s emphasis on ethical behaviour (Rule 1) and risk-based practice management (Rules 61–69) offers a dynamic foundation for responding to technological disruption.

Conclusion

The commoditisation of legal services by non-lawyers presents a dual challenge: fostering innovation while safeguarding ethical standards. Rather than enforcing outright prohibition, the RPC 2023 offers a comprehensive regulatory framework—anchored in Rules 3, 4, 5, 19, 57–73, and 74—to integrate non-lawyer providers into a regulated ecosystem.

By implementing strategies such as licensing, partnerships, sandboxes, training, and legislative reform, the NBA can uphold professional integrity while expanding access to justice. Ultimately, the future of legal services in Nigeria rests on lawyers leading this transformation, with the NBA serving as a steward of ethical innovation.

Written by Adeola Osifeko,LLB, LLM, ACIS, ABR, Principal Partner AEO Law Practice. Contact her on adeola@aeolawpractice.com.

Endnotes

  1. The Rules of Professional Conduct for Legal Practitioners 2023 (RPC 2023), issued under the authority of the Legal Practitioners Act (Cap L11, Laws of the Federation of Nigeria 2004), offers a structured framework to manage this challenge.
  2. Russ Alan Prince, ‘How Law Firms Can Overcome the Commoditization Crisis in Legal Services’ (Forbes, 28 November 2017) https://www.forbes.com/sites/russalanprince/2017/11/28/how-law-firms-can-overcome-the-commoditization-crisis-in-legal-services/ Accessed 3 July 2025.
  3. Under Rules of Professional Conduct for Legal Practitioners, 2023, Rule 53, provides that a lawyer may share legal fees with non-lawyers in three specific cases: (a) agreements with a lawyer’s firm, partner, or association for payments to their estate post-death; (b) compensation for completing a deceased lawyer’s unfinished legal work; and (c) including non-lawyer employees in a firm’s profit-sharing retirement plan.
  4. Gartner, Alternative Legal Service Providers (ALSPs) Market Reviews (Gartner, 2025) https://www.gartner.com/reviews/market/alternative-legal-service-providers-alsps accessed 5 July 2025 : KPMG, ‘KPMG LLP Launches KPMG Law US’ (KPMG, 2 May 2024) https://kpmg.com/us/en/media/news/kpmg-llp-launches-kpmg-law-us.html accessed 5 July 2025.

Strategic Insights from NBA Lagos Annual Law Conference Policy Dialogues – Takeaways for Legal Tech Startups.

aeolawpractice

LegalTech in Nigeria stands at a pivotal inflection point. The 2025 NBA Lagos Annual Law Conference underscored the legal sector’s growing recognition of its structural inefficiencies and its readiness to embrace technology-driven reforms. Coupled with broader macroeconomic shifts—such as foreign exchange reforms and the Central Bank of Nigeria’s banking recapitalization directive—the Nigerian legal landscape now presents a ripe environment for LegalTech innovation.

Opportunities abound in areas such as automating regulatory compliance, improving judicial efficiency, streamlining dispute resolution through ADR platforms, and enhancing accountability across legal institutions. Legal tech startups can align their solutions with these reform trends and engage key stakeholders so that they can be instrumental in shaping the future of legal services in Nigeria.

The regulatory clinic and policy dialogue sessions at the law conference offered actionable insights which can be utilised by legal tech startups, with focus on market entry and exit strategies, investment opportunities, regulatory compliance, risk mitigation, innovation, and stakeholder engagement.

Key Opportunities for Legal Tech Startups

1. Market Entry & Exit

(i) Foreign Exchange Reforms:
The CBN’s 2024 FX reforms have curbed capital flight and increased investor confidence. This creates fertile ground for legal tech platforms that facilitate cross-border compliance and transaction management. However, inflation and investment volatility call for solutions that also address domestic market stability.

(ii) Judicial Reform Momentum:
The Lagos Judiciary’s acceleration of litigation timelines and push for wider adoption of ADR—estimated to cover 70% of commercial disputes—signals a strong demand for platforms enabling digital mediation, automated case management, and online dispute resolution.

(iii) Regulatory Clinic Insights:
The presence of regulatory bodies like the Corporate Affairs Commission, Federal Competition & Consumer Protection Commission, and the Lagos State Lands Bureau highlights the willingness of regulators to interact with the legal and business communities. It also depicts market need for legal tech tools that simplify licensing and compliance processes for professionals and businesses. So much for the pivotal step CAC recently made with the launch of a new artificial intelligence registration portal, which will significantly ease the process of formalising businesses in Nigeria.

2. Investment Opportunities

(i) Equity-Driven Funding Landscape:
The shift toward equity investments over debt opens a niche for platforms that support equity crowdfunding, investor matchmaking, and compliance with fundraising regulations—especially for local SMEs and startups.

(ii) Fintech-Legaltech Synergy:
With the CBN pushing for banking sector recapitalization, there is an emerging need for tools managing securitization, asset transfers, and standardized documentation—an attractive space for legal-fintech hybrids.

3. Regulatory Compliance

(i) Chartered Institute of Bankers of Nigeria’s ADR Model:
In 2023, the CIBN resolved 171 non-litigious banking disputes in debt recovery and recovered ₦544 million. This success presents an opportunity for legal tech startups to develop compliance platforms modelled around non-judicial dispute resolution frameworks.

(ii) Standardization Push:
Calls for streamlined judicial documentation and adherence to tighter timelines present opportunities for compliance tech that automates filings, generates court-ready documentation, and tracks procedural obligations.

4. Risk Management

(i) Delays & Documentation Gaps:
Persistent judicial bottlenecks arising from manual processes pose risks to commercial time and transactions. Legal tech can bridge this gap through:

Real-time case tracking: Tools that let lawyers and clients monitor case progress online (e.g., court status dashboards).

Automated alerts: Notifications for hearing dates, filing deadlines, or required documents to prevent procedural errors.

Legal risk analytics: AI tools that assess delays or documentation risks in ongoing cases, helping law firms and investors make informed decisions.

Corruption Safeguards:
Notable the hardtalk dialogue identified most misconduct stems from support staff than judges, therefore ethics tools—such as whistleblowing apps or integrity-monitoring platforms—can enhance transparency across legal and judicial systems.

5. Innovation Trends

(i) Judicial Tech Adoption:
The judiciary’s integration of inverters, digital court recording, and National Judicial Council’s performance tracking shows readiness for tech adoption. Legal tech innovations like LawGPT introduces AI-powered case analysis. We expect more legal tech innovation to provide e-discovery solutions, and analytics dashboards for court systems.

(ii) Digital ADR Platforms:
Given that a majority of commercial disputes are ADR-eligible, there’s significant scope for scalable, cloud-based negotiation and mediation platforms tailored to both private and public sector needs.

6. Stakeholder Influence

(i) Bar-Bench Collaboration:
The judiciary’s call for closer collaboration with the Bar underscores the value of platforms that enhance communication, training, and feedback between lawyers and judges—accelerating efficiency and accountability.

(ii) Financial Sector Alignment:
The involvement of the CBN and financial leaders highlights an appetite for tools that support policy compliance, regulatory reporting, and data analytics—offering legal tech startups the chance to act as strategic partners in financial governance.

Strategic Recommendations for Legal Tech Founders.

  • Market Entry: Prioritize development of ADR tools, judicial automation, and compliance platforms tailored to Nigeria’s ongoing legal reforms.
  • Investment Positioning: Emphasize products that integrate fintech capabilities—like securitization management or equity crowdfunding—to tap into recapitalization-driven investor interest.
  • Compliance Tools: Build solutions that align with CAC, FCCPC, and CIBN frameworks, helping businesses and law firms meet Nigeria’s evolving regulatory standards.
  • Risk & Ethics Tech: Design AI-powered tools for legal risk prediction and transparent reporting mechanisms to address systemic inefficiencies and ethical concerns.
  • Innovative Leadership: Focus on scalable, AI-driven solutions in litigation analytics, e-ADR, and digital court performance monitoring to ride the wave of judicial tech integration.
  • Stakeholder Engagement: Form partnerships with regulators and institutions like the Lagos Judiciary, CBN, and CIBN to co-develop solutions and gain traction in both the legal and financial sectors.

Conclusion
LegalTech in Nigeria is transitioning from nice-to-have to must-have. The alignment of legal, financial, and judicial reforms means startups positioned now will define the future of how law is practiced, regulated, and delivered in Africa’s largest economy. Investors have a unique opportunity to back platforms that don’t just automate law—but reshape it.

Author

Adeola Osifeko LLB,LLM, ACIS, ABR, Principal Partner at AEO Law Practice.