The Corporate Affairs Commission (CAC) has concluded plans to remove over 100,000 registered companies from its database. This will come as a consequence for organizations that failed to live up to the requirements of registered companies. This was revealed by the Registrar-General and Chief Executive of the commission, Alhaji Garba Abubakar during a training.
The Chief Executive, during the training on the ‘Use of the Beneficial Ownership Register,’ confirmed that 100,000 companies that have failed to file annual returns in the last 10 years should be ready to come under fire.
In addition to this, he said a notice would be dispersed to affected companies before the action in accordance with section 692 of the Companies and Allied Matters Act, 2020. He advised that the deregistering might be stopped if organizations with outstanding annual return debts paid up before being removed from the database. According to him, after the annual returns have been paid, the court would reenlist such companies as required by law.
The Registrar-General established that Africa’s first Beneficial Ownership Register, developed by the CAC with the backing and assistance of the World Bank, would go a long way towards combating corruption, money laundering, and terrorism financing. He said investigating agencies, legal practitioners, journalists, and civil society organizations should utilize the Broker of Record in discharging their responsibilities.
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Organizations in Nigeria
Organizations registered in Nigeria under CAC have some obligations to fulfil to the commission. There are dues to be paid annually and reports to be submitted. However, the commission can cancel a company from its database if such a company fails to meet its requirements.
Some factors which can influence organizations not meeting up with CAC’s annual return include Corporate registers not being maintained, not paying taxes, neglect of relevant remittances, and so on. Except for a single shareholder corporation, all companies are required to file yearly returns in addition to the audited financial statements accounts within 42 days after the Annual General Meeting (AGM).
When a company is unable to fulfil its annual revenue targets, something has gone wrong somewhere. Some elements in place, such as management changes, competition, and unsustainable practices, as well as a lack of a stable framework, may have contributed to this. However, overcoming the above factors will demand organizations to find their peculiar ways of operating to achieve their goals. This involves redefining their missions, setting goals, and establishing clear communication and accountability.
The Corporate affairs commission
Corporate Affairs Commission was established by the Corporations and Allied Matters Act of 1990. It was set up to monitor the formation, incorporation, and dissolution of companies. It was also charged with these duties in order to ensure that organizations conform to and comply with codes of practice.
The Central Bank of Nigeria (CBN) issued a directive last year, requiring all firms that opened bank accounts without a registration certificate to regularize their accounts or risk having their accounts taken down pending regularization.
Without registering with the CAC, an artificial person cannot open an account in Nigeria. When a company is registered with the CAC, it can open a valid business account with the company’s name, which in turn increases the client’s confidence in the company’s ability. After registration, a certificate of incorporation is issued proving that the business has been registered.
When a business name is registered with CAC, it becomes a separate legal entity. This means that the company is legally recognized. The law considers the incorporated company or business to be a separate entity that is independent of the members or persons who run it.
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