Introduction:
In Nigeria, registering a company with the Corporate Affairs Commission (“CAC”) is only the first step towards building a compliant business. With the CAC rigorously enforcing the provisions of the Companies and Allied Matters Act (CAMA) 2020 and the Corporate Affairs Commission Regulations 2021, companies must prioritise statutory reporting and disclosure obligations to avoid severe penalties and potential business disruptions. In recent times, the CAC has intensified its compliance drive, imposing heavy sanctions on defaulting companies. To ensure uninterrupted operations and mitigate regulatory risks, businesses must remain vigilant and proactive in meeting their obligations. We have outlined some of these key requirements below.
Publication of Names by Companies
Section 729 of CAMA mandates that every company, after incorporation, must display its name and registration number prominently on the outside of all offices or places where it carries on business. In addition, the company’s name and registration number must be stated in legible characters on all business letters, notices, advertisements, and other official publications. Recently, regulators have imposed significant penalties on companies for failing to comply with this requirement under the law.
Beyond CAMA 2020, the CAC Regulations 2021 also prescribe clear timelines and filing obligations for companies, including the requirement to file annual returns each year. Failure to comply with these obligations may result in fines and lead to restrictions on the company’s operations.
Any change in your Company must be communicated and filed at the Corporate Affairs Commission.
As your company grows, change is not only expected but inevitable. Directors may resign, the company may relocate its offices, adopt a new name, or resolve to increase or reduce its share capital. While these actions are entirely permissible, the law requires that they be promptly filed and recorded at the CAC, not only to be valid but to ensure that your company stays compliant.
For instance, Section 127(2) of CAMA mandates that every company notify the CAC of any increase in share capital within fifteen (15) days of passing the resolution. Similarly, the appointment or removal of a director or secretary must be filed within fourteen (14) days of the date of the relevant resolution.
Instructively, timely filings with the CAC would ensure that your company’s statutory records remain current, reduce the risk of disputes, and safeguard your company’s standing under the law.
Notice of Persons of Significant Control (PSC) must be filed and updated
A person of significant control is anyone who directly or indirectly holds at least 5% of a company’s shares or voting rights, has the right to appoint or remove directors, or otherwise exercises dominant influence over the company. Companies must disclose the individuals who exercise significant control or influence over them, whether directly or indirectly.
- Sections 119 & 120 of CAMA 2020 provide that companies must notify CAC of Persons of Significant Control within one month of becoming aware, and companies are to maintain a register of Persons of Significant Control.
Conclusion:
Regulatory compliance promotes accountability, prevents the misuse of corporate structures for illegal purposes, and safeguards the interests of investors. Compliance is not optional; it is a statutory obligation that will save your company a significant amount of money and stress. The earlier you take it seriously, the safer it is for your company.
Please note that this article is for general information only. We do not offer it as advice on any particular matter, whether legal, procedural or otherwise. If you have questions about this article or require our assistance on any regulatory matter under the Companies and Allied Matters Act, 2020, please contact the author, Bolade Ajayi, at bolade.ajayi@abdu-salaamabbasandco.com or our corporate team at info@abdu-salaamabbasandco.com.