CAC Targets Dormant And Shell Companies In Sweeping De-registration Drive
The Corporate Affairs Commission (CAC) has launched an extensive crackdown on dormant and shell companies across Nigeria, deregistering over 300,000 entities since December 2023. The move, described as unprecedented, aims to sanitise the corporate environment, curb illicit activities, and bolster compliance with statutory regulations.
Registrar-General Hussaini Ishaq Magaji (SAN), who is spearheading the initiative, highlighted its significance in addressing issues such as money laundering, tax evasion, and fraudulent financial activities.
“Dormant companies that fail to meet their obligations pose significant risks to the economy and national security,” Magaji stated. “Our decision to deregister non-compliant entities is essential for safeguarding the integrity of Nigeria’s business landscape.”
The de-registration exercise targets companies that have remained inactive for over a decade or failed to file annual returns for at least two consecutive years, as stipulated under Nigerian corporate laws. Shell companies—often used as fronts for illicit financial flows—are a primary focus of the operation.
Magaji explained that deregistered companies lose access to critical operational tools, including bank accounts and the ability to conduct official transactions, effectively curbing their activities. The CAC is collaborating with the Federal Inland Revenue Service (FIRS), security agencies, and financial institutions to ensure seamless enforcement.
The Registrar-General attributed the exercise’s success to strong political backing from President Bola Ahmed Tinubu and the Minister of Industry, Trade, and Investment, who have supported rigorous enforcement of corporate regulations.
Additionally, the CAC is undertaking a comprehensive reform to digitise and onboard historical business records dating back to 1912. This effort aims to strengthen the Commission’s capacity to track and deregister non-compliant entities, creating a more transparent and accountable corporate framework.
The CAC’s message to businesses is clear: compliance is non-negotiable. “Companies must fulfill their statutory requirements, including filing annual returns, to remain operational. This initiative ensures that only active and legitimate businesses contribute to Nigeria’s economic growth,” Magaji emphasised.
The crackdown is expected to have far-reaching effects on improving Nigeria’s business environment by promoting transparency, reducing fraud, and fostering investor confidence.
