Introduction
On Tuesday, July 23, 2024, The Corporate Affairs Commission (the “Commission” or “CAC”) released a public notice on ITS Intention to Strike Off Companies from the Companies’ Register (the “Public Notice”). This Public Notice was issued pursuant to section 692 (3) & (4) of the Companies and Allied Matters Act 2020 (“CAMA”).
The Public Notice alludes that the Commission intends to strike off from the Companies’ Register (the “Register”), names of defunct or dormant companies that have defaulted in filing their Annual Returns for a period of ten (10) years and over. The Public Notice further provides that these defunct companies may remedy the default by filing all outstanding Annual Returns and sending an email indicating that same has been done to activation@cac.gov.ng within ninety (90) days from the date of the issuance of the Public Notice.
Need-to-know Information
Section 692(3) of CAMA provides that where the Commission observes or has reasonable cause to believe that a company is not carrying on business or has not been in operation for ten (10) years, the Commission may cause to be published, in at least three (3) national daily newspaper, a notice of its intention to strike off the company from the Register. Subsection 4 of section 692, provides that where the Commission does not, within ninety (90) days of the last publication, receive any response from the company that is carrying on business or in operation, it may strike off the name of the company.
The filing of Annual Returns by businesses is an indication to the Commission that such business is in operation. This position is in tandem with Section 425 (3) of CAMA which provides that failure to file Annual Returns for a consecutive period of ten (10) years is a ground for striking off the name of a company of the Commission’s Register.
Further to the above provisions, the CAC has released the Public Notice, which contains a list of One Hundred Thousand and One (100,001) companies, that meet the set criteria of “inactivity”, and are proposed to be struck off its Register. The purport of this is to ensure that all companies, duly registered under the provisions of CAMA, maintain compliance with its provisions.
Conclusion
Companies incorporated under CAMA are saddled with obligations under the law, which is inclusive of filing annual returns. The need to keep the Commission updated as to the existence and continuity of business is not only for the purpose of compliance but to ensure the continued enjoyment of all rights accruing to a duly incorporated company under the law, to ensure accountability and promote strict regulatory compliance.
Companies looking to avoid being caught by the application of this provision, are advised to file their Annual Returns before the set ninety (90) days, which ends October 21, 2024.
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