The Corporate Affairs Commission (CAC) has stepped up its campaign to delist inactive companies from its register, a process known as “striking off,” which strips a company of its legal status.
According to the Commission, many business owners only discover the implications of non-compliance when they attempt to access critical opportunities such as bank loans, government contracts, or investor partnerships.
To help businesses avoid this fate, experts have outlined six key steps under the Companies and Allied Matters Act (CAMA) 2020 that ensure smooth registration and post-incorporation compliance:
1. Choose a Unique Business Name: Select two distinct names and confirm their availability on the CAC portal. Names can be reserved for 60 days with a fee of ₦500.
2. Prepare Governing Documents: Draft a Memorandum and Articles of Association in line with Sections 27 and 28 of CAMA 2020.
3. Declare Share Capital: State the authorized share capital, with a minimum of ₦100,000 for private companies as mandated by law.
4. Appoint Directors and Shareholders: Provide details of at least two directors (or one for small companies) and a minimum of one shareholder, in compliance with Sections 20 and 271.
5. Submit Registration Documents: Upload all forms, including CAC Form CAC1.1, on the online portal and pay statutory filing fees and stamp duties.
6. Comply Post-Registration: Secure a Tax Identification Number (TIN) from the FIRS and file annual returns within 42 days of each anniversary to avoid sanctions or delisting.
The CAC stressed that businesses must take compliance seriously, warning that “striking off” inactive firms is not a threat but an ongoing process to clean up the register and strengthen corporate governance in Nigeria.
