The management of the Corporate Affairs Commission released a newsletter yesterday, 31/7/2023 notifying owners of companies and the general public that the corporate affairs commission has commenced the process of striking off companies that have consistently failed to file their annual returns with the commission.
Company owners should know that owning a company does not stop at them incorporating or registering the name with the corporate affairs commission, you are expected as a matter of statutory requirement to file or mark attendance with the corporate affairs commission every year on the company, this is how the CAC is notified that the company is still carrying out operations and this process of marking a yearly attendance is called filing of annual returns.
“We have compiled the first list of 100,000 companies, and they will be published on our website before the end of this week. They will be giving four weeks.
“Any company that is struck off will forfeit its properties to the government. But they are at liberty to apply and be relisted in the register. If they are not relisted in the next 10 years, whatever assets they have will be forfeited to the government.”
“We know that corruption and other illicit financial flows are carried out, using corporate bodies as vehicles. There is a limit to transactions an individual can carry out. So, most procurement and mining leases are issued or done using companies. The register provides information about the true owners and natural person that controls the companies, so it makes it easier for investigating agencies to search and know the true owners.
“If the company fails to provide the correct information about the ultimate individual that controls that company, at point of registration, that is criminal and attracts a two-year jail term. If they delay in providing the information, it attracts a daily default penalty, minimum of N10,000 per day.”
The corporate affairs commission has been empowered by the Company and allied matters act (CAMA) of 2020 in section 692 of the act to strike off any company which has become defunct or inactive for a number of years.
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There are companies that since its incorporation with the CAC for over 20 years now are yet to file their annual returns. How will the corporate affairs commission know that the company is still carrying out operations; the company will be deemed to no longer be in business hence why the commission has been empowered to strike off such companies from their register.
The names of the defaulting companies have been published on the official CAC website for the owners of the company to do the needful within the space of 90 days, starting from the 1st of August, 2023 and after the exclusion of the 90 days and such companies still fails to update their records by filing their annual returns then the commission will rightly presume that the company is no longer in existence or the company is no longer in operation and it will then be struck off the register of the CAC
The implication of a company getting struck off is that such a company becomes officially non-existent and for you to resuscitate the company you will have to re-incorporate it, that is if the name has not been taken by another fellow, if not you will have to choose another name for the re-incorporation. Secondly, If the name of a company is struck off, the directors or owners of the company will no longer be able to access their money in the company account because the company is now nonexistent.
Consult a lawyer or a CAC agent today and file your annual returns.