Nigerians are strongly cautioned by the Corporate Affairs Commission against initiating the process of setting up businesses if they have no immediate plans to bring them into operation. In a conversation on December 17, 2023, Mr. Justine Nidia, the Chief Compliance Officer of the Corporate Affairs Commission (CAC), voiced his perspective. Nidia mentioned that the commission has no inclination to endorse individuals to promptly register companies unless they possess a concrete business concept that can materialize.
He cautioned against the imprudence of establishing a company only to leave it neglected within, as such a practice proves futile for the economy, he remarked. The director of the organization labels these companies as shelf companies, advising against their inclusion in the CAC register of companies, which ultimately leads to their removal from the list. The motivation behind the delisting of companies lies in the commission’s collective effort to discourage the support and promotion of dormant businesses.
5,000 companies submit their annual returns after preliminary roster.
Shelf companies refer to registered entities that are in a state of redundancy or dormancy, lacking any sort of activity or purpose. Nidia emphasized that it is unnecessary for them to remain enlisted in the company registry. In accordance with what is proper, the most suitable course of action would be to eliminate or expunge their names from the register. In regards to the matter, he mentioned that the commission had officially disclosed a preliminary roster.
This preliminary roster comprises approximately 100,000 businesses that are endorsed for removal. An initial grace period of 90 days was granted to individuals who believe their businesses will continue operating, allowing them to submit annual returns within this timeframe to avoid being removed from the list. However, this duration has now expired. Following the release of the initial publication, a staggering 5,000 companies swiftly came forward to submit their annual returns. This left a substantial number of around 95,000 companies, void of such filings, to be delisted.
CAC formulated a strategic plan consisting of four major points.
The commission has recently undertaken a new approach by releasing an additional publication. This publication serves as a formal request to companies whose tax returns have been filed and their names remain on the commission’s list. They urged these companies to provide the commission with substantiating evidence. Nidia reaffirmed the CAC’s commitment to not removing a company from the list if it has already filed its return. In order to allow ample time for compliance, the commission has decided to grant an extra month.
Once this period elapses, it will proceed with gazetting the final list. The efforts of the present government, under the leadership of President Bola Tinubu, were praised by the CAC director for their dedication in creating an environment that fosters the success of businesses within the nation. Nidia declared that the CAC, according to the agenda of the Tinubu-led administration, formulated a strategic plan consisting of four major points to effectively manage the operations of CAC.
Fostering a productive work environment and enhancing workforce skills.
In light of the rejuvenated sense of optimism presented in the renewed hope agenda, the focus of the commission gravitated towards devising a comprehensive four-point plan. This endeavour aimed to revitalize the commission and enhance its efficiency, ultimately resulting in a notable repositioning. He spoke of a comprehensive plan consisting of four key elements: expanding the sources of revenue, ensuring strict adherence to regulations, fostering a productive work environment, and enhancing the skills and knowledge of our workforce.