The Corporate Affairs Commission (CAC) is a statutory corporation created by the provisions of the Companies and Allied Matters Act (CAMA 2020). The CAC is the body charged with the regulation of companies and businesses in Nigeria.
Under CAMA 2020, the CAC possesses varying powers and functions that it acts upon to provide a standard and highly regulated industry for players in the market and the general country. CAC can register, re-register, remove, and can compel companies to undertake certain activities as provided by law.
In line with CAMA 2020, we narrow the functions and powers of the CAC to nine vital activities discussed below.
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What functions and power does the CAC have?
1. Incorporation of organizations
Perhaps the primary and the most significant duty of the CAC is the registration of organizations. The CAC is the sole body responsible for the registration of business names, partnerships, sole proprietorships, companies, and associations. All corporations must pass through the CAC for registration as a business in Nigeria.
Presently, the CAC established a portal for the registration of businesses in Nigeria. Individuals can log into the CAC platform and register their businesses to trade in the Nigerian market.
2. Companies database
The CAC keeps a record of every company ever registered by it in Nigeria. With over one million companies registered since 1960, third parties and the general public can get on to the CAC dashboard and investigate any company’s authenticity.
CAC provides information seekers with the name of the company, the registration number of the company, the shareholders, 1st directors, any affiliate company in or outside Nigeria and other information as may be required.
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3. Accepts Statutory filings
Companies are required by CAMA 2020 to undertake some vital statutory filings annually. Statutory filings are required information the law requires a company functioning in Nigeria to undertake.
An example of statutory filings is the Annual returns, which is a payment indicating that a company is a going concern. Other statutory filings include the return of allotment, which is filed when a company allots new shares and others.
4. Post-incorporation activities
All post-incorporation activities undertaken by corporations and other organizations, whether business or not is to be done with the CAC. Post-incorporation activities are actions taken by the company after registration.
Most times after a company has registered with the CAC, the company may be interested to undertake a change to meet up with certain requirements under the law. Post-incorporation activities include the change of directors, change of the company’s registered address, change of the share capital of the company, alteration of the articles or memorandum of association of the company and others.
Just as other CAC functions, the CAC undertakes this responsibility on its website, which is accessible to the general public.
5. Investigates organizations
The CAC is the body responsible for investigating the affairs of a company. Whenever a company or an association acts contrary to the provisions of the CAMA, the CAC can launch an investigation into the organization. Some actions include unfairly prejudicial practices among the directors; the CAC is empowered by law to apportion punishments for errors done by corporations and organizations.
Any member of the company or creditor holding a significant proportion of the company’s assets can call on the CAC to investigate the affairs of the company. The CAC can call on any member or director of the company to speak to an issue or reply to an allegation on the company’s behalf.
An extension to this power is the CAC ensuring compliance with the provisions of the law by corporations and organizations across the country. CAC has the power to place fines on companies in a punitive manner for breaching the provisions of the law.
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6. Supervising companies management and Winding up
How a company is managed is the business of the CAC. Businesses generally have the freedom to dictate the way they operate, nonetheless, businesses must comply with the provisions of their articles and not go ultra vires in their powers.
Company’s breaching the provisions of their articles can be closely monitored by the CAC and action can be taken swiftly against the company.
7. Ancillary services
The CAC offers other services aimed at fast-tracking the other services identified above. This service allows investors who are time-bound quickly get a turnaround on the registration process or any other process. This service usually comes with additional fees payable by the promoters for fast-tracking.
Aside from fast-tracking, the CAC also registers foreign companies. Companies that already function across the world, but intended to gain leverage in the Nigerian market by establishing their presence can approach the CAC for registration.
Foreign companies go through a similar process of registration and regulation as local companies in Nigeria. Nonetheless, the international passport and certain incorporation documents of the foreign company would be required for registration.
8. Accreditation of agents
CAMA provides that certain professionals act as agents to the CAC. The agents are charged with the registration of companies with the CAC. Professionals that can be accredited by the CAC include lawyers, chartered accountants, and chartered secretaries.
To be accredited by the CAC, these professionals must apply to the CAC to gain such privilege. Only these accredited persons can register a company limited by Shares or unlimited, with the CAC.
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9. Reservation of Name
this is the first duty users of the CAC encounter on the platform. When intending to register a company, business name or association, the first step is reserving the name of the organization with the CAC on its platform. Then reservation of names for business names and companies takes at least a day, while associations take 5 days.
Once a name has been reserved by the CAC, the name would be available for 60 days from the date of reservation.
The CAC is a significant agency in the Nigerian business space. The body is charged with varying responsibilities towards fostering a standard and efficient business environment in Nigeria. Business owners can hardly ever go through their activities without interfacing with the CAC.
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Frequently Asked Questions (FAQs)
Do I need an accredited agent to register my business in Nigeria?
Anyone can register a business name and an incorporated trustee. Nonetheless, only the promoters or an accredited agent can register a company. Nonetheless, it is advisable to approach accredited agents to register your business to avoid the hassles that go with registration on the CAC.
Can I submit my post-incorporation documents to the CAC office?
No, as at the time this work was made, the CAC no longer collects physical documents, every activity to be done with the CAC is presently done online.