The Corporate Affairs Commission (CAC) has deregistered over 300,000 dormant companies within a year, as part of efforts to sanitize the nation’s corporate registration system.
This was disclosed by the Registrar General, Hussaini Ishaq Magaji (SAN), in an exclusive interview with The Nation in Abuja.
According to Magaji, the deregistered entities had remained inactive, failing to file annual returns for over a decade. Some of these companies posed risks to the economy, as they could be used for fraudulent activities.
“From October 16, 2023, when I assumed office, to date, we have witnessed an extraordinary level of deregistration. In December 2023 alone, we deregistered over 100,000 companies. By February 2024, another 100,000 companies were removed, and recently, we deregistered an additional 100,000,” he said.
The CAC boss explained that the commission’s system is integrated with critical agencies, such as the Federal Inland Revenue Service (FIRS), security agencies, embassies, and banks, making it impossible for deregistered companies to access banking services or engage in other operations.
Magaji attributed the success of CAC’s measures to the political will of the Federal Government, which has given the commission a free hand to carry out its duties without interference.
He also dismissed claims that a significant number of companies were folding up due to insolvency or economic challenges, describing such assertions as exaggerated.
The CAC boss noted that technological advancements and shifts in business strategies were driving many companies to restructure rather than exit the market. He cited the example of Nokia, which transitioned from producing phones to manufacturing vehicle tyres.
Magaji also highlighted the CAC’s efforts to promote transparency, including the hosting of Nigeria’s Beneficial Ownership Register.
“Our challenge is that we are not even deregistering in millions. This is because, as I earlier told you, business registration in Nigeria started since sometime around 1912. And what we have in our portal is from 2021. So, you can see the barrier.
“All the historical records from that year to this year are not on the portal. We are onboarding them gradually. When we complete our task, we will then have the total number of the dormant companies and they will go.
“Our system is integrated with critical agencies, such as the Federal Inland Revenue Service (FIRS), security agencies, embassies, and banks. Once a company is marked as inactive on our portal, it cannot access banking services, process embassy documents, or engage in other operations,” he said.
“While some businesses apply for voluntary winding up, the numbers of such companies are negligible. Many of these cases arise from changes in business focus rather than economic difficulties. For instance, a company like Nokia transitioned from producing phones to manufacturing vehicle tyres.”
This platform provides free access to information about companies and their significant controllers, ensuring that even individuals with indirect control of a company must disclose their interest within 30 days.
The deregistration of dormant companies is in line with the CAC’s mandate to regulate and supervise the formation and management of companies in Nigeria. The commission’s actions are aimed at promoting a healthy and transparent business environment, and ensuring that companies operate in accordance with the law.
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Jerome Kalu
Jerome Kalu is currently the Senior Correspondent of PIJAlance in Lagos. He was previously the Campus Information Desk (CID) Editor.