CAC Matters – Regville Associates

UNDERSTANDING THE ROLE AND REQUIREMENTS OF A PERSON WITH SIGNIFICANT CONTROL (PSC) UNDER CAMA 2020

INTRODUCTION:

The Companies and Allied Matters Act (CAMA) of 2020 has brought significant changes to the corporate landscape in Nigeria. One important provision introduced by CAMA 2020 is the concept of a Person with Significant Control (PSC). In this article, we will delve into who qualifies as a PSC according to CAMA 2020, their functions, the requirements to be considered a PSC, their role within a company, and the procedures for their removal.

WHO IS A PSC ACCORDING TO CAMA 2020?

A Person with Significant Control (PSC) is an individual who exerts substantial influence or control over a company. According to CAMA 2020, a person qualifies as a PSC if they meet one or more of the following criteria:

Directly or indirectly holds at least 5% of the company’s shares.

Directly or indirectly holds at least 5% of the voting rights in the company.

Directly or indirectly has the ability to appoint or remove a majority of the directors of the company.

Exercises significant influence or control over the company through other means.

FUNCTIONS OF A PSC:

The primary function of a PSC is to ensure transparency and accountability within a company. They are required to disclose their interest and influence, providing stakeholders with valuable information about those who hold significant control. By doing so, PSCs help prevent fraudulent activities, promote good corporate governance, and enhance the overall trust and credibility of the company.

REQUIREMENTS TO BE A PSC:

To be considered a PSC, an individual must have a direct or indirect stake in the company that meets the threshold of at least 5% of the shares or voting rights, or possess the ability to appoint or remove a majority of the directors. It is crucial to note that the criteria for being a PSC may vary depending on the jurisdiction and applicable regulations.

ROLE OF A PSC:

The role of a PSC extends beyond mere ownership or control. They have a responsibility to act in the best interests of the company and its stakeholders. PSCs play a crucial role in decision-making processes, strategic planning, and ensuring compliance with legal and regulatory requirements. Their active involvement contributes to the growth and success of the company.

REMOVAL OF A PSC:

In certain circumstances, it may be necessary to remove a PSC from a company. The process of removing a PSC involves following the procedures outlined in CAMA 2020. This typically requires filing the appropriate forms, such as the Notice of Change of Particulars of a PSC, with the Corporate Affairs Commission (CAC) and providing the necessary supporting documentation to validate the change.

CONCLUSION:

The introduction of the Person with Significant Control (PSC) concept under CAMA 2020 marks a significant step towards promoting transparency and accountability in Nigerian companies. By identifying and disclosing individuals who hold substantial control, the PSC provision enhances corporate governance practices and safeguards the interests of stakeholders.

Understanding the qualifications, functions, and requirements of a PSC is essential for companies to ensure compliance with CAMA 2020. By adhering to these regulations, companies can foster an environment of transparency, trust, and good corporate governance, ultimately contributing to a robust and thriving business landscape in Nigeria.

Regville Associates offers end-to-end legal, secretarial, tax and compliance service for companies. Our services aid companies in achieving and sustaining compliance with regulations.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

DOES A CAC CERTIFICATE EXPIRE? HERE’S WHAT YOU NEED TO KNOW.

As a business owner or entrepreneur in Nigeria, you are likely familiar with the Corporate Affairs Commission (CAC) and the importance of obtaining a CAC certificate for your business. The CAC certificate is a legal document that indicates the registration status of your business and is required for a variety of business transactions, including opening a bank account, registering for taxes, and bidding on government contracts. However, one question that many business owners have is whether a CAC certificate expires.

The short answer is NO, a CAC certificate does not expire. Once your business is registered with the CAC and you obtain a certificate of incorporation, that certificate is valid indefinitely. However, it is important to note that while the certificate itself does not expire, there are some situations in which your business may need to update or renew its registration with the CAC.

For example, if your business changes its name or address, you will need to update your registration with the CAC to reflect those changes. Similarly, if you want to add or remove directors or shareholders from your business, you will need to update your registration with the CAC. Failure to update your registration in a timely manner can result in penalties or fines, so it is important to stay up-to-date with any changes to your business.

Additionally, while the CAC certificate itself does not expire, there are some circumstances in which your business may be struck off the register of companies. This can happen if your business fails to file annual returns with the CAC or if it is found to be in breach of other statutory requirements. If your business is struck off the register, you will need to take steps to restore it, which may involve paying fines and submitting additional paperwork to the CAC.

In summary, while a CAC certificate itself does not expire, it is important to stay up-to-date with any changes to your business and to ensure that you meet all statutory requirements for maintaining your registration with the CAC. By doing so, you can ensure that your business remains in good standing and that you can continue to take advantage of the many benefits that come with having a registered business in Nigeria.

Regville Associates offers end-to-end legal, secretarial, tax and compliance service for companies. Our services aid companies in achieving and sustaining compliance with regulations.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

ENSURING COMPLIANCE: A STEP-BY-STEP GUIDE ON HOW TO CHECK IF YOUR COMPANY IS ACTIVE OR INACTIVE ON CAC NIGERIA AND WHAT TO DO NEXT

The Corporate Affairs Commission (CAC) is the regulatory body responsible for the registration and regulation of companies in Nigeria. It is essential to know if your company is active or inactive on CAC Nigeria as it determines the legal status of your business. In this article, we will guide you on how to check if your company is active or inactive on CAC Nigeria and what to do next.

STEP 1: Visit the CAC Nigeria Website

The first step to check the status of your company is to visit the CAC Nigeria website, www.cac.gov.ng. The website is user-friendly and easy to navigate. On the homepage, you will see a tab that says “Public Search”. Click on it to proceed.

STEP 2: Enter Company Name

Once you have clicked on “Public Search”, you will be redirected to a new page. On this page, you will see a search bar where you can enter the name of your company. It is important to note that you must enter the exact name of your company as it is registered with CAC Nigeria.

STEP 3: Review Search Results

After entering your company name, click on the “Search” button. The website will display a list of companies that match the name you entered. Review the search results to locate your company.

STEP 4: Check Company Status

When you have located your company, check the status column to see if it is active or inactive. If your company is active, it means that it is currently in good standing with CAC Nigeria, and all necessary filings and fees have been paid. On the other hand, if your company is inactive, it means that it is no longer in good standing with CAC Nigeria. This may be due to the non-payment of annual fees or non-compliance with regulatory requirements.

What to Do Next If your company is active, congratulations! You are compliant with all CAC Nigeria regulations, and your business is in good standing. However, if your company is inactive, there are a few steps you should take to remedy the situation.

STEP 1: Determine the Reason for Inactivity

The first step is to determine the reason for your company’s inactivity. This may be due to non-payment of annual fees, non-filing of annual returns, or non-compliance with regulatory requirements.

STEP 2: Address the Issue

Once you have determined the reason for your company’s inactivity, take steps to address the issue. For example, if your company is inactive due to non-payment of annual fees, make the necessary payments to bring your account up to date. If your company is inactive due to non-filing of annual returns, submit the necessary documentation to CAC Nigeria.

STEP 3: Seek Professional Assistance

If you are unsure about how to address the issue, seek professional assistance from a lawyer or accountant. They can guide you through the process and ensure that you are in compliance with all CAC Nigeria regulations.

Conclusion

In conclusion, it is essential to check if your company is active or inactive on CAC Nigeria to ensure that your business is in good standing with the regulatory body. By following the steps outlined in this article, you can easily check your company’s status and take the necessary steps to address any issues. Remember, compliance with CAC Nigeria regulations is essential for the success and longevity of your business.

Regville Associates offers end-to-end legal, tax and compliance service for companies. We assist Companies in becoming and staying regulatory compliant.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

UNDERSTANDING THE DRAWBACKS OF USING A BUSINESS NAME INSTEAD OF A LIMITED LIABILITY COMPANY (LLC)

One major drawback of using a business name over a Limited Liability Company (LLC) is that a business name does not provide limited liability protection for its owners. This means that if the business incurs any debts or legal liabilities, the owners’ personal assets may be at risk.

In contrast, an LLC is a separate legal entity from its owners and provides limited liability protection. This means that the owners’ personal assets are generally shielded from the debts and legal liabilities of the business.

Additionally, having a business name alone does not provide the same level of credibility and professionalism that an LLC can provide. An LLC is a formal business structure that is recognized by the law and offers certain legal and tax benefits. It can also help establish credibility with potential customers, suppliers, and investors.

Another potential disadvantage of using a business name is that it may be more difficult to obtain financing or attract investors compared to an LLC. Investors and lenders may view an LLC as a more stable and secure investment opportunity because of the legal protections it offers.

Overall, while a business name may be a simpler and more flexible option for some entrepreneurs, it lacks the legal and financial protections and advantages that an LLC can provide.

Regville Associates offers end-to-end legal, tax and compliance service for companies. We assist Companies in becoming and staying regulatory compliant.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

WHY NIGERIAN COMPANIES MUST PRIORITIZE PAYMENT OF ANNUAL RETURNS TO THE CORPORATE AFFAIRS COMMISSION

The Corporate Affairs Commission (CAC) is the regulatory body responsible for the formation and management of companies in Nigeria. One of the statutory obligations of registered companies with the CAC is the payment of annual returns. This is an important requirement for the compliance and sustainability of businesses in Nigeria.

Annual returns refer to the filing of financial statements and other relevant information of a company with the CAC on an annual basis. It is a mandatory requirement for all registered companies, and failure to comply can lead to penalties or the revocation of the company’s registration. The annual returns must be filed with the CAC within 42 days of the company’s Annual General Meeting (AGM).

The payment of annual returns is crucial for several reasons, some of which include:

1. COMPLIANCE WITH REGULATORY REQUIREMENTS: Payment of annual returns is a regulatory requirement that all registered companies in Nigeria must comply with. Non-compliance can lead to penalties, revocation of the company’s registration, and other legal consequences.

2. PUBLIC RECORD OF COMPANY INFORMATION: Filing annual returns with the CAC ensures that the public has access to the company’s up-to-date information, including its directors, shareholders, financial statements, and other relevant information. This promotes transparency and accountability and helps to build public trust in the company.

3. MAINTENANCE OF THE COMPANY’S LEGAL STATUS: Payment of annual returns is essential to maintain the legal status of the company. A company that fails to file its annual returns for a consecutive period of time may be struck off the register of companies. This can have serious consequences for the company, including the inability to engage in legal transactions, inability to access loans, and other financial support.

4. ACCESS TO FINANCIAL SUPPORT: Companies that comply with regulatory requirements such as payment of annual returns are more likely to have access to financial support, including loans and other forms of financial assistance. This is because compliance with regulatory requirements is an indication of good corporate governance and financial management.

5. TRAVELLING REQUIREMENTS: It is also important to note that Embassies now require companies to present their active company documents as evidence of their legal standing. An “inactive” status could result in Embassies not considering a company as an eligible business for visa applications.

In conclusion, the payment of annual returns to the Corporate Affairs Commission is a legal requirement that is essential for the compliance and sustainability of businesses in Nigeria. It promotes transparency, accountability, and good corporate governance, and helps to maintain the legal status of the company. Companies should ensure that they file their annual returns on time to avoid penalties and other legal consequences. It is also important to note that an “inactive” status could result in Embassies not considering a company as an eligible business for visa applications, tenders, or other services.

Therefore, Nigerian companies should prioritize payment of annual returns as part of their corporate compliance obligations. This will help to ensure the continued growth and success of their businesses.

Regville Associates offers end-to-end legal, tax and compliance service for companies. We assist Companies in becoming and staying regulatory compliant.

Feel free to contact us.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

FIVE (5) CATEGORIES OF PERSONS THAT CAN’T ACT AS A DIRECTOR IN NIGERIA

In Nigeria, there are certain individuals who are prohibited from serving as a director of a company. The Companies and Allied Matters Act (CAMA) outlines these disqualifications and restrictions.

1. INSOLVENT INDIVIDUALS: An individual who is declared bankrupt or is under a debt management plan is disqualified from being a director.

2. CONVICTED FELONS: Convicted felons: Individuals who have been convicted of an offense involving dishonesty or fraud are not eligible to serve as a director.

3. MINORS: Individuals who are below the age of 18 years are not eligible to serve as a director.

4. UNFIT INDIVIDUALS: Individuals who have been found to be of unsound mind or who are under a legal disability are prohibited from being a director.

5. DISQUALIFIED DIRECTORS: Individuals who have been disqualified from serving as a director by a court order or regulatory authority are not eligible to serve in this capacity.

It is important to note that the disqualifications outlined above apply to both executive and non-executive directors. Additionally, if a director is found to have acted in contravention of these restrictions, they may be held liable for their actions and face sanctions, including fines and imprisonment.

In conclusion, being a director of a company in Nigeria comes with its own set of responsibilities and obligations. It is important for individuals to ensure that they are eligible and qualified to serve in this capacity before accepting a directorship appointment.

For Company Formation and Restructuring, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

GROUNDS FOR THE REMOVAL OF DIRECTOR(S) IN NIGERIA

The Corporate Affairs Commission (CAC) is the regulatory agency responsible for registering and regulating companies in Nigeria. The removal of directors in Nigeria is governed by the Companies and Allied Matters Act (CAMA) which provides the legal framework for the appointment and removal of directors in Nigerian companies.

According to CAMA, directors can be removed by:

1. RESIGNATION: A director may resign from their position at any time by giving notice in writing to the company.

2. RETIREMENT: Directors are required to retire at the annual general meeting of the company and may be re-elected if they wish to continue serving on the board.

3. TERMINATION BY THE COMPANY: The company may remove a director by passing a resolution to that effect at a general meeting of the shareholders.

4. TERMINATION BY THE CAC: The CAC may remove a director if they are found to have acted in a manner that is prejudicial to the interests of the company or if they have been declared bankrupt.

It is important to note that the removal of directors must be done in accordance with the provisions of CAMA and any relevant regulations. The CAC may investigate and enforce compliance with these provisions to ensure the proper removal of directors.

For corporate restructuring process and filing, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

PARTNERSHIP FIRM IN NIGERIA: THE TYPES AND FEATURES

INTRODUCTION: In Nigeria, partnerships are governed by the Companies and Allied Matters Act (CAMA) 2020. Partnerships in Nigeria can be classified into three types: general partnerships, limited partnerships, and limited liability partnerships.

GENERAL PARTNERSHIPS (GPs), are formed by two or more individuals who share the profits and liabilities of the partnership. The partners are jointly and severally liable for all the debts and obligations of the partnership, and each partner has the right to take part in the management and administration of the partnership.

LIMITED PARTNERSHIPS (LPs), on the other hand, consist of one or more general partners and one or more limited partners. The general partners are liable for all the debts and obligations of the partnership. In contrast, the liability of the limited partners is limited to the amount of capital they have contributed to the partnership. Limited partners do not have the right to participate in the partnership’s management and administration.

LIMITED LIABILITY PARTNERSHIPS (LLPs) are similar to limited partnerships, but the liability of all partners is limited to their capital contributions. This type of partnership is suitable for professional firms such as law firms, accounting firms, and consulting firms. An LLP may acquire, own, hold and dispose of property, as well as bring and defend actions in its own name. A partner in an LLP could be a Company. Each LLP must have a minimum of two authorized partners, at least one of whom must be a Nigerian national. LLPs are managed by a membership agreement or a partnership agreement and do not have any share capital.

To register a partnership in Nigeria, the appropriate forms and fees must be submitted to the Corporate Affairs Commission (CAC). Additionally, the partnership must have at least two partners and must be registered with the CAC.

It is strongly recommended that partners enter into a partnership agreement to govern the relationship between themselves and the partnership. It is also worth noting that Partnership is not taxed as an entity, but the partners are taxed on their own income.

In conclusion, understanding the nuances of the different types of partnerships and the registration process is crucial in ensuring the smooth running of the partnership business in Nigeria. It is advisable to seek legal advice before entering into a partnership agreement or registering a partnership with the CAC.

For more guidance and registration of Partnership in Nigeria, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

FIVE (5) BENEFITS OF REGISTERING YOUR COMPANY WITH THE CORPORATE AFFAIRS COMMISSION (CAC)

The Corporate Affairs Commission (CAC) of Nigeria is a government agency responsible for the registration and regulation of companies and businesses in Nigeria. It is tasked with the responsibility of regulating the formation, registration, incorporation and management of companies and businesses in Nigeria. Its aim is to ensure compliance with the laws and regulations that govern the formation, registration and operation of companies and businesses in the country. The commission also maintains a database of registered companies and businesses and makes this information available to the public. The CAC also has the power to deregister companies that do not comply with the laws and regulations or that have become dormant.

There are several benefits of registering a company with the Corporate Affairs Commission (CAC) in Nigeria, including:

1. LEGAL RECOGNITION: A registered company is legally recognized as a separate entity from its owners and has the ability to enter into contracts, borrow money, and sue or be sued in its own name.

2. LIMITED LIABILITY: Shareholders of a registered company are typically only liable for the debts of the company to the extent of their unpaid share capital.

3. CREDIBILITY: Registering a company with the CAC can enhance the company’s credibility and reputation, as it demonstrates a commitment to compliance with legal and regulatory requirements.

4. ACCESS TO FUNDING: Registering a company with the CAC may be a requirement for accessing certain forms of funding, such as bank loans or venture capital.

5. EASE OF DOING BUSINESS: Registering a company with the CAC can make it easier to do business, as it can streamline the process of opening bank accounts, applying for permits and licenses, and other administrative tasks.

In conclusion, registering a company with the Corporate Affairs Commission (CAC) in Nigeria offers several benefits that can help a business to operate legally and efficiently. These benefits include legal recognition, limited liability, increased credibility, access to funding, and ease of doing business. By registering with the CAC, a company is demonstrating its commitment to compliance with legal and regulatory requirements, which can enhance its reputation and make it easier to do business. Overall, registering with the CAC is an important step for any business looking to establish itself and grow in Nigeria.

For assistance on Company Formation and Compliance, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

CAN A FOREIGNER REGISTER AN NGO IN NIGERIA?

Yes, it is possible for a foreigner to register an NGO in Nigeria, but they must first obtain a Combined Expatriate Residents Permit and Aliens Card (CERPAC) before registering the NGO. It is also recommended to use local trustees for the registration process. The registration of an NGO in Nigeria is regulated by the Corporate Affairs Commission (CAC). The process includes conducting a name and availability search, completing and submitting incorporation application forms, publicizing intentions of registering in three newspapers, and submitting required documents to the CAC. The entire process can take around 2 months to complete.

Non-governmental organizations (NGOs) in Nigeria are independent organizations registered by the government but operate outside government control. They are typically non-profit and focus on a variety of social and economic issues, such as poverty reduction, education, healthcare, and human rights. Some well-known NGOs in Nigeria include ActionAid, the Nigerian Red Cross Society, and the International Committee of the Red Cross.

For assistance regarding NGO registration, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667