CAC: Registering Business Now ‘Game Of Chance’ As Nigerians Lament Commission’s Inefficiency

Four years after Nigeria’s Corporate Affairs Commission (CAC) jettisoned manual business registration and went fully online, the move which was initially praised by many has become a pain in the neck.

Nigerians seeking to quickly incorporate their businesses or perform post-Incorporation tasks now experience delays of about a month or more for tasks that usually took between 24 hours to one week.

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When CAC made the switch from manual to online in 2017, the Commission had said the move was aimed at improving the country’s business environment and making it an easier place to do business.

“The objective is to ensure that Nigeria operates at par with some of the best Companies Registries in the world in the delivery of registration services,” CAC’s Registrar-General at the time, Bello Mahmud, had said.

But a few years down the line, completing a business registration or other simple tasks is now said to be a “game of chance” due to inefficiency of the Commission’s website or lack of diligence by officials handling applications.

Some lawyers who spoke to THE WHISTLER lamented how the challenge had left them with backlogs of clients’ jobs.

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The situation recently forced CAC to resort to accepting manual submission of some aspects of post-incorporation applications via email.

Besides delays in attending to applications, our correspondent gathered that the CAC website is usually unstable and sometimes logs users out and fails to recognize registered users.

Barrister Jane Abbey, an Abuja-based lawyer, narrated her experience: “I think the registration process has actually been quite seamless, but the issue I usually face is the approval for consent. There are some certain registrations that you’ll want to embark on that consent of the Registrar-General is required. So, obtaining this consent has always been a very big issue. For instance, I have some registrations that are pending for more than two weeks now because consent has not been issued. And at the end of the day, when they eventually get back to you, you may find out that your application has been queried despite waiting for a very long time. So, that’s the challenge I have for pre-incorporation.”

Abbey said many of the queries are unnecessary and usually arise from lack of diligence on the part of CAC officials handling the applications.

“There are a lot of unjustifiable queries. For instance, two days ago I wanted to apply for a change of a company name and I submitted the request. What I wanted to change was just one letter and CAC, instead of taking a look at the name carefully, just went ahead to query it for the name I’m changing from (as though it belonged to someone else). It simply means that they’re not looking at these things clearly before querying it.

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“And so that means the money I used to reserve the name is gone because they don’t look at words closely before they deny an application. For instance, if you’re changing a name from Book Limited to Books Limited, they just assume it’s the same name and deny it.”

Asked if switching to online business registration had helped or not, Abbey said: “It is a good improvement, however, switching completely to online has been a difficult thing for them.

“Business registration was faster when it was manual than now that it is online. Before they switched, if I reserved a name in the morning, I am certain that it would be approved that day, even registering a business sometimes took less than 24hours. But now ordinary approval for name reservation takes more than a week. It’s more like a game of chance now.”

She, however, said that in the last one week, there’s been improvement in attending to applications.

Another lawyer, who preferred to be simply identified as Barnabas also complained about delays in post-incorporation applications.

He said switching to online registration, “…has been both positive and negative. The issue there is that going fully digital or putting everything off manual has not been a good experience, even though it’s a good development. Because the workload is too much for them to handle. For instance, if you put in a reservation under “part F” i.e. incorporated trustees that require (Registrar-General’s) consent, it takes a minimum of three weeks before they will approve your reservation. I did one and they just approved it since March 26 and its almost the same experience with my colleagues. Also, I put in a registration since March 2 and till now it’s pending approval. And when you call them or tweet at them, their response is that they’re low on staff [because] most of the staff are at home due to the COVID-19 pandemic.”

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On allegations of racketeering by some CAC officials, Barnabas said: “The truth is for you to get work done [fast], you need to know someone inside. Because your client will not want to know if CAC is slow or not. You need to know someone inside that will fast-track it for you. You have to like tip or appreciate such person.”

On if he thinks switching to online registration had help to improve to the country’s ease of doing business, he said: “Honestly it has not, rather it has put more hardship on people, because even post-incorporation, like filing search/status report, normally takes two days, but if I apply online now, it takes about three weeks before they respond. Yesterday they released a memo that you can now do some things manually (via email) because it’s not working on their post-incorporation portal. Like now, you want to apply for a CTC (Certified True Copy Of Certificate) of a lost certificate, CAC says it is extra and that they’re no longer issuing certificates, that people must go online. Now that option is not in their post-incorporation portal and CAC says you can’t come to them [physically] so you’re just stuck.

“They are confused, they are trying to make things easy for people but I think they need to restrategize. They could issue a notice that they are going offline for one week to fix their database and improve their website to handle more traffic because I don’t think they are equipped to handle the traffic they’re getting.

“Because now I can’t even log in to my account, it is telling me “user not found” and that’s how it happens every now and then. So, they should just take a one week break to fix their database and upgrade so everybody will know that they’re coming back better, but not the one that today they are fine and tomorrow they’re epileptic.”

Oluwaseun, also a lawyer, said switching to online registration was initially a good experience until the Commission started to drop in efficiency.

“Switching to online business registration, for me, was a good one. Because I thought it would ease registration for us. Initially it helped, but along the line registering a business became something else, we had backlogs while registering. Name availability couldn’t come out when it was supposed to come out. When we had physical access to CAC, we could walk into the Commission and lay our complaints, but now no one is allowed access and it is a very big challenge for us as it is.

“Before now, name availability plus registration would take two weeks maximum. When we first switched over to online registration, it took about two days, but now I’ve had pending registrations for over two weeks and my name availability is not out, other registrations still pending for about four weeks now. So, I would say it is to our disadvantage now, it’s no longer stress free as we thought it would be.”

A senior CAC official who spoke to THE WHISTLER on the condition of anonymity blamed the challenges on the shortage of staff due to COVID-19 regulations.

“..levels 12 downward aren’t working since the advent of COVID-19 which means for over a year, the CAC had been operating with not more than 38% of its workforce.”

The official said, “Due to deluge of applications on Monday 19th April, 2021, the CAC recalled all levels of staff in a bid to reduce the backlog.

“Those that are conversant with the portal are getting results 24/7 because some officers now treat applications even at midnight.”

He added that, “There are instructional videos on the website on how to use the portal for new users to leverage on to enable them register companies without any hitch. You may wish to note that a lot of registries around the globe are still under lock and key while CAC still operates.”

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