Less than two weeks after commencing the implementation of Companies and Allied Matters Act (CAMA 2020), the Corporate Affairs Commission on Friday said that many limited liability companies have been declared as inactive for their failure to submit their audited financial returns or transactions.
The Registrar-General of CAC, Mr. Garba Abubakar, said in Abuja at an interactive session with members of the Commerce and Industry Correspondents Association of Nigeria.
Abubakar said the implementation of CAMA 2020 has begun in earnest, adding that the Act was gazetted by the National Assembly in November 2020.
Though the total number of companies declared as inactive was not revealed, he pointed out that the status of such affected companies has been posted on the Commission’s website.
However, he clarified that no company has been de-listed by the Commission, adding that the process of delisting the names of companies under the new law is cumbersome.
He said, “The provisions of the Companies and Allied Matters Act 2020 have actually made the process of delisting companies more cumbersome to carry out.
“Unlike before, where CAC has reasonable cause to believe that companies are no longer carrying out its duties, we will write to them, but under the new law, it will take us up to ten years to delist them.
“You can’t delist until after ten years. The only innovation in the new law is any company that has not carried out business or does not have existing obligation can approach the CAC to be delisted.
“But what we have done to enforce compliance with the new law is that our new portal tells you the status of any registered company whether it is active or inactive.
“A company that has not been filing its financial returns within a specified time is classified as inactive.
“We have already started doing that. So we have not delisted any company since the commencement of the implementation of the new law.
“But we have re-classified many companies as being inactive because they have not been filing their returns.”
President Muhammadu Buhari had on August 7 assented to the Companies and Allied Matters Bill, 2020 passed by the National Assembly.
The new Act repealed the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2000 and enacted the Companies and Allied Matters Act, 2020 to provide for the incorporation of companies, limited liability partnerships, limited partnerships, registration of business names together with the incorporation of trustees of certain communities, bodies, associations; and for related matters.
This Act is seen as a good innovation into the Nigerian corporate and commercial business industry after almost 30 years of abiding by the repealed CAMA.
The CAC Boss said the new Act is made up of 870 Sections, as opposed to the 613 sections in the 2004 Act) and is divided into seven Parts.
Part A deals with the Composition of the Corporate Affairs Commission, Part B provides for Incorporation of Companies, Part C deals with Limited Liability Partnership, Part D provides for Limited Partnership, Part E covers the registration of Business Names, Part F guides on registration of Incorporated Trustees and Part G deals with general provisions and the establishment of Administrative Proceedings Committee.