The Corporate Affairs Commission (CAC), established in 1990 under the Companies and Allied Matters Act (CAMA) during the regime of former military President Ibrahim Badamosi Babangida, serves as the central authority for business registration in Nigeria.
Whether you’re registering an enterprise or a limited liability company, the CAC is the first point of contact for obtaining legal recognition and protection for your business.
Overview of the Nigerian Corporate Affairs Commission
Let’s explore what the CAC is all about and why it matters to business owners.
What is the Corporate Affairs Commission (CAC)?
The CAC was created to regulate and supervise companies' formation, incorporation, registration, and winding up under Nigerian law. This body has a corporate existence, meaning it can sue and be sued, own assets, and perform its functions seamlessly.
Today, the CAC's permanent headquarters is situated at Plot 420, Tigris Crescent, Off Aguiyi Ironsi Street, Maitama, Abuja - with offices in each state of the federation.
Re-establishment of the Corporate Affairs Commission (CAC) Under CAMA 2020
The Corporate Affairs Commission (CAC) is Nigeria’s regulatory authority overseeing companies' operations. Established under the Companies and Allied Matters Act (CAMA) 1990, it replaced the Department of Trade and has since become a statutory body under CAMA 2020.
While the new Act brought significant changes, it retained many provisions from the previous version, particularly concerning the CAC's powers and functions.
The Statutory Nature of CAC
Under section 1(1) of CAMA 2020, the CAC is established as a statutory corporation with perpetual succession and a common seal, capable of acquiring, holding, and disposing of property.
This section underscores the CAC's authority as a legal entity, capable of suing and being sued in its corporate name. Section 1(2) of the Act reaffirms the CAC’s corporate personality, making it clear that it operates as a legal body with full rights to act in the interest of companies and businesses registered under it.
The CAC’s re-establishment under CAMA 2020 maintains its role as the apex regulatory authority for company operations in Nigeria. However, this re-establishment is not a new creation but rather a continuation of its existence since 1990.
Section 869(2) of CAMA 2020 provides transitional provisions, ensuring that the CAC's functions, rights, and obligations under CAMA 1990 continue under the new Act.
Composition and Role of the CAC Board Under CAMA 2020
The Corporate Affairs Commission (CAC) operates as the primary regulatory body overseeing the incorporation and regulation of businesses in Nigeria, governed by the Companies and Allied Matters Act (CAMA) 2020. A key aspect of this regulation is the composition and role of the CAC's governing board, which ensures the effective performance of the Commission’s functions.
Composition of the CAC Board
The governing board of the CAC is constituted by representatives from various sectors, ensuring that a wide range of expertise is available for decision-making. The board includes:
- A Chairman appointed by the President on the recommendation of the Minister.
- Representatives from key sectors including the business community, legal profession, Institute of Chartered Secretaries and Administrators, Manufacturers Association of Nigeria, and the Securities and Exchange Commission.
- Representatives from the Federal Ministries of Industry, Trade and Investment, Justice, and Finance, along with the Registrar-General of the CAC.
- A nominee from the Nigerian Association of Small and Medium Enterprises (NASME), reflecting the importance of small and medium enterprises (SMEs) in Nigeria's economy.
Tenure and Removal of CAC Board Members
Board members are appointed for a three-year term, renewable for one additional term. However, the Minister, with the President's approval, may remove any member if it is deemed not in the CAC's best interest for the individual to remain in office.
This provision allows for flexibility in ensuring board members are aligned with the CAC's objectives, though it also opens the door for potential legal challenges if a member believes the removal was not conducted in good faith.
Role of the CAC Board
The primary role of the CAC board is to provide general policy direction for the Commission, ensuring that its activities align with international best practices. The board’s functions include:
- Reviewing and approving the CAC's strategic plans.
- Overseeing the administration and compliance with CAMA 2020.
- Determining terms of service for CAC employees.
- Fixing remuneration and allowances for staff, in line with guidelines from the National Salaries, Income, and Wages Commission.
Board members, except the Registrar-General, serve part-time and are entitled to remuneration and allowances determined by the Minister. The board must meet regularly, with a quorum of five members required for decision-making.
Members with a direct interest in any matter being deliberated must disclose their interest and are excluded from participating in decisions related to that matter.
Tenure of the Corporate Affairs Commission
Members of the Commission typically serve a three-year term, with the possibility of reappointment. They can be removed if they fail to perform their duties or become incapable of fulfilling their roles.
- Term: A person appointed as a member of the Commission (not being an ex-officio member) shall hold office for three years, with eligibility for re-appointment for one further term of three years.
- Removal: With the President's approval, the Minister may remove any member from office if deemed not in the interest of the Commission.
- Part-time Membership: Except for the Registrar-General, members of the Commission shall be part-time.
- Cessation of Office: A member ceases to hold office if:
- Unsound mind or incapable of performing duties
- Becomes bankrupt or has made arrangements with creditors
- Convicted of a felony or any dishonesty-related offense
- Engages in serious misconduct relating to duties
- Disqualified or suspended from practicing their profession
Members appointed shall receive remuneration and allowances as directed by the President.
The Role of the Registrar-General at the Corporate Affairs Commission (CAC)
At the helm of the Corporate Affairs Commission (CAC) is the Registrar-General, who plays a pivotal role in the organization’s operations. This position is critical for ensuring that the Commission functions effectively and adheres to the mandates outlined in the Companies and Allied Matters Act (CAMA) 2020.
Qualifications of the Registrar-General
The Registrar-General must be:
- Qualified to practice as a legal practitioner in Nigeria for a minimum of 10 years.
- Have at least eight years of experience in company law practice or administration, ensuring a deep understanding of corporate governance and legal requirements.
These qualifications ensure that the Registrar-General possesses the expertise required to navigate the complexities of corporate regulation.
Key Responsibilities of the Registrar-General
- Chief Executive of the CAC:
As the chief executive, the Registrar-General is responsible for the overall management and administration of the Commission. This involves implementing the directives of the CAC’s board and ensuring the smooth running of the Commission's operations. - Accounting Officer:
The Registrar-General serves as the accounting officer of the CAC, overseeing the control and disbursement of funds. This responsibility includes managing the financial resources of the Commission in line with the provisions of CAMA and other applicable regulations. - Appointment Terms:
The Registrar-General's terms of appointment are specified in the letter of appointment, and any additional terms are determined by the CAC’s board with the approval of the President.
The Role of the Commission's Registrar-General
At the helm of the CAC is the Registrar-General, who must have significant experience in legal practice and company law. This individual is responsible for overseeing the Commission’s operations and ensuring compliance with relevant regulations.
Fund and Expenditure of the Commission
The Commission shall establish a fund consisting of sums allocated by the Federal Government and other funds accrued in discharging its functions.
Expenditure of the Commission
The Commission may apply the proceeds of its fund for:
- Administrative costs
- Reimbursing members or committees for authorized expenses
- Salaries, fees, pensions, and gratuities of employees
- Maintenance of acquired property
- Functions under this Act
Annual Accounts, Audit, and Estimates
- Accounting: The Commission shall keep proper accounts and prepare an annual statement as directed by the President.
- Audit: Accounts shall be audited within six months of the year-end by auditors appointed from a list supplied by the Auditor-General.
- Estimates: The Commission shall prepare an estimate of expenditure and income by September 30 each year for submission to the President.
Annual Report
The Commission shall submit a report on its activities, including audited accounts, to the President by June 30 each year.
Functions and Powers of the Corporate Affairs Commission
The CAC’s primary responsibility is to oversee the registration and regulation of business entities in Nigeria. Below are the core functions it performs:
Regulation of Businesses in Nigeria
The CAC regulates the operations of businesses in Nigeria to ensure compliance with the laws stipulated in CAMA.
Supervision of Company Formation
The CAC supervises the formation of companies, ensuring that all statutory requirements are met before the incorporation of any business entity. This function is vital to maintaining legal standards in business practices across the country.
Incorporation of Businesses
Under Section 541 of CAMA, the CAC is tasked with the incorporation of businesses in Nigeria, giving them legal backing and recognition.
Business Registration, Management, and Winding Up
The CAC is responsible for the registration, management, and eventual winding up of companies in line with the provisions of CAMA.
Maintenance of a Company Registry
The Commission establishes and maintains a company registry, with offices across all the states in Nigeria. This ensures that business registration is accessible to entrepreneurs nationwide.
Investigation into Company Affairs
In cases where the interests of shareholders or the public are at risk, the CAC has the authority to investigate the affairs of a company. This ensures transparency and accountability in business operations.
Legal Powers and Additional Functions
The CAC is empowered to perform other functions as specified by any relevant Act or legislation. This includes imposing penalties on companies that violate its regulations.
Revocation of Business Names
The Commission has the authority to revoke business names that are found to be illegal or in violation of the law.
Delisting of Non-Compliant Businesses
Businesses that fail to file annual returns can be delisted from the CAC’s database. In October 2019, the Commission delisted over 40,000 companies and businesses for non-compliance.
Vetting Business Names
The CAC vets proposed business names to ensure they are not already registered. If a name has been previously registered, the applicant is required to choose another name.
Issuance of Certificates of Incorporation
One of the key functions of the CAC is to issue certificates that give businesses legal identity. This process has been streamlined through the CAC’s digital platform, allowing businesses to register online and obtain an e-certificate within seven business days.
Conclusion
The Corporate Affairs Commission is a cornerstone of the business landscape in Nigeria, facilitating the legal registration and regulation of companies. By understanding its role and the benefits of registering your business, you can position your enterprise for success.
CAC Business Entity Registration Service
Our Business Entity Formation services provide support to entrepreneurs and businesses looking to establish their presence in Nigeria. We help you establish the legal structure that best suits your business goals with the Corporate Affairs Commission.
