31 Mar CAC Updates: Promoting Ease of doing business in Nigeria
Nigeria is regarded as the biggest country and the second largest economy in Africa however the country has been faced with a high decline in the volume of private sector investment/participation. This has resulted in the Federal Government devising means to attract investors back into Nigeria consequently leading to an improvement in the economy.
In order to adequately promote the growth of the economy, a review was conducted on the various agencies responsible for conducting business in Nigeria namely, Corporate Affairs Commission (herein referred to as ‘CAC’), Nigeria Investment Promotion Commission (NIPC), National Office for Technology Acquisition and Promotion (NOTAP), Federal Inland Revenue Service (FIRS) and Nigeria Customs Services (NCS), amongst others. For the purposes of this article, the contributions from the CAC towards the advancement of carrying out business in Nigeria will be discussed.
The CAC is the only agency of government charged with the responsibility of registration of companies, business names and incorporated trustees in Nigeria. Section 7 of the Companies and Allied Matters Act (‘CAMA’) explicitly enumerates the functions of CAC as:
- Administration of CAMA
- Establish and maintain companies registry
- Conduct investigation(s) into the affairs of any company where the interest of the shareholders and the public so demand
- Perform other functions as may be required under CAMA
- Undertake such other activities as are necessary or expedient for giving full effect to the provisions of CAMA
It is the responsibility of the CAC to make regulations that will, in turn, provide an easement in the registration process of a company in Nigeria. This has led to the CAC introducing schemes to aid the process:
- Online Registration
Documents required for the registration process can now be scanned and uploaded directly on CAC’s website. Whilst the CAC stated that the objective behind this was to ensure that company and business names are registered under six (6) hours, it is safe to state that this incentive creates room for transparency in the registration process. It also provides a certain level of security for individuals and/or companies who intend to partner or invest in a company incorporated in Nigeria. Additionally, it proposes to eradicate all delays witnessed during registration as well as unauthorised bureaucracy within the CAC. Irrespective of this new online registration process, applicants are still required to forward original copies of their application to CAC’s office.
- CAC Forms
Another incentive that has been introduced by CAC is the reduction of the CAC Forms from seven to one. This single form (Form CAC 1.1) now contains all the necessary information required for the registration process and can also be downloaded from the CAC website. The motive behind this is to reduce cost and time required to register a business.
The CAC has provided a systematic approach that can be used to promote business in the country through the introduction of a seamless and prompt registration of companies and post-incorporation filings. With these introductions towards the ease of conducting business in Nigeria, the confidence level of a potential foreign investor can be enhanced. As much as this new approach is applauded, an individual/foreign investors will still require legal assistance in registering a company based on the technicalities of the registration procedure and other post-incorporation registrations.
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