CAC clarifies de-listing of 400,000 dormant companies
The Corporate Affairs Commission (CAC) says the impending de-registration of 400,000 dormant companies is aimed at sanitising the business environment for economic growth.
The Commision's image maker, Mr Churchill Williams, told journalists in Abuja that the clarification became necessary because of misconception in some quarters regarding the intention of the exercise.
According to him, the affected companies had run foul of the law by not filing their annual returns as required under the Companies and Allied Matters ACT (CAMA).
He said that the first batch of 30,000 companies would be de-listed by March 2007 after the Commission had sent three reminders to them as required by law.
CAMA is the law guiding the regulation and supervision of the formation, incorporation, registration and management of companies.
It stipulates that a registered company must file its annual returns which is a statement on the state of affairs of the company after 18 months from the date of registration, and to do so annually thereafter.
Williams said the Commission had discovered that the affected companies had not complied with the provisions of the law, adding that response by some of the companies to a series of reminders showed that they had remained dormant since incorporation.
He said the CAC was saddened by the fact that this large number of companies had remained dormant and not contributing to the growth and development of the economy.
Williams regretted that the companies had existed in the company register as if they were alive and well.
He said that CAC investigation revealed that some of the companies were incorporated following promises of contract award or just for the purpose of executing contracts, adding that they became dormant because the contracts were not forthcoming.
Williams said some persons registered companies just to prevent genuine investors from using names seen as attractive or ``catchy'' and only to go behind and negotiate with such investors to buy over the names.
``If the purpose of registering a company is just to execute one contract or another, then such a company should not exist,'' he said, adding that those involved in such acts were not helping the economy.
``The economy has to be sanitised. The only way we can know what the business companies are doing is through information provided in the annual returns.
``If you don't provide information on the state of affairs of your company then CAC will not be able to advice you or provide information about such companies to stakeholders requiring them,'' he said.