In response to the demand for a better set of laws that would take care of the peculiarities of the society, the Federal Government in March 1987 directed the Nigerian Law Reform Commission to carry out a reform of the various business laws including the 1968 Companies Act.
The Law Reform Commission after two years of deliberation, recommended an independent well funded and well staffed body to administer Companies Regulations and related matters in the country. The recommendations of the Law Reform Commission led to the enactment of the Companies and Allied Matters Act and the subsequent establishment of the Corporate Affairs Commission.
The Corporate Affairs Commission started operations on 14th of February, 1991. The Commission is the agency of government charged with, amongst other responsibilities, the regulation and supervision of the formation, incorporation, registration and management of Companies, Business Names and Incorporated Trustees.
The Commission as a regulator is a catalysts for economic development in the country. This has therefore bestowed on it the responsibility to ease the registration of businesses and also create the enabling environment for business growth.
The Commission appears to be working towards the realization of its mandate. Over the past few years, it has consistently embarked on reforms, aimed at sanitizing the business environment with the overall objective to change the focus in doing business in Nigeria. This is to further stimulate the growth of the economy.
Until 2004, registration activities in the Commission were manually carried out with the attendant problems of duplication and mistakes in names as well as registration numbers, pilferage and mutilation of records, fraudulent filings amongst several other problems.
One of such reforms was the introduction and the use of electronic workflows for registration activities in 2004 with the deployment of the Content Pinnacle registration software.
This writer has it on good authority that the above software has been replaced with the new Company Registration Portal (CRP) in September, 2014 which was introduced under a joint initiative of the Commission and the Federal Ministry of Communications Technology.This new platform enables customers to process and pay for name availability and new incorporation services electronically via the web. The electronic payment interface is supported by Nigerian interbank settlement systems plc (NIBSS). A cursory look at the new platform indicates that customers will be able to process all other post incorporation filings via the portal before the end of 2015.
It gladdens my heart that this initiative is intended to ease business start-up by reducing the period of registration from days to few hours and is also expected to significantly improve the next ranking in the World Bank doing Business report. This is what Nigeria need at this point of her history. Government agencies should show seriousness in their functions because it is only by so doing that the purpose of Government which is to create the enabling environment for economic growth will be realized.
The Commission has also initiated a reliable system of capturing data through the introduction of the “Know your customer principle”. This has made it compulsory for customers registering businesses with the Commission to submit recognized and acceptable form of identification. They include photocopy of National Identity Card, Drivers License and data page of International Passport.From investigations, the Commission has so far decentralized its operations by opening offices in all the states of the Federation. The Commission has also made provision for the processing of company incorporation from start-to-finish in the two Lagos offices and also in Kano, Kaduna, Enugu and Port Harcourt. Hitherto, state offices could only register Business Names.
This has made it possible for those state offices to process applications for new incorporations, print, seal and issue certificates to customers without recourse to the head office Consequently, this has reduced the time frame for incorporation to 24 hours. This will add value to the country’s business registration process since the start-to-finish will be extended to all the remaining 31 state offices. This will have multiplier effect on the growth of the domestic economy.
To encourage business formalization, filing fees payable for new incorporation have been reduced by 50% in the case of companies with share capital within the threshold of N2million to N500million and 25% in the case of share capital above N500million. This reduction is intended to encourage migration from the informal to formal sector.
The first company in Nigeria was registered in 1912. The Commission therefore inherited companies records running into thousands. In the commitment to automate all companies records, it has started digitization of legacy records of entities registered before 2004 when the Commission’s electronic system started. There is no doubting the fact that when the project is completed, it will capture the records of over 600,000 companies, about 1,000,000 Business and 40,000 Incorporated Trustees. This is also an avenue to ensure data security and integrity.
This writer is aware that the exercise will provide for electronic searches and other electronic transactions by customers and other interested persons. So far records of 329,438 companies and 162,823 Business Names have been captured. No organization can achieve transparency without proper record keeping.
Missing files was also a problem associated with post incorporation. CAC is addressing this by introducing a file tracking system to enable the Record Management Department (RMD) to track movement of files within the offices. This is to give a final solution to the issue of missing files.
In addition, the Commission had undertaken an in-house review of the Companies and Allied Matters Act , after over 20 year’s of operation and has identified various areas of amendments in line with current global trend in company practice and administration. The proposed amendment, inside sources said would be exposed to stakeholders for their input before same is referred to the Federal Executive Council and for legislative attention by the National Assembly. The amendments, when passed into law, will bring the country up to date in the Business World on Company Regulation and Practice.
The Commission, in collaboration with Growth and Employment in State (GEMS3) of the Department for International Development (DFID) has been carrying out sensitization campaigns across the country on the benefits of business registration. Various state governments, market associations and chambers of commerce have supported the initiative and actively participated in the campaigns. It is heartwarming to gather that the target of the campaign is to get a minimum of twenty thousand (20,000) businesses to migrate from the informal sector to the formal sector within one year. This is expected to deepen business growth and stimulate development of the domestic economy.In order to easy comprehensive online registration, the Commission is collaborating with the Federal Inland Revenue Service towards automating the payment of stamp duties and the stamping of the incorporation documents electronically on the Company Registration Portal.
This is to ensure complete elimination of physical submission of incorporation documents by customers to FIRS for stamping, as is presently the case, and reduce the period of registration to few hours.Doing Business Survey of the World Bank, geared towards the ease of doing business is the most reliable source of information on the global investment climate. The efforts of the Commission, if sustained will greatly improve Nigeria’s ranking in the Doing Business Report.