How reforms reduced company registration to 24 hours – CAC registrar | Dailytrust

How reforms reduced company registration to 24 hours – CAC registrar

Abubakar
Abubakar

With innovations and the adoption of technology in its operations, the Registrar-General, Corporate Affairs Commission (CAC), Garba Abubakar in an interview, ‘30 minutes with Mannir Dan-Ali on Trust TV’, highlighted the new reforms he has brought to the CAC as well as operational modifications through the amended Companies and Allied Matters Act (CAMA 2020)

The Companies and Allied Matters Act was re-enacted by the National Assembly in 2020, what is new about the act?

We have introduced a lot, especially in the area of ease of doing business. As it stands, one man can register and own a company and if he is dead his children can take over for as long as the company is surviving and there are interests. 

In fact, before now, many people were forced to register their companies with a second party just to fulfil legal requirements, but with CAMA, all that is in the past. 

Also, the Act has introduced limited partnerships and limited liability partnerships which now provide additional options for entrepreneurs and law firms.

Similarly, with the coming of the Act, the CAC registration portal was completely rebuilt to allow companies to transact on it from anywhere.

We also decided to begin a mailing system through designated mailing companies for customers to fill out their registration. That way we reduced physical contact with our staff. 

Although there was resistance, we stood our ground. Now from anywhere in the world, you can register your company; all you need is to create an account – whether individual or corporate. After all the processes, we will send your certificate to you.

However, we are in the process of integrating our system with the National Identity Management systems so that once you insert your NIN, all other details will be out. So if you don’t have a NIN, it means you can’t register your company. 

The essence is to verify the integrity of the data we are collecting. In the same vein, CAMA now has a provision to give companies unlimited capacity.

What has been the impact of CAMA on Nigerian businesses?

One of the major impacts is in terms of the cost of registration. To register a company now, you don’t need to print any documents. In fact, you don’t need to go to any business centre if you don’t have an office, all you need is to create an account, and key in your information. You only scan and upload your means of identification and do that seamlessly. 

It has reduced costs drastically because you don’t need any third-party intervention which is through lawyers and accountants. 

From our records, 98 per cent of these applications are processed the same day as we work 24/7. So, registration of business takes 24hrs now to complete.

You were commissioned to register 250,000 companies by the federal government. How far have you gone?

All the companies were registered because of the impact of COVID-19. It was part of the survival fund initiative and one of the ways to achieve that is to finance registration. For the beneficiaries it was free and for CAC, the federal government paid 50 per cent of the fees. 

Each state had 6,606 except Lagos which had 9,000, Kano had 8,000 and Abia had 7,000. As we speak the exercise has been fully completed and certificates have been issued and all the beneficiaries have started using these certificates in their various business units.

Is there an upsurge in company registration with the introduction of CAMA?

The pattern of registration is the same because there is no surge but people are taking advantage of limited partnerships and limited liability partnerships. As such, we register an average of 2,000 companies every week. But it’s not just enough to register, you have to file your returns.

How are you handling companies that refuse to file their returns? 

In the past, enforcement was difficult as some of the companies moved from their initial addresses, and anytime we sent letters of reminders, there was no response. But with the new online system and our new database, at a glance, the site shows if a company is active or inactive in terms of filing their returns. 

We have devised a strategy to address the issue. So if you check our website, we have an active and non-active section for companies. Those that have filed their returns to date are classified as ‘Active’, and those that have not filed their returns up to date are classified as ‘Inactive’. 

So that is the game-changer, companies that hitherto did not file for 20 to 30 years, are coming forward to clear these backlogs. So those with inactive status, a lot of embassies reject doing business with them and government agencies also decline to engage most of these companies in procurement.

Also on our website, you can search for any company and know its status and its beneficial holders. These are measures to support the anti-corruption strides of the federal government. 

Furthermore, if you want to view the company’s directors, it’s a paid service which will be provided as requested.

What is the minimum age for registering a company? 

Once you’re above 18 years, you can register a company.

What’s the fee for registration currently?

If you’re registering a business name and not a company, you are paying N10,000 without any addition and if you’re registering directly, you don’t need to pay any professional and you get your certificate director. 

However, if you’re registering a company, with one million share capital, you’re paying a registration fee of N10,000 and stamp duty charge of N7,500 so the total amount payable is N17,500 and the minimum share capital for registering a company is N100,000. 

But for a private company, share capital up to 500 million will attract a fee of N5,000. So N5,000 is charged per a million capital fund. So any share capital fund above 500m is a 25 per cent reduction.

The major challenge before now was the professional fees charged by lawyers, accountants and chartered secretaries. Because we are talking about ease of doing business, we have to open a field as not everyone has the money to engage a professional. So we have made it easy. In a nutshell, for new registration, you do not have to pay for certified true copies of documents.

How much do you generate on average from company registration?

Our average revenue before 2020 was N12 billion and the law allows us to spend the money on salary and running costs and we are supposed to pay the operating surplus to the government after the accounts must have been audited. 

But for the first time in 2020, even with the COVID-19 challenges, we made a revenue of N20bn and we paid an operating surplus of about N3 billion out of that. 

In 2021 we made about N16bn. The reason revenue dropped in 2021 was because the fee for registration was reduced by 65% for private and 165% for public companies. That drastically reduced our revenue.

We have about 1,200 staff whose salaries we have to pay and running costs and also pay electricity. We have offices in 36 states and two in Abuja and all these things cost money.

The reforms have brought down our revenue. The improvement is in terms of volume, the ease of doing business initiative was to encourage people to register. The impact of COVID is a factor but we are hoping things will improve.

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