The recently enacted Companies and Allied Matters Act 2020 (the “CAMA 2020”) has a great innovation which simplifies the process for striking off certain companies from the register of companies. A company can apply to the Corporate Affairs Commission (the “CAC”) for its name to be struck off the CAC register of companies on the condition that the company has not commenced business and has no undischarged obligations. A special resolution of the company is required and the application to the CAC must be advertised in a national newspaper. This is a less cumbersome process as compared to the elaborate procedures in the repealed CAMA for the voluntary liquidation of companies which did not distinguish between non-trading companies and going concerns. We expect this striking off procedure to be useful for dormant companies looking to formally close their businesses and cease to be on the register of companies.
In addition, the CAMA 2020 has strengthened the existing power of the CAC to strike off dormant companies and provided definitive timelines for exercising such powers. The CAMA 2020 empowers the CAC to strike the name of a company which has been dormant for at least 10 years off the register of companies. The CAC may also deregister any company which fails to comply with the provisions of the CAMA 2020 for a consecutive period of 10 years i.e. where a company does not file its annual returns for a consecutive period of 10 years. The 10-year period was not in the repealed CAMA and this provides more clarity on when the CAC can act in respect of dormant or non-compliant companies.
We are available to provide further advice and support your company in respect of the above.
For further information, please contact companysecretary@aluko-oyebode.com
