The Corporate Affairs Commission (CAC) has issued a decisive ultimatum to unregistered businesses operating in Nigeria: register within six weeks or face legal consequences, including prosecution and potential imprisonment.
In a public notice released on Tuesday, the CAC emphasized the illegality of conducting business without proper registration under the Companies and Allied Matters Act (CAMA), 2020. The statement, titled “PUBLIC NOTICE: CARRYING ON BUSINESS IN NIGERIA UNDER AN UNREGISTERED NAME OR ACRONYM,” serves as a formal warning to individuals and entities operating outside the regulatory framework.Legal
Backdrop
Under Section 863 of CAMA 2020, it is a criminal offence to operate as a company, limited liability partnership, limited partnership, or business name without registering with the CAC. The law also prohibits the use of any name or acronym not officially registered with the Commission.
Section 729 further mandates that registered companies must visibly display their registered name and CAC registration number at all business premises and include this information on letterheads, signage, websites, and marketing materials.
In cases where false information is knowingly provided in official documents, Section 862(1) prescribes a prison term of up to two years and a daily fine for the offending business for every day the violation continues.
Regulatory Implications
This notice is more than a bureaucratic reminder—it signals the CAC’s intent to crack down on the pervasive informality in Nigeria’s business landscape. With over 40 million small and medium enterprises in Nigeria, many of which operate informally, this announcement could trigger one of the most significant compliance drives in recent years.
The Commission warned that enforcement actions will commence at the end of the six-week window, with violators facing prosecution and potential conviction. These measures underscore the government’s push to formalize the economy, increase tax revenue, and enhance transparency in business dealings.
What to Take Away From This Story
Six-Week Deadline: Businesses must register with the CAC within six weeks or risk prosecution.
- Legal Ramifications: Failure to comply may lead to imprisonment (up to two years) and daily fines.
- Brand Identity Requirements: Registered names and CAC numbers must be clearly displayed on business materials and premises.
- Compliance Opportunity: This is a critical window for informal businesses to formalize operations, build credibility, and avoid legal penalties.
- Economic Impact: The move is part of a broader strategy to formalize Nigeria’s informal sector and improve corporate governance.
This crackdown is a clarion call to entrepreneurs, startups, and informal businesses: the era of unregistered operations is drawing to a close. Compliance is no longer optional—it is now essential for survival and growth in Nigeria’s evolving regulatory landscape.
