The Registrar General, Corporate Affairs Commission, Mr. Bello Mahmud, in this interview with IFEANYI ONUBA speaks on, among other issues, steps being taken by the commission to improve the country’s ranking in the World Bank Ease of Doing business index.
The Federal Government is working assiduously to improve Nigeria’s ranking in the ease of doing business index; what is the role of CAC in this initiative?
The primary role of the commission is to regulate the registration, supervision and management of companies in Nigeria. As the agency of government involved in the start-up of business, the commission has keyed into this project of the Federal Government. We have implemented various reforms and have been strengthening our processes and requirements in line with international best practices towards improving the investment climate in the country.
What are some of the reforms that you have so far implemented to assist government meet its objective of moving Nigeria up by 20 steps in the World Bank business index?
One of the reforms is the direct registration of companies by first directors and subscribers. This has removed the restriction that only accredited agents could register companies. We have also created public search window on our website which would provide names, addresses, registration numbers and dates of registration of all registered companies.
Also, in our bid to make our operation more functional, the commission has decentralised its operations by setting up start-to-finish registration process in six state offices. They are Abuja, Lagos, Kaduna, Kano, Enugu and Port Harcourt.
These offices can receive, approve, and issue new registration certificates directly to customers. This service would be extended to 20 other states by the third quarter of 2017.
We have also reviewed our service timelines for registration services. Name reservation is now twelve hours from submission of request while new registration of companies, business names and incorporated trustees is now 24 hours from filing of application.
One thing is to come up with reforms and another thing is to see its effective implementation. What practical steps is the commission taking to ensure that it achieve some of its plans to make it easier for people to do business in the country?
The commission has currently phased out physical submission of new applications for registration in the six state offices of Abuja, Lagos, Kaduna, Kano, Enugu and Port Harcourt with effect from Monday May 15, 2017.
Consequently, customers processing new registration in these locations will directly complete the application forms and other relevant information and pay registration fee as well as Stamp Duty on the Company Registration Portal and thereafter upload all necessary documents through the commission’s upload interface after due execution.
The objective is to ensure that Nigeria operates at par with some of the best Companies Registries in the world in the delivery of registration services.
One of the challenges facing online transactions in Nigeria is the issue of network availability. What steps have the commission taken to address this concern?
In order to ensure seamless operation of the Company Registration Portal and zero downtime, the commission outsourced the hosting of its main database and operating software to Main-One-Data Centre in Lagos. This will ensure 99 per cent uptime thus ensuring efficient registration services.
The online registration is cheaper, faster and convenient as transactions can be conducted from the comfort of homes and offices. I wish to inform you that as of Friday May 19, 2017, just four days after the start of fully online registration; over 1,250 applications had been submitted online.
The new system may not be without challenges; the commission however will ensure that all such challenges are promptly addressed. The ultimate goal of this management is to make CAC a world class company registry providing excellent registration services.
In registering companies, there are usually Stamp Duties to be paid. What is the level of collaboration with the Federal Inland Revenue Services in ensuring that the process is efficient?
What we did to assist in that regard is to accommodate FIRS wherever we have offices so that we can have a one stop shop. Before now, if you go to FIRS, they will ask you to go to your bank which is outside the commission and it can take two or three days before you can now come back to CAC to file your document and that would be counted as part of CAC timeline.
So what we did now is called electronic stamping. This means that instead of you to go to FIRS to get your document stamped, just go to CAC portal and once you get to the CAC portal, you will now see the FIRS site also. And from there you can pay your money online and the money goes to FIRS and from there you can continue your registration on the CAC portal and submit your documents online.
This is what makes it faster and even those outside the country can get this done without going to FIRS to submit any document.
Before now, company registration was usually done through the services of lawyers. With this online registration process, what role are lawyers playing in the new arrangement?
There is a provision of the law which states that at the point of registration of a company under part A, a legal practitioner must depose to the statutory declaration that the requirements of the law had been complied with. And that forms part of the documents that is supposed to be presented to CAC to register the company.
The practice over the years had been that if you are a chartered accountant, a chartered secretary or a lawyer, then you have a right of audience in CAC and you could go to CAC and present your documents.
This means that for an accountant who is not a lawyer, even if he is engaged by somebody to register a company, he has to go through a lawyer to get that lawyer to depose to that declaration because an accountant cannot sign that declaration and the same applies to the chartered secretary.
So using the same analogy, the government said if you are using other classes of professionals to register companies who by law cannot depose to this statutory declaration, why not allow the owners of this business themselves to also do the registration. Why must you insist that an ordinary entrepreneur who may not even have the requisite capital must go through a professional to submit their application to you because that increases the cost of registration?
So that was approved. But to take it further, the government said since the law did not say the legal practitioner must be a private legal practitioner, CAC staff should therefore depose to this declaration on behalf of any customer that decides to present the application directly.
So if you are a direct customer, that is one of the first directions when you present your document to CAC; you are only required to pay additional sum of N500 to cover the cost of authorisation. So it would be the responsibility of the approving officer in the CAC who is a lawyer to sign that declaration. The minister has given directive for CAC to enlist the service of Private Notary Public that would sign this declaration that is being presented by direct customers for a maximum fee of N500 per application.
Does it mean direct customers won’t need a lawyer anymore to register companies?
For a direct customer, you don’t need to take your document to a lawyer. But we don’t expect every Nigerian to come here to register a company. There are people that may not have the time because they may be too busy.
There are people that have sufficient money that can engage the services of a professional but the concern of government is the Micro, Small and Medium Entrepreneur that may not necessarily have the requisite capital to register. Why should that person pay a legal fee of N30, 000 to N50, 000 whereas the registration fee ranges between N20, 000 to N25, 000?
So because of that concern and in line with global best practices, most of the countries of the world have dispensed with requirement of notarization and for Nigeria to compete, we had to amend our processes and requirement in line with global best practices..
You cannot claim you want to improve your ranking if you are still using standards that are just peculiar to you. You have to scan the world and find out what is the global best practice.
The ultimate objective is to even remove that requirement from law. Once that requirement is removed, you don’t even need to pay N5, 000 for notarization.
Another challenge when it comes to online transaction is the issue of security. What steps have you taken to check the fraudulent activities from people that want to manipulate the system for selfish purpose?
Our system is such that you must be the first director or the shareholder of a company before you can now submit documents for a company. And even at that, you need to show us your identification which can either be a drivers’ licence, national ID card or your passport and it must agree with the names that you submitted.
You recently conducted a delisting exercise of companies, how many companies are now in the CAC register?
We have about 1.5 million companies in our database. That is companies listed under part A.
The first delisting that was done in 2008, we delisted 9, 341 companies. Then last year, about 46, 000 companies were also delisted. This is an on-going exercise because if the commission has any cause that a company is no longer carrying on business, it should be delisted.
But the fact that you have been delisted does not bar you from reapplying. You have a window of 20 years from the date of the gazette to apply for the name to be relisted into the register. If you don’t do that, after 20 years the company is deemed to have been dissolved and whatever assets and properties that it had would revert to the Federal Government.