By Obiabo Francis Amedu MCIARB(UK)
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On the 31st July 2023, the Corporate Affairs Commission Pursuant to the provisions of section 692 (3) & 4 released the names of Ninety-Four Thousand Four Hundred and Forty-Three (94443) Companies as companies prepared for striking off from the Companies Register kept at the Corporate Affairs Commission. By that notice; Ibe Bookshop & Stationeries Nig Ltd and the other Ninety-Four Thousand Four Hundred and Forty-Two (94442) have only Ninety days from the date of the publication to take immediate and urgent steps to make their mandatory statutory and compliance filings at the Corporate Affairs Commission or risk delisting from the Register of Companies in Nigeria.
As expected the publication of the notice has caused a lot of panic and rush amongst owners i.e. directors and shareholders of the various companies who are worried about whether their companies would be delisted for failure to make the necessary statutory filings at the Corporate Affairs Commission. The list released by the Corporate Affairs Commission is not reader friendly as it would definitely take days if not weeks to diligently go through the more than 1500-hundred-page list of Ninety-Four Thousand Four Hundred and Forty-Three (94443) companies listed for delisting by the Corporate Affairs Commission.
The only relief however is that there is a discernable pattern to the list published by the Corporate Affairs Commission for striking off. The companies listed for striking off were incorporated between 1976- 1991, what that implies is that the companies listed for striking off have failed to pay their annual returns and update their books with the Corporate Affairs Commission for at least over thirty (30) years counting.
Section 292(3) gives the Commission the powers to strike off the name of a company where it observes or has reasonable cause to believe that a company is not carrying on business or has not been in operation for 10 years or has not complied with provisions of this Act for a consecutive period of 10 years.
By the aforementioned provision of the Enabling Act, companies incorporated between 2013 and 2023 i.e. the statutory period of ten (10) years need not bother to check the more than 1500-pages public notice dated 31st July 2023, while companies incorporated between 1992-2013 need to take steps to update their books with the Corporate Affairs Commission, immediately. No doubt the Corporate Affairs Commission would follow up with another batch of names of defaulting companies after delisting the names of defaulting companies from the year 1976-1991.
While it is not in doubt that the Corporate Affairs Commission has the powers to deregister a company that has remained dormant and failed to make its statutory filing for a period of over thirty years; However, as held by the Court in Ejefor V Okeke (2000) 7 NWLR (Pt.665) 363 and Agu V Okpoko (2009) LPELR-8286 “It is trite that where a statute vests specific powers in an institution and the exercise of such powers becomes an issue, the institution vested with such power must provide proof that the powers were exercised in the manner provided by law
The germane question that remains to be resolved therefore, is whether the Corporate Affairs Commission obeyed the provision of the Act in the release of the notice published on the 31st July 2023. There can hardly be a better way of knowing if the Corporate Affairs Commission complied with the mandatory provisions of CAMA in the publication of the names of the company prepared for delisting than by considering the provisions, which for ease of reference and appreciation is reproduced below:
Section 692
(1) The Commission may strike off the name of a company from the register of companies if—
(a) a special resolution has been passed by the company that the name of the company be struck off the register;
(b) an application has been made to the Commission that the name of the company be struck off the register;
(c) advertisement has been made in three national daily newspapers within 28 days of passing the resolution, calling for objections, if any, to the application; and
(d) the Commission is satisfied that— (i) the reasons given for the application are sufficient to justify the striking off, (ii) the company has not commenced business and has no undischarged obligations, and (iii) no reasonable objection has been received within 28 days of the publication of the advertisement mentioned in paragraph (c).
(2) Any person aggrieved by the striking off of the name of the company under this subsection may apply to the Court, at any time before the expiration of two years from the date of the striking off, and if the Court is satisfied that it is just to restore it to the register, the Court may order the name of the company to be so restored.
(3) Where the Commission observes or has reasonable cause to believe that a company is not carrying on business or has not been in operation for 10 years or has not complied with provisions of this Act for a consecutive period of 10 years, the Commission may cause to be published, in at least three national daily newspapers, a notice of its intention to strike off the company from the register.
(4) Where the Commission does not, within 90 days of the last publication, receive any response from the company that it is carrying on business or in operation, it may strike off the name of the company.
Clearly, the Corporate Affairs Commission has taken the section 692 (3) & (4 ) Route by its publication of 31st July 2023, however, has the Commission truly complied with the mandatory requirement of section 692 (3) & (4) by releasing on its corporate affairs commission (cac) portal the list of the over Ninety thousand defaulting companies? Our answer to the poser is in the negative. The requirement of the law is clear and unambiguous:
“The Commission may cause to be published, in at least three national daily newspapers, a notice of its intention to strike off the company from the register”
The use of the word “May” in section 692(3) regardless, the Commission does not enjoy the discretion and choice to decide whether or not to publish the names of the defaulting companies in three national dailies as the said section 692 (3) imposes a duty on the Commission which makes the word “May” used in the section to enjoy a mandatory flavor as opposed to a discretionary flavor this is because in the interpretation of the word “may”, all the provisions of Sections 692 and the overall object project in the context of the Act, would have to be considered and taken into account. In this regard, the law is settled that in the construction of the provisions of a statute, all the provisions dealing with the subject matter and the overall context, intendment or purport of the statute are to be considered together, holistically and not in isolation in order to identify the real intention of the legislature. Judicial authorities on this position of the law include Lemboye v. Ogunsiji (1990) 6 NWLR (pt. 155) 210, Oyeyipo v. Oyinloye (1997) 2 SC, 148, Adisa v. Oyinwola (2000) 10 NWLR (pt. 674) 116, Odutola Holdings v. Ladejobi (2006) 5 SC (pt. 1) 83, Ojukwu v. Obasanjo (2006) 2 EPR, 242 furthermore we commend the authority of Cole v. Jibunoh & Ors(2016) LPELR-40662 where the Supreme Court per Okoro JSC at Page. 42, paras. D-F) held thus:
It has been argued that the use of the word “may” in Section 47 of the Sheriff and Civil Process Act gives a discretion on an applicant whether to apply or not. I think this is not correct as a duty is placed on the appellant herein to make the application if she wanted to save the property from being sold absolutely. This is one situation where the word “may” would connote mandatoriness. See Adesola v Abidoye (1999) 10 – 12 SC 109 at 127 – 128
It becomes self-evident that the word “May” used in section of section 692(3) is mandatory when one goes on to read section 692(5) which reads thus:
Where a company has been struck off in accordance with the provisions of this section, the Commission shall cause to be published in at least three national daily newspapers, the name and date of the striking off of the company, provided that—
(a) the liability, if any, of every director, managing officer and member of the company shall continue and may be enforced as if the company has not been struck off; and
(b) nothing in this subsection shall affect the power of the Court to wind-up a company the name of which has been struck off the register
Clearly, a conjunctive reading of section 692(3) & 692(5) shows that the Corporate Affairs Commission is under the mandatory duty of publishing the names of the companies in three national dailies and not merely publishing it on the corporate affairs commission portal.
Luckily, Section 692(6) of the Companies and Allied Matters Act allows : any company, member or creditor aggrieved by the striking off from the register under subsection (4) may apply to the Court, at any time before the expiration of 10 years from the publication of the notice under subsection (5), for an order restoring the company to the register, and if the Court is satisfied that, at the time of the striking off, the company was carrying on business or in operation, or that otherwise it is just to restore it to the register, the Court may order the name of the company to be restored to the register, and an order under this subsection may include any directions, the Court deems fit, and provision may be made therein for placing the company and all other persons in the same position, as nearly as may be, as if the name of the company had not been struck off the register, and upon delivery of an office copy to the Commission for registration, the order shall have effect according to its tenor, and may be registered accordingly.
In the final analysis, the public notice issued by the Corporate Affairs Commission is a wakeup call to the numerous operators of “Brief Case” companies incorporated solely to pursue contracts without updating their books and making the necessary filings at the Corporate Affairs Commission as required by the law. It is hoped however, that the Corporate Affairs Commission would abide the due process of the law in implementing the provisions of the Companies and Allied Matters Act., so as to prevent needless litigation arising from the laudable and commendable initiative.
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0704 444 4777, 0704 444 4999, 0818 199 9888
Website: www.alexandernigeria.com
