The Corporate Affairs Commission (CAC) has issued a six-week deadline for all unregistered businesses in Nigeria to formalize their operations or face legal consequences, including potential jail time. The warning, announced on Tuesday, highlights growing efforts by regulatory bodies to crack down on illegal business activities and protect consumers from scams.
According to the CAC, operating any form of business in Nigeria, whether as a company, limited liability partnership, limited partnership, or under a business name without official registration violates Section 863 of the Companies and Allied Matters Act (CAMA), 2020. The offense carries a penalty of up to two years imprisonment, along with daily fines for every day the offense continues.
“It is a criminal offence to carry on business in Nigeria under an unregistered name or acronym,” the CAC stated in a public notice titled “Carrying on Business in Nigeria Under an Unregistered Name or Acronym.”
This announcement comes in the wake of the collapse of CBEX, a controversial cryptocurrency investment scheme that allegedly defrauded Nigerians of over ₦1.3 trillion. CBEX operated under ST Technologies International Limited, a company registered with the CAC but without the proper investment licensing from the Securities and Exchange Commission (SEC). The Economic and Financial Crimes Commission (EFCC) emphasized that CAC registration does not grant legal authority to run investment operations in Nigeria.
“Possession of a CAC certificate or SCUML (Special Control Unit Against Money Laundering) certificate does not equate to legal authorization to operate in the investment space,” the EFCC said, cautioning the public about assuming legitimacy based solely on CAC registration.
In response, the CAC doubled down on enforcement, reminding businesses of their legal obligations beyond registration. Under Section 729 of CAMA, all registered entities must display their registered name and CAC number at every place of business and on official documents such as letterheads, signage, and promotional materials.
The Commission also flagged the criminality of false declarations in company documents. Section 862(1) of the Act states that anyone who knowingly includes false information in any official business document commits a criminal offense punishable by up to two years in prison.
These requirements are not new, but the CAC’s ultimatum shows it plans to move from education to enforcement. “Failure to comply will lead to prosecution,” the Commission warned.
The backlash from the CBEX scandal sparked further concern from lawmakers. The House of Representatives recently warned celebrities and influencers to stop promoting unregistered or unlicensed investment platforms. Their involvement, lawmakers say, gives false credibility to fraudulent operations that target vulnerable Nigerians seeking quick financial returns.
In light of these events, the CAC urged all business owners, especially small businesses, partnerships, and sole proprietors to visit the official CAC website (www.cac.gov.ng) to begin or complete the registration process. It also advised stakeholders to ensure that any business offering financial products or investment opportunities obtains the appropriate licensing from regulatory bodies like the SEC or the Central Bank of Nigeria (CBN).
The Commission is taking this step to ensure businesses do more than operate; they must operate legally and transparently. And consumers must verify the legitimacy of businesses, especially those handling money or investments, before engaging.
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