| Interview for
eBizguides, February 26th, 2004
Can you present us your organisation, how it was formed
and how has it evolved throughout the years?
Before it was made independent, the Corporate Affairs Commission
was a part of the Ministry of Commerce. In the year 1990,
it was made an independent organisation. It is responsible
for the registration, formation and regulation of the administration
of companies generally including winding up of companies.
We also offer other incorporation services like certified
true copies of companies’ documents, registration or
change of names, debentures and mortgages of all companies,
etc… The idea is that members of the general public
should be able to conduct searches to know whether a company
is healthy or not and know the current liabilities of the
companies they are interested in. We also do other ancillary
services like increase in share capital of companies starting
from the formation and administration through the winding
up of all companies in Nigeria.
How many companies are registered in Nigeria?
Company registration is a continuous exercise. We now have
over 500,000 registered companies dating from 1912 since the
colonial time. But from the time the company’s registry
became independent in 1990 to date, around 280,000 companies
have been registered. We register on the average, 300 companies
a day. We have different types of companies. What we call
Business Name is known in some countries as Sole Proprietorship.
Most of the accounting firms, law firms, some petty traders
and petty contractors register themselves under Business Names
because it is simpler, less cumbersome, less expensive and
implies less documentation. Because of the advantages, many
people go for that form of business registration. The disadvantage
however, is that you don’t have the legal protection
afforded by law, as do the Limited Liability Companies. We
have almost 1.5 million Business Names registered.
What can you tell us about the infrastructure of
the CAC in itself?
We have a central registry in the Head Office in Abuja, the
Federal Capital Territory. In addition, we have 15 branches
and we are opening 4 more this year. The current fifteen branches
are located in Abuja, Lagos, Ibadan, Enugu, Owerri, Uyo, Kano,
Kaduna, Sokoto, Maiduguri, Jos, Makurdi, Yola, Asaba and Port
Harcourt. We intend to open four more this year in Bauchi
to be opened in March, Calabar in Cross Rivers State, Akure
in Ondo State and Ilorin in Kwara State making it 19 before
the end of this year. At the moment we have about 980 members
of staff all the branches included.
What are the procedures a foreign investor must follow
to register its company in Nigeria?
Anybody wishing to register a company in Nigeria is welcome.
The liberalization of our laws has enabled foreigners who
wish to establish companies to do so. If all shareholders
are foreigners, registration is still possible. Even if they
are resident outside of Nigeria, they can still own companies
here without having to come to Nigeria and therefore do not
require a resident permit.
We have improved our registration process. All forms of businesses
are registered within five working days. In addition to that,
we have also set up machinery for a one-day registration system
in the event that anybody requires a very urgent registration.
We are even in the process of setting up our online registration
so that people or interested investors can sit down from and,
from the comfort of their homes anywhere, access the internet
and submit their application for registration. The online
system is already in place and before the end of this year
we will commission the system.
According to you, what are the competitive advantages
of registering a company in Nigeria rather than in other neighbouring
African countries?
Nigeria is a large economy and everybody in business wants
to access such a market. Consumption is definitely greater
than in the rest of the countries in Africa. That is definitely
the greatest incentive for someone to come here and establish
its business in Nigeria. We are complementing that natural
endowment God has given Nigeria by reviewing and liberalizing
our registration processes in such a way that anyone can register
without fear.
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(continues)
Unfortunately Nigerians have the reputation to be
engaged in some malpractices and fraudulent businesses abroad,
what role do you play in promoting the legitimacy of business
in Nigeria?
What we are doing right now is to check fraud in corporate
organisations. Naturally, most of the companies that indulge
in those kinds of business are not registered with us but
fraudulently procure our registration certificate ready to
show to anyone who asks for it. Our priority now, beginning
April is to issue certificates with security features. Right
now it is printed on a plain sheet of paper with just some
decorations that anybody can forge. But we have designed a
certificate with security features which would be very difficult
to forge. The security features are such that even from a
photocopy, you will easily know whether it is a forged certificate
or not because our genuine photocopy has some peculiar watermarks
showing the word “copy” all over the paper. This
will help to get rid of those people going about with fake
company registration papers deceiving embassies and innocent
businessmen.
In the long run, we plan to recall all existing certificates
and replace them with the certificates with the mentioned
security features. By this, we plan to eliminate the ones
that are not legitimately registered. That exercise will also
give us the opportunity to update our records concerning the
details of registered companies.
How will other people in the world know the legitimacy
of your certificates?
There are two ways to do that. The first is the certificate
itself. This would have some security features. The second
would be through online consultation. This would enable everyone
to search our database online. The system is not yet active,
but we are going to make it active before the end of this
year. Right now all our VSAT connections are ready as well
as the Wide Area Network connection with all our offices.
We are at the testing phase to make sure the system works
properly. Right now, embassies and other organisations send
us letters to verify the existence of some companies and we
do oblige them with the answers, though manually. Our plan
for the immediate future is to enable people to do their queries
online.
Talking about compliance, once all our activities are computerized
we certainly would require less staff to do what we currently
do. We would then use the surplus capacity to enhance our
compliance activities. We would be able to monitor the companies
through their annual returns and physical inspections. By
the time we are fully computerized, we will be able to have
enough manpower to deploy to the field for the purposes of
inspection and that would also strengthen our compliance efforts
and contribute towards the elimination of the problems in
the conduct of business in Nigeria.
What is your vision for the Corporate Affairs Commission
in the next 10 years?
Our vision is that ten years from now, we would have made
the Nigerian business registry a world class companies’
registry, such that you either own a company that is complying
with the law or you just do not.
We would like to know more about the man behind the
CAC and what has been your major achievement in the CAC?
My name is Ahmed Al Mustapha. I come from Bauchi State. I
graduated from the Ahmadu Bello University, Zaria in 1978
with Bachelor of Laws. I was at the Nigeria Law school in
1978/79 and was called to the Nigerian Bar in 1979. After
my National service, I went back to Bauchi State where I joined
the judiciary. I was in active private practice for 11 years
until 1993 when I joined the Nigeria Deposit Insurance Corporation
(NDIC), responsible for insuring Banks Deposits. I rose to
the rank of Board Secretary and Legal Adviser with the NDIC
before I was appointed as the Registrar General at the CAC
in June/July 2001.
When I came in the CAC, I inherited a very archaic office
with manual typewriters. The office was badly located with
acute shortage of office accommodation and an environment
not conducive to staff efficiency and customer comfort. There
was also a human resource problem. When I came in, I had to
tackle these problems one by one starting from the office
accommodation. My next focus was to review our incorporation
processes. Prior to this time, a file had to pass through
about 19 steps (availability search, verification, assessment,
payment, transfer, auditing, jacketing, minuting for approval,
approval, registration, typing of certificate, minuting for
signature, signing the certificate, dispatch and computerization,
etc…) before completion. We removed some processes,
merged others and grouped the personnel in teams for efficiency
with each team responsible for the applications for registration
assigned to it. For instance, it used to take a minimum of
three months to register a non-governmental organisation (NGO).
But now, it takes an average of weeks. The third area that
attracted my attention was the computerisation of the operations
of the Commission. While the fourth was the re-orientation,
training and re-training of the members of staff.
Our dream is to continue to improve until we become a world-class
registry such that foreign investors will not have difficulties
in setting up business in Nigeria, as the CAC is the gateway
to business in this country. We want to open the gate and
make it easy for the people to access the Nigerian economy.
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