Under the Companies and Allied Matters Act (CAMA) 2020, the owners of a defunct company may apply for striking OFF a defunct company from the Nigerian company register provided such a defunct company that has not commenced business and has no undischarged obligations

A defunct company under the Companies and Allied Matters Act is;

  1. A company that has not commenced business and has no undischarged obligations, or
  2. A company which the Corporate Affairs Commission (CAC) observes or has reasonable cause to believe is not carrying on business or has not been in operation for ten (10) years or has not complied with the provisions of the Companies and Allied Matters Act for a consecutive period of ten (10) years.

Section 692 of the Companies and Allied Act, 2020(CAMA) makes provision for the power of the CAC to strike off the name of a defunct company from the Register of companies. The power can be exercised by the CAC suo motu or on an application to the CAC by the company in question.

Section 692(1) of the CAMA makes provision for the procedure by which a defunct company who wishes for its name to be struck off the Companies Register can achieve the same. The procedure is as follows:

  1. A special resolution is passed by the members of the company at the general meeting stating that the name of the company is struck off the register.
  2. Application is made to the CAC that the name of the company should be struck off the register. The application shall contain;
  3. The reasons for the application, and
  4. That the company has not commenced business and has no undischarged obligations.
  5. Advertisement is made in three national daily newspapers within 28 days of the passing of the special resolution, calling for objections, if any, to the application.
  6. The CAC may strike off the name of the company if it is satisfied that;
  7. The reasons given for the application are sufficient to justify the striking off,
  8. The company has not commenced business and has no undischarged obligations, and
  9. No reasonable objection has been received within 28 days of the publication of the advertisement.

Where the company has been successfully struck off, the CAC shall publish in at least three (3) national daily newspapers the name of the company and the date of the striking off.

Any person aggrieved by the striking off of the name of a company may apply to the Federal High Court, at any time before the expiration of two (2) years from the date of the striking off, and if the Court is satisfied that it is just to restore the company to the register, the court may order that the name of the company be restored.

Also, the CAC has the power to Suo Motu strike off the name of a company from the register where it observes or has reasonable cause to believe, that the company is not carrying on business or has not been in operation for ten (10) years or has not complied with the provisions of the Companies and Allied Matters Act for a consecutive period of ten (10) years. Section 692(3), (4), and (5) of the CAMA provides for the procedure the CAC must follow;

  1. The CAC may publish in at least three (3) national daily newspapers, a notice of its intention to strike off the company from the register.
  2. Where the CAC does not, within 90 days of the last publication receive any response from the company that it is still carrying on business or in operation, it may strike off the name of the company.
  3. The CAC shall publish in at least three (3) national daily newspapers the name of the company and the date of the striking off.

Any company, member, or creditor aggrieved by the striking off from the register by the CAC suo motu may apply to the court, at any time before the expiration of ten (10) years from the date of the publication.

Conclusively, it is worthy of note that where a company has been struck off, 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. Also, the striking off of a company does not affect the power of the court to wind up such a company.

 

By Corporate & Commercial Law Team at Resolution Law Firm

Email: info@resolutionlawng.com