Reporting persons with significant control to CAC
Who counts as a person with significant control in a Nigerian company under CAMA 2020, and the seven-day and one-month deadlines for telling CAC.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
A friend invests in your company and takes a small slice of the shares. A relative gets the right to choose two of your three directors as part of a family arrangement. A holding company buys into a business that owns part of yours. None of these feels like a regulatory event. Under Nigeria's Companies and Allied Matters Act, 2020, each may create a person with significant control, and with that, deadlines.
This article explains who counts as a person with significant control (PSC), the two notices the law requires and how quickly each must go, how PSC information carries into the annual return, and a practical way to collect, sign and keep the paperwork.
Who counts
CAMA 2020, section 868(1), defines a person with significant control to include anyone who, directly or indirectly:
- holds at least 5% of the shares in the company; or
- holds at least 5% of the voting rights; or
- holds the right to appoint or remove a majority of the directors.
"Directly or indirectly" is the phrase to watch. A person who controls a company that holds your shares can be a PSC of your company even though their name appears nowhere on your register of members. And 5% is a low bar: many minority investors in small private companies cross it.
Seven days, then one month
Section 119 of the Act sets out two notices.
- From the person to the company. A person with significant control must notify the company in writing of the particulars of that control within seven days of becoming such a person.
- From the company to CAC. The company must notify the Corporate Affairs Commission not later than one month after receiving the information, or any change in it.
The notice form is CAC-PSC 01 in the Companies Regulations 2021.
Notice what triggers the company's clock: receiving the information, or any change in it. So a PSC who sells part of their stake, gains new voting rights or loses the right to appoint directors creates a new duty to tell CAC. The register is never filled in once and forgotten.
The Act itself, including sections 119 and 868, is in the CAMA 2020 text published on CAC's portal.
The annual return, and daily fines
Under section 119, the company must also disclose PSC information in every annual return, and defaulters are liable to fines prescribed by the Commission for every day the default continues.
The annual return is itself a yearly duty. CAMA 2020 says every company must deliver an annual return to CAC at least once every year, but not in its year of incorporation, completed and signed by a director and the secretary. The company may apply to the Commission for an extension of time to file for a given calendar year. Section 425 makes the company and every director or officer liable to a penalty for failing to file, and failing to file for 10 consecutive years is a ground for striking the company off the register.
Because PSC details flow into the annual return, an out-of-date PSC record does double damage: a late notice under section 119, and an inaccurate annual return.
Control and the small-company test
Who controls the company also matters elsewhere in CAMA. Under section 394(3), a company meets the small-company conditions in a year only if, among other things, it is a private company, none of its members is an alien or a government, government corporation or agency or its nominee, and, if it has share capital, its directors between them hold at least 51% of its equity share capital. The turnover and net-asset limits are left out here because the Act and the Companies Regulations 2021 give different tests.
An investor coming in, or a director selling down, can therefore change more than the PSC register. Ask your company secretary to look at both whenever ownership moves.
Filing electronically
Under regulation 3 of the Companies Regulations 2021, documents submitted electronically through the company's own account on CAC's portal, or through the portal account of an agent who needs to be accredited, are deemed duly authenticated. Where physical documents are required, signatories state their full names, telephone numbers, e-mail addresses, the date and their capacities. Documents delivered to the Commission must be in English or translated and notarised.
Collecting signed notices and keeping the record
The seven-day notice from the PSC is the step most often skipped, usually because nobody asks for it. Make it a routine.
Getting it signed. In Achekam, any document can be sent for electronic signature, with signature and initials fields placed on it, signers in order or all at once, an expiry and reminders. The signed PDF and a completion certificate are filed back into Documents. Send the incoming PSC a short written notice of their particulars to sign as soon as their shareholding or rights are agreed.
Keeping it together. Document Centre is a folder-based store where you upload files or whole folders, tag and search them, and a new version of a file keeps the earlier ones. A "PSC" folder holding each signed notice, the CAC-PSC 01 filed and CAC's acknowledgement gives you a register you can show anyone who asks.
A register you keep up to date
| Person | Basis of control | Date became PSC | Notice to company | Notified to CAC | Last change |
|---|---|---|---|---|---|
| Name | Shares, votes or director appointment rights, with percentage | Date | Date signed | Date filed | Date and what changed |
Review the register before each annual return. How the return is filed is covered in the CAC company annual return, and keeping the tax authority's records in step is in updating your company details with the NRS.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
