The Corporate Affairs Commission (CAC) has issued a compliance directive via a public notice dated 29th July 2025 on X, requiring companies to file their Annual Returns and update records of Persons with Significant Control (PSC) and Beneficial Ownership (BO) within 90 days. Companies failing to meet these obligations face the risk of being struck off the register.
Pursuant to section 692(3) CAMA 2020, the CAC has the discretion to strike off by October 28,2025 companies who have neither carried on business or been in operation in the last 10 years from its register and by implication have never complied with the requirements of filing annual returns. However the notice also mandates companies that are yet to update their PSC or BO information to do so within 90 days. Company secretaries, solicitors and/or compliance officers are expected to visit the CAC website to confirm the standing of their organisations and regularise their position accordingly if in default before the deadline.
We also note that, Section 119(5) of CAMA 2020 clearly stipulates that the consequence for non-disclosure of PSC/BO information is a fine, not deregistration. The Act intends for non-compliance with PSC/BO disclosure requirements to be sanctioned through financial penalties, not company delisting. Therefore, applying a blanket strike-off risk to all non-compliant companies—could be viewed as exceeding the provisions of section 119(5) CAMA 2020.
Why Filing Annual Returns and Updating PSC/BO Matters
Filing Annual Returns ensures that the CAC maintains an accurate record of a company’s financial standing, governance structure, and operational continuity. It is a basic but essential indicator of corporate health.
Updating PSC and BO information plays a critical role in advancing transparency. It allows regulators and stakeholders to identify those who truly control or benefit from the company—either directly through voting rights and governance roles or indirectly through economic interests hidden behind proxies, trusts, or nominee arrangements. This aligns Nigeria’s corporate reporting framework with international anti-money laundering and counter-terrorism financing standards.
Understanding PSC and BO under CAMA 2020
Under Section 119 of CAMA 2020, a Person with Significant Control (PSC) is anyone who:
(i) Directly or indirectly holds more than 5% of the company’s shares or voting rights;
(ii) Has the authority to appoint or remove a majority of the board of directors; or
(iii) Exercises significant influence over the company’s decisions and management.
On the other hand, Beneficial Ownership (BO), inferred from section 119(3) applies to individuals who will benefit from the company’s assets upon dissolution or profits, even if they do not appear on official records. This includes those entitled to over 5% of the company’s profits or assets upon dissolution, or those exerting influence through nominee shareholder (where shares are held on behalf of actual owner) and trust and proxy arrangements (delegation of control or benefits without legal ownership).
While PSC focuses on governance influence, BO centers on economic benefit and hidden control. The two often overlap, but not all BOs are PSCs, especially where influence is indirect.
Implications for Compliance and Corporate Reputation
Beyond regulatory obligations, compliance demonstrates a company’s commitment to transparency, legal responsibility, and ethical governance. It helps build investor confidence and strengthens a company’s market credibility. Conversely, the notice states that failure to comply—whether by omitting Annual Returns or neglecting PSC/BO updates—exposes the business to penalties, loss of investor confidence, and potentially deregistration.
Conclusion
While the CAC’s efforts to enforce corporate compliance with respect to annual returns filing are necessary and aligned with CAMA 2020, the implementation of the ultimatum notably addresses the different categories of default i.e companies that have yet to comply with annual returns filing requirements and also those that are yet to update PSC/BO information, backed by the legal penalties delisting. Regulatory enforcement must be both firm and legally sound, hence default in updating PSC/BO information should not be addressed the same way as default in filing annual returns as the Act provides different consequences for each default category.
Nevertheless, companies are encouraged to review their filings and promptly update the requisite outstanding information prescribed to avoid sanctions and preserve their legal status before the due date.
Written by Adeola Osifeko LLB, BL, LLM, ACIS, ABR. She can be contacted on 07074453571 and adeola@aeolawpractice.com.
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