Latest Update: CAC Strikes Off Over 400,000 Dormant Companies for Regulatory Violations

The Corporate Affairs Commission (CAC) has officially deregistered more than 400,000 inactive and non-compliant companies across Nigeria in 2025, marking one of the most significant corporate clean-up exercises in the country’s history.

The decision forms part of the Commission’s broader effort to strengthen corporate governance, improve transparency, and ensure that Nigeria’s official business register reflects only active and compliant entities.

According to the CAC, the affected companies failed to meet key statutory obligations required under Nigerian law, particularly the consistent filing of annual returns and the maintenance of up-to-date company records.

Why the CAC Took This Action

Under the Companies and Allied Matters Act (CAMA) 2020, every registered company in Nigeria is legally required to file annual returns and disclose accurate ownership and operational information. Companies that repeatedly default on these obligations are considered dormant or non-compliant.

The CAC explained that many of the deregistered firms had been inactive for several years, with no evidence of business operations or regulatory compliance. Retaining such entities on the corporate register poses risks, including the potential misuse of company identities for fraudulent or illegal activities.

By removing these companies, the Commission aims to create a more reliable and transparent corporate database that can be trusted by investors, regulators, and financial institutions.

Impact on Businesses and the Economy

The mass deregistration sends a strong signal to businesses operating in Nigeria that regulatory compliance is not optional. Companies that ignore statutory requirements risk losing their legal status, which can prevent them from entering contracts, accessing loans, or participating in government and private sector opportunities.

For investors, the move improves confidence in Nigeria’s business environment by ensuring that only legitimate and compliant companies remain officially recognised. A cleaner corporate register also aligns Nigeria with international best practices in corporate governance and transparency.

Support for Legitimate Businesses

While enforcing compliance, the CAC has also emphasized its commitment to supporting genuine entrepreneurs and small businesses. In 2025, the Commission partnered with relevant agencies to facilitate free business registrations for hundreds of thousands of small and medium-scale enterprises.

The CAC also highlighted the success of its fully digital registration and compliance platform, which allows businesses to register, file returns, and update company records online. This digital transformation has reduced delays, improved efficiency, and lowered the cost of compliance for businesses across the country.

What Companies Should Do Going Forward

The Commission has advised all registered companies to regularly review their compliance status and ensure that statutory filings are up to date. Companies that have been deregistered may be eligible for reinstatement, provided they meet the required conditions and settle outstanding obligations within the stipulated timeframe.

Business owners are encouraged to take corporate compliance seriously, as failure to do so could result in permanent removal from Nigeria’s official business register.

Conclusion

The deregistration of over 400,000 companies in 2025 represents a decisive step by the Corporate Affairs Commission to sanitise Nigeria’s corporate space. By enforcing compliance while supporting legitimate businesses through digital reforms and registration initiatives, the CAC is working to build a more transparent, credible, and investor-friendly business environment.

For companies operating in Nigeria, the message is clear: maintaining compliance is essential for credibility, sustainability, and long-term success.