Nigeria (NG)

Jurisdiction Overview

IDQuestionAnswer
472 *LO Update: Is the update of information on the identity of legal owners mandatory? No
 Data Date: 2016

Notes

 
Not all companies are required to update information and compliance is low. Ownership information should be updated with the Corporate Affairs Commission through Form CAC 2A "Return of Allotment. Annual returns are required for submission by all companies and these alert the Commission if there is a disparity between the identity and ownership information on record and in annual returns. Returns are rejected where there is a disparity and companies have to first update identity and ownership information on record. However, compliance with filing annual returns ranged from 3.5% to 7% between 2011 and 2014 (GF 2016: 30). The Nigerian authorities responded to the Global Forum: "the Nigerian authorities state that out of the companies that are active, most of them are domestic small scale family enterprises, membership of which is mainly composed of family members and that the identity and ownership information of these category of companies rarely change. [...] Further, according to Nigerian authorities, the overwhelming proportion of companies and business names/ partnerships in Nigeria is composed of artisans, retailers, general traders, personal service providers and small family businesses which rarely witness changes in ownership. Accordingly, their identity and ownership information remains largely constant. As such, the obligation to update ownership and identity information in respect of these classes of business rarely arises, but fictitiously creating an impression that there is low compliance" (GF 2018: 30). We conclude that legal ownership information is not up to date for all companies.
 
According to the Global Forum, "Changes in the ownership structure of companies limited by shares must also be reported to the CAC on an annual basis, pursuant to section 370 of the CAMA. The annual return by a company having shares other than a small company (which can be companies limited by shares and unlimited companies) must contain the registers of members and debenture holders, and the names and addresses of the persons who became or ceased to be members during the year, and the names of directors and secretary (section 371). Companies limited by guarantee and small companies limited by shares or unlimited companies must also fill in an annual return that indicates the location of the register of members (sections 372 and 373). (Small companies are private companies limited by shares with a turnover below NGN 2 million and net assets below NGN 1 million (EUR 9 614 and 4 807 respectively), whose directors hold not less than 51% of its equity share capital and whose none of the members is a foreigner)" (GF 2016: 28). Therefore, we conclude that small companies are not required to update information.
 
"All incorporated companies must file annual returns under the provisions of CAMA containing updated ownership information (sections 370 to 373)" (GF 2016: 28) and "Other public authorities receive ownership information on the companies they regulate. By virtue of section 54(5) of the Investments and Securities Act, all sales and transfers of shares of a public company must be filed with the Securities and Exchange Commission. Changes in ownership information of public quoted companies must be lodged with the Nigerian Stock Exchange. In addition, changes in share ownership of a public company resulting in transfer of at least 5% of the total voting interest in the company must be filed with the Securities and Exchange Commission (SEC Rule 109A). The Central Bank of Nigeria also holds ownership information about all banks operating in Nigeria" (ibid.).

Sources

GF 2016: 28, 30