The Corporate Affairs Commission (CAC) has removed more than 400,000 inactive companies from Nigeria’s corporate register in 2025, marking the largest clean-up exercise in its history.
The Registrar-General of the Commission, Hussaini Magaji, disclosed the development in Abuja during activities marking the agency’s 35th anniversary.
He explained that most of the affected entities had failed to file statutory annual returns for several years and were no longer operational.
He said, “In 2025 alone, we deregistered over 400,000 companies from our records. These were largely companies that had become inactive and failed to meet statutory obligations, including filing annual returns.
“Such entities pose threats to economic operations. Cleaning up the register was necessary to build confidence and ensure that Nigeria has a credible and reliable corporate registry.”
According to the Commission, maintaining a transparent and up-to-date corporate database is essential to attract local and foreign investment and to prevent the misuse of corporate structures for illicit activities.
Why were the companies delisted
The deregistration exercise is backed by the provisions of the Companies and Allied Matters Act 2020, commonly known as CAMA 2020.
The law requires all registered companies to file annual returns to confirm that they remain operational and compliant.
Where a company fails to meet this obligation, the Commission is empowered to issue notices and ultimately strike the company off the register.
Once delisted, a company loses its legal standing and may face serious challenges operating bank accounts, entering into contracts, or enforcing legal rights.
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In effect, it is treated as dissolved and ceases to legally exist, although directors’ liabilities can still be enforced.
In a February 11 post, Lagos-based law firm Osuntuyi & Tokan-Lawal Law stressed the importance of compliance.
“We strongly advise business owners, directors, trustees, and professional advisers to ensure that annual returns are promptly filed with the CAC for all Business Names, Companies, and Incorporated Trustees to avoid delisting and potential legal complications,” the law firm stated.
The 2025 exercise signals that regulatory compliance is now being strictly enforced and that dormant or non-compliant entities are at real risk of removal.
Delisting trend — a clear shift in enforcement
The mass strike-off follows a steady tightening of enforcement over the past several years.
Between 2017 and 2019, the Commission removed about 40,000 dormant companies in an earlier clean-up exercise.
Enforcement intensified after CAMA 2020 strengthened the CAC’s powers to strike off companies that fail to comply with statutory requirements.
In 2023, the Commission announced plans to delist 91,843 companies for non-compliance.
In 2024, it issued further public notices to companies that had failed to file annual returns for several years.
The 2025 action, which ultimately saw more than 400,000 companies removed, represents a dramatic increase in scale and signals a much tougher enforcement posture.
What the law says
Section 692 of CAMA 2020 provides the legal framework for voluntary and compulsory strike-off of companies.
Under Section 692(3), the law states:
“Where the Commission observes or has reasonable cause to believe that a company is not carrying on business or has not been in operation for ten years or has not complied with provisions of this Act for a consecutive period of 10 years, the Commission may cause to be published, in at least three national daily newspapers, a notice of its intention to strike off the company from the register.
Section 692(4) further provides:
“Where the Commission does not, within 90 days of the last publication, receive any response from the company that it is carrying on business or in operation, it may strike off the name of the company.”
Even after a company has been struck off, directors and members may still be held liable under the law.
Subsection 6 also provides an avenue for restoration, stating:
“Any company, member or creditor aggrieved by the striking off from the register under subsection (4) may apply to the Court, at any time before the expiration of 10 years from the publication of the notice under subsection (5), for an order restoring the company to the register…”
Under these provisions, companies struck off voluntarily may apply for restoration within two years, while those struck off compulsorily have up to 10 years to seek a court order for reinstatement if they can demonstrate that the company was active or that there is just cause for restoration.
Concerns about business conditions
While the Commission maintains that the clean-up is necessary to ensure the credibility of Nigeria’s corporate registry, concerns have been raised about the broader operating environment for businesses.
Speaking to Pinnacle Daily, the Chief Executive Officer of De-SME Facilitators Limited, Anthony Chinwe, acknowledged that the rules exist and that companies were likely given time to comply before being delisted.
However, he expressed concern about the pressure facing businesses, and most especially the small and medium-sized enterprises (SMEs).
He said, “You know SMEs in our client, you find them struggling with power, because some of them buy their diesel, their fuel to operate. You also find some of them maintaining the roads that lead to their companies, particularly the manufacturing ones.
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“They have to maintain the road by themselves. They sink their borehole because there’s no water. They also contend with security, making security arrangements for themselves.”
Chinwe stressed that most SMEs in Nigeria find it difficult to compete with their counterpart, elsewhere, maybe in Ghana, for instance, or some other countries.
“So, the environment is a bit harsh for SMEs, considering what they go through in Nigeria, from that perspective, I think maybe the government should have heard a bit,” he added.
According to the Presidential Enabling Business Environment Council (PEBEC), in 2025, Nigeria saw improvements in ease of doing business at the state level, with Lagos and Kaduna leading in digital services, streamlined procedures, and investor facilitation, though many states still faced infrastructure and regulatory challenges.
Globally, Nigeria’s business environment remained moderate, with legacy World Bank data showing it lagged behind peer economies due to inconsistent regulations, power shortages, and logistics issues, despite ongoing reforms.
What it means for businesses, investors
For regulators, the deregistration exercise is about strengthening transparency and maintaining a credible corporate registry.
For investors, it signals a cleaner database and tighter oversight, and for business owners, it serves as a clear warning that statutory filings must be kept up to date or companies risk losing their legal existence.
Overall, the scale of the 2025 strike-off suggests that compliance is no longer treated as routine paperwork but as a core requirement for remaining in business.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
