Why are companies delisted?
All companies in Nigeria, asides being expected to be registered with the Corporate Affairs Commission (CAC), are mandated by the Companies and Allied Matters Act to file their annual reports with the commission.
The CAC has within the last couple of years, delisted thousands of companies due to irregular or non-filing of their annual returns.
Annual report is a comprehensive report on a company’s activities throughout the preceding year and it is a way of making the CAC aware that your company is still carrying on business.
As the name implies, it is expected by the commission to be filed annually, as it gives information regarding any post incorporation changes that have been effected by the Company. It is thus very important and continuous failure to adhere may be taken as an indication by the CAC that the company no longer carries on business and may therefore result in the company being struck off /delisted from the register of members.
EFFECTS OF BEING DELISTED
- These companies no longer are regarded as legal registered entities and lose all privileges so accorded them by law.
- They cannot carry on business as legal entities in Nigeria
Note that Companies that have been delisted have a grace period of 20 years within which to register before they will be regarded as being automatically dissolved.
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