Guardian

CAC overhauls registration of companies

COMPANIES and organisations, which operations hurt the environment, may henceforth find it difficult to get loans from seven Nigerian banks.

Under a new lending principle, which the banks signed at the weekend in Lagos, the banks will now assess the environmental and social responsibilities of the companies before their request for loans are considered.

The new lending standards are aimed at preventing loans to businesses, which activities wreck the ecosystem, especially oil companies, which have failed to meet local and international safe environmental standards.

Also, the Corporate Affairs Commission (CAC) has issued fresh regulations for registration of companies.

The rules are designed to prompt an efficient registry that keeps accurate and reliable companies’ records and with enforcement capability.

The commission has also launched a campaign against unregistered businesses in the country and an enforcement drive to sensitise banks on the registration of unsecured loan facilities.

At a training workshop for journalists in Keffi, Nasarawa State at the weekend, Registrar-General of CAC, Mr. Bello Mahmud, said some of the reforms embarked upon by the commission had started to take shape.

The banks, which signed the new lending principle, are Access Bank Plc, Citibank Nigeria Limited, Diamond Bank Plc, First Bank of Nigeria Plc, Guarantee Trust Bank Plc, Stanbic IBTC Plc, Standard Chartered Bank and Zenith Bank Plc.

In a statement they jointly issued at the weekend in Lagos, the banks said, “as lenders to business in Nigeria’s financial sector, we believe that the successful companies of the future will be those that recognise environmental and social responsibilities while also discharging their economic responsibilities.

“We understand that as agents of the flow of capital between economic units in Nigerian economy, we are in the privileged position to make positive contributions towards the development of the country.

“We are committed to corporate sustainability, which means transparently managing our responsibilities for environmental stewardship, social well-being and prosperity over the long-term, while being held accountable to our shareholders.”

The banks disclosed that they are preparing and activating a set of sustainable lending principles known as “The Nigeria lending principles” within six months, developing internal capacity and working with relevant stakeholders “to establish our individual capacity to manage our environmental and social responsibilities.”

One of the banks’ chiefs told journalists that the approach would enhance innovations and change the mindset of companies’ directors before they would walk into any bank to borrow money for their businesses.

He added that oil companies and other firms, which want to borrow from Nigerian banks, must henceforth know that there are certain standards such as adjusting, controlling and managing their environment to be met before such facilities are granted.

“We will as operators see that we even deal with the international banks on this. The principle is that Nigerian banks have a balance sheet that’s taken from the savings of Nigerians and that money should not be used to finance businesses that contribute to the degeneration of the environment,” he added.

Represented by the Head of Public Relations, Mr. Churchill Williams, the CAC boss said in spite of the setting up of offices in the 36 states of the federation and other efforts made to ease the registration of businesses, many Nigerians still carry on businesses without registering them.

“This has created opportunities for unscrupulous elements to use such unregistered businesses to defraud unsuspecting citizens and prospective foreign investors, thereby promoting all manner of criminal practices. The commission finds this unacceptable and a trend contrary to the Companies and Allied Matters Act (CAMA) establishing it. In order to stem the practice, the commission has made arrangements in its state offices to simplify and ease the registration of companies,” he said.

Mahmud charged such companies to take advantage of the new window to register their businesses and operate legally, “as the commission will soon take steps against unregistered business operators and make them to face the consequence of the law. In addition, the commission is liaising with contract awarding bodies both in the public and private sectors to further enforce the practice of confirming the status of companies before contracts are awarded.

“For the avoidance of doubt, let me reiterate that individuals are allowed to register their business names and incorporated trustees (NGOs) by themselves if they wish to do so. For the incorporation of limited liability companies, members of the public are advised to seek the services of lawyers, chartered accountants or chartered secretaries.”

In a lecture at the ceremony, Special Assistant to the Registrar-General, Alhaji Garuba Abubakar, said the new regulations awaiting the official announcement of the board would require all directors of companies to henceforth provide acceptable form of national identities before they can register their firms.