NEWS UPDATE – EXTENSION OF DEADLINE FOR COMPANIES WITH UNISSUED SHARE CAPITAL BY THE CORPORATE AFFAIRS COMMISSION
By: Nneka Oduada Eze Esq.
The Corporate Affairs Commission on 16th April, 2021, published a public notice to all Existing Companies, Esteemed Customers and the General Public. The information contained therein is that the Minister of Industry, Trade and Investment has approved an amendment to Regulation 13 of the Companies Regulations, 2021 allowing an extension to the period for complying with the requirements of issued share capital under Section 124 of the Companies and Allied Matters Act 2020 (CAMA) by Existing Companies with unissued share capital up to 31st December 2022.
The said Regulation 13, of the Companies Regulation, 2021, (that provided for the Minimum Issued Share Capital of Existing Companies-now amended) previously provides as follows:
1. Where, at the commencement of the Act, a company has unissued shares in its capital, the company shall not later than 30th June, 2021 fully issue such shares.
2. Notice of issue delivered to the Commission for registration shall be exempted from payment of filing fees.
3. Where a company to which this regulation applies fails to comply with this regulation, the company and every officer of the company shall be liable to a daily default penalty as prescribed by the Commission.
While the second and third leg of the said Regulation 13 still stands, Existing Companies with unissued share capital are advised to take advantage of the extended period to comply with the requirements of issued share capital under the Section.
All Existing Companies are further advised that in line with the definition of “share capital” in Section 868 of the Companies and Allied Matters Act, 2020 as “the issued share capital of a company at any given time”, any share capital of a Company that shall remain unissued after 31st December 2022 shall not be recognized as forming part of the share capital of the Company until the share capital of the Company is fully issued or reduced accordingly.
The General Public, all Existing Companies and Esteemed Customers were further advised to note that any application filed in compliance with Section 124, CAMA after the extended date shall attract the applicable penalty prescribed under the Section and the Companies Regulations 2021.