By MICHAEL DUGERI
The context
Under the Companies and Allied Matters Act (CAMA) 2020, companies may be removed from the register of companies maintained by the Corporate Affairs Commission (CAC) through two distinct mechanisms: voluntary striking off, initiated by the company itself, and administrative striking off, initiated unilaterally by the CAC. Both procedures result in the dissolution of the company and the loss of its legal personality, but they operate outside the more formal and creditor-focused process of winding up, which involves court or creditor oversight, asset realisation, and liability settlement under Part XVIII of the Act.
Although striking off and winding up both result in corporate dissolution, they are doctrinally distinct. Striking off is administrative and (and arguably) procedurally shallow, while winding up is judicial, comprehensive, and creditor-focused. Their co-existence within CAMA, without a harmonising framework, creates legal uncertainty regarding the treatment of assets, the fate of creditor claims, and the finality of corporate death. But this piece is on administrative striking off procedure under Section 692 of CAMA rather than the doctrinal and practical tension between striking off and winding up under Nigerian company law.
Administrative striking off by the CAC
While deficiencies exist in the regime governing voluntary striking off (which is also outside the scope of this piece), the situation is arguably more problematic in cases of administrative striking off initiated by the CAC. Section 692(3) of CAMA0 allows the CAC to strike off a company if it has “reasonable cause to believe” that the company is not carrying on business or has not been in operation for 10 years. This action can be initiated without any formal application from the company. In such cases, the CAC may strike a company off the register without any formal application from the company, based on its failure to file annual returns or its presumed dormancy. The legal and procedural framework surrounding this administrative action is sparse and lacks essential safeguards to protect third-party interests.
While voluntary striking off requires a company to confirm that it has ceased operations and discharged all obligations (offering some nominal protection to creditors) administrative striking off under Section 692 can proceed without any substantive inquiry into the company’s legal or financial status. Critically, it does not require notice to known creditors, verification of outstanding liabilities, or any form of asset declaration. It is argued here that administrative striking off is the more problematic of the two, as it lacks basic procedural safeguards and exposes third parties to unresolved claims and legal uncertainty.
How Nigeria’s company removal process falls short
One of the most concerning aspects of administrative striking off under Section 692 of CAMA is the absence of any requirement for the CAC to conduct a review of a company’s assets or outstanding liabilities prior to removal from the register. The process operates largely on the assumption of dormancy or prolonged non-compliance, with no mechanism in place to verify whether the company has unresolved creditor claims, pending contractual obligations, or undisclosed assets. This regulatory vacuum opens the door for inadvertent or even strategic avoidance of liability.
Compounding this issue is the inadequacy of the notice procedure prescribed by the Act. Although the CAC is required to publish a notice of its intention to strike off a company in the Federal Government Gazette, this mode of notification is ineffective in practice. Most creditors, contractual counterparties, and regulatory bodies are unlikely to monitor gazette publications regularly. In the absence of a statutory obligation to notify known creditors or other stakeholders directly, these parties are effectively denied the opportunity to object, assert claims, or take pre-emptive legal action before the company is dissolved.
The framework also fails to address the disposition of residual assets post-dissolution. Unlike jurisdictions such as the United Kingdom (where unclaimed assets of a struck-off company automatically vest in the Crown as bona vacantia) CAMA is silent on what becomes of company property once legal personality is extinguished. This lack of guidance creates significant legal uncertainty and exposes company assets to misappropriation or informal appropriation by insiders without regulatory oversight or accountability.
Although Section 694 of the Act permits restoration of a struck-off company by court order, this mechanism is inherently reactive. It places the burden on aggrieved parties (creditors, shareholders, or other stakeholders) to initiate costly and time-consuming litigation in order to revive a company’s legal existence. There is no administrative restoration pathway and no provision for automatic suspension of the striking-off process where third-party interests are credibly implicated. This renders the process not only procedurally rigid but also substantively inadequate as a means of safeguarding legitimate interests.
Finally, the reliance on documentary non-compliance (such as the failure to file annual returns) as the basis for striking off risks arbitrary or inappropriate removals. Companies that remain operational but fail to meet filing requirements may be struck off despite having ongoing legal relationships or financial obligations. In the absence of a robust vetting mechanism to assess actual dormancy, administrative striking off becomes an overly formalistic exercise that may extinguish legal personality while commercial activities or liabilities persist.
The net effect is that the Nigerian framework lacks the institutional checks and predictable outcomes necessary to ensure that striking off does not become a tool for evading obligations. The current legal architecture prioritises administrative efficiency at the expense of creditor protection and corporate accountability. To align more closely with international best practices, there is a compelling need for reform, including mandatory asset declarations, creditor notification procedures, and clearer rules on the treatment of residual assets following dissolution.
A Safer Exit: The UK’s approach to administrative striking off
The United Kingdom’s approach to administrative striking off under the Companies Act 2006 provides a model of structured dissolution that balances regulatory efficiency with stakeholder protection. Governed primarily by Sections 1000 and 1001 of the Act, the process allows the Registrar of Companies to strike off a company that appears to be no longer carrying on business. However, unlike Nigeria’s counterpart regime under CAMA, the UK system incorporates clear procedural safeguards and statutory obligations that significantly reduce the risk of inadvertent or abusive dissolutions.
A defining feature of the UK process is its strong emphasis on stakeholder notification and engagement. When the Registrar intends to strike off a company, notices must be sent not only to the company’s registered office and its directors, but also published in the official Gazette. This dual-notice mechanism ensures that creditors, employees, shareholders, and other interested parties are placed on notice of the impending dissolution. Crucially, the law expressly allows these stakeholders to object to the striking off within a statutory window. The Registrar is required to halt or suspend the process if any objections are received, especially where the objector demonstrates that the company remains operational, holds assets, or has outstanding liabilities.
In contrast, Nigeria’s administrative striking off under Section 692 of CAMA suffers from both legal and practical deficiencies. The only statutory requirement is that the CAC publish a notice of its intention to strike off the company’s name in the Federal Government Gazette. There is no legal obligation to notify known creditors, directors, or shareholders directly, nor is there a structured process for objections. While Section 692(3) allows for “cause to be shown” within 90 days, the Act provides no guidance on how such cause may be presented or how it must be considered by the Commission. The result is a procedure that is formally open to challenge, yet functionally inaccessible to those most likely to be affected.
The treatment of undistributed or unclaimed assets also reflects this disparity. In the UK, residual assets of a struck-off company automatically vest in the Crown as bona vacantia under Section 1012 of the Companies Act 2006. This not only preserves assets from misappropriation but also provides a legal framework for asset recovery if the company is restored. Nigerian law, by contrast, is silent on the fate of residual assets, creating a legal vacuum in which assets may be informally appropriated by insiders or lost without trace.
Although CAMA provides that the liabilities of directors, officers, and members may survive striking off, this provision is thinly developed and practically difficult to enforce. Unlike in the UK, where remedies for post-dissolution enforcement are well-established and administratively accessible, enforcement in Nigeria is largely dependent on litigation, and there is no administrative restoration procedure. Section 694 permits restoration only by court order, placing a significant procedural and financial burden on aggrieved parties seeking redress.
The UK system offers flexible and well-defined pathways for restoring struck-off companies. Administrative restoration, governed by Sections 1024–1028 of the Companies Act 2006, allows a company to be restored without resorting to litigation, provided certain conditions are met, such as the company being struck off for non-compliance rather than misconduct, and the application being made within six years. In more complex cases, court-ordered restoration under Sections 1029–1032 provides a broader remedy for creditors, regulators, or other interested parties. In both scenarios, restoration has retrospective legal effect, meaning the company is deemed to have continued in existence as though it had never been struck off, thereby preserving legal relationships, obligations, and rights.
In Nigeria, both administrative and court-ordered restoration options are available, although only the latter is expressly provided for in Section 694 of CAMA 2020. The administrative route has emerged through CAC’s regulatory practice and is typically available in non-contentious cases, particularly where a company was struck off for failure to file annual returns. In such instances, the company may be reinstated by filing all outstanding returns, paying prescribed fees and penalties, and showing intent to resume or continue business. However, for creditors, shareholders, or third parties seeking to challenge a striking off, court-ordered restoration remains the primary formal remedy, and while it also carries retrospective effect, the procedural burdens, costs, and lack of an accessible objection mechanism before dissolution often frustrate timely redress. As a result, Nigeria’s restoration framework, though improving, still lacks the accessibility and legal clarity that characterizes the UK system.
Taken together, these differences reveal that the UK’s administrative striking-off framework is designed not merely as a registry management tool, but as a regulated exit mechanism that respects the rights of third parties and safeguards undistributed assets. Nigeria’s current approach under CAMA, by contrast, is marked by institutional opacity, weak procedural protections, and limited avenues for creditor intervention. While both jurisdictions share the goal of cleaning the corporate register, only the UK offers a “safe exit” that balances that objective with legal certainty and corporate accountability.
It is worth noting that CAMA provides for a 90-day waiting period between the CAC’s publication of a notice of intention to strike off a company and the actual removal from the register. This period, while procedurally valuable, is often criticized as ineffective due to the exclusive use of gazette publication, which is unlikely to be seen by affected creditors or counterparties. From a technical standpoint, however, this waiting period may serve as a minimal safeguard, giving vigilant creditors an opportunity to intervene. Moreover, CAMA allows for court-ordered restoration under Section 694, and a restored company is deemed to have continued in existence as if it had not been struck off. This retrospective continuity may enable creditors to revive enforcement rights, provided they act within the relevant limitation period for debt recovery (generally six years for simple contracts and twelve years for contracts under seal).
While these features offer a potential counter-argument to the claim that administrative striking off leaves creditors without recourse, they are ultimately reactive and procedurally onerous. The absence of direct creditor notification, verification of liabilities, and post-dissolution asset management rules continues to expose third parties to significant legal and financial uncertainty. Furthermore, CAMA is silent on the fate of residual assets upon striking off, unlike the UK’s bona vacantia rules, which vest such property in the Crown to prevent misappropriation.
Bridging the gap: Reforming Nigeria’s striking-off framework
To align more closely with international best practices, Nigeria’s legal framework for striking off companies be further reformed to incorporate stronger procedural safeguards and more transparent dissolution mechanisms. The current regime under CAMA, particularly in respect of administrative striking off, prioritizes regulatory efficiency at the expense of creditor protection and legal accountability. Without corrective legislative action, the process will continue to expose third parties to unnecessary risk and enable companies to exit the register with unresolved obligations.
To strengthen third-party protections, CAMA should require companies facing striking off, whether voluntary or administrative, to file a statement of assets and known liabilities. While enforcement may be challenging in cases of prolonged non-compliance, the CAC could operationalise this through a final notice requiring disclosure, with non-response formally recorded to support post-dissolution liability if assets later surface. In parallel, the law should impose a duty on the CAC to notify known creditors and other stakeholders identifiable from public records, granting them a clear right to object before dissolution. As in the UK, where creditor objections can halt the process, these reforms would ensure that striking off is not simply administrative but reflects procedural fairness and accountability.
However, the effectiveness of such notice provisions is constrained by a key practical challenge: companies subject to administrative striking off are often non-operational, unresponsive, and disengaged from regulatory oversight. In these cases, expecting compliance with additional disclosure or notification obligations, such as filing a list of creditors, is often unrealistic. While it may seem ideal to require companies to disclose their creditors before striking off, in practice, dormant companies are unlikely to respond, and the CAC has limited visibility into undisclosed liabilities or ongoing obligations.
Given these limitations, the law must aim for a balanced and workable approach. One option is to place the statutory duty of disclosure on the company, with the CAC obligated to notify only those creditors who are identified by the company or reasonably ascertainable from public records, such as charge-holders or parties to recent litigation. To enhance accessibility, CAC regulations could also mandate that notice be delivered through verifiable and publicly accessible channels, such as electronic notifications via the CAC portal, rather than relying solely on Gazette publications.
Ultimately, these measures, while useful, do not resolve the deeper structural weakness of administrative striking off: it is a blunt regulatory tool that equates prolonged non-engagement with true dormancy, without any independent verification of the company’s financial or legal status. To address this, the law should adopt a more cautious, risk-based approach. The CAC should be empowered to assess whether there are signs of continued activity, such as recent tax filings, active bank accounts, registered charges, or pending disputes. Where such indicators exist, striking off should be deferred or redirected to court-supervised winding up, rather than proceeding administratively.
This layered approach acknowledges the practical limitations of enforcement against defunct companies, while also minimizing the risk of premature or inappropriate dissolution that could prejudice creditors or other stakeholders.
Additionally, CAMA should be amended to provide clear and enforceable rules on the treatment of residual assets. Where a company is struck off while holding property, the law must specify whether such property is to vest in the state, as is the case under the UK’s bona vacantia doctrine, or held in trust pending restoration. The current silence on this issue creates legal ambiguity and facilitates informal appropriation or loss of assets without recourse.
A comprehensive reform package along these lines would not only enhance the integrity of Nigeria’s corporate registry but also bring the country’s dissolution procedures into alignment with internationally accepted standards of corporate governance and creditor protection.
Conclusion
The administrative striking off procedure under Section 692 of CAMA suffers from a lack of procedural safeguards, stakeholder engagement, and asset oversight. It exposes third parties to significant risk by enabling the dissolution of companies without ensuring that obligations have been met or that residual assets are properly addressed. To align with international standards, Nigeria’s corporate law framework requires a comprehensive overhaul of both voluntary and administrative striking off procedures, with enhanced notice requirements, asset accountability mechanisms, and clear provisions for post-dissolution claims and recoveries.
•Michael Dugeri is an Advisor, Digital Policy, at Canadian Bankers Association.
