Businesses Groan as CAC Portal Malfunctions

Businesses and corporate lawyers in Nigeria have been beset by several challenges from the Corporate Affairs Commission (CAC) portal, with pressing transactions coming to a standstill as a result.

There has been significant downtime on the portal, which barely functions for more than an hour per day.

“The portal is usually inaccessible during the day,” said an Abuja-based lawyer, who asked not be identified. “I have had to wake up in the early hours of the morning to conduct transactions because I believe the traffic would be lighter on the platform.”

“Young and emerging Nigerian entrepreneurs have been hit the most. Their hopes are being dashed everyday by the ineptitude of people at CAC and no one in government seem to care,” Tivie Michaels, Niger Delta activist and lawyer, said.

Recently, President Muhammadu Buhari signed into law the Business Facilitation Act, which is aimed at resolving several regulatory issues that have plagued the business environment to improve the ease of doing business in Nigeria.

Several users of the portal also complained about constant error messages or unscheduled site maintenance notifications.

“Prior to this, stakeholders were informed of the site maintenance schedule ahead of time; however, now there are several unscheduled maintenance,” the Abuja-based lawyer said.

The Revised Service Timelines posted on the CAC website says that new registrations of companies – business names, companies and incorporated trustees entities – would be registered within 24 hours of the upload of all relevant documents or compliance with any queries raised.

However, a partner at a mid-sized law firm based in Lagos, told BusinessDay that for over a week, he had not been able to complete the application process for registering a company on the portal because he was unable to input the required information. He said that at other times, his firm had received a ‘User Not Found’ notification when attempting to register a company on the portal. According to him, they have operated their account with CAC for over four years.

It was gathered that the issues with the portal are most exacerbated with post-incorporation transactions. According to the CAC Revised Timelines, most post-incorporation matters would be completed within three days. However, many applications remain incomplete for up to three months without any queries or justification from CAC.

“Post-incorporation information, especially directors’ and secretaries’ information, are often missing or incorrect even when they have been uploaded,” a partner at a corporate commercial law firm said.

Another user who requested to be anonymous said: “I have updated the list of directors on a client account – removed the old directors and uploaded the information on the new ones while preparing a document for approval at the Securities and Exchange Commission (SEC). During the approval process at SEC, the old directors were still active on the client’s account.

“I had to write an application to CAC for the update to be effected. And it took over nearly two weeks of constant reminders and visiting CAC to have the issue resolved. Meanwhile, the client’s transaction was still pending.”

The CAC operates a ticketing system for resolving complaints or issues from users. Once registered, the complainant gets an automated email acknowledging the complaint.

Several users said the average timeline for resolving a complaint is two months, with some lamenting that tickets as far back as 2022 remain unresolved. According to the CAC Revised Timelines, all complaints are to be resolved within 72 hours.

“To get an issue resolved, multiple reminders have to be sent, physical visits made or you must have a direct line to someone within the commission,” the user said.

A critical issue that has subsisted since the inception of the platform is the automatic application of late fees when Annual Returns applications are filed. The Companies and Allied Matters Act requires companies to file Annual Returns within two weeks of their first Annual General Meeting (AGM) of the year.

“CAC requires companies to file Annual Returns of the previous year by January and it is rare for most companies to hold an AGM in January. Thus, all applications are automatically deemed to be late even if they comply with the provisions of CAMA,” the user said.

Another issue with payments on the portal is encountered when conducting a search on a company.

A lawyer at a full-service law firm in Lagos highlights this problem. “When performing a search on an existing company, the payment made regarding the search can only be used once. So if a user mistakenly leaves the page to which (s)he is redirected after payment, the payment becomes useless, and they have to pay again to access the information.”

The latest addition to the series of issues is the valid form of identification for the portal. Previously, CAC had stated that the National Identification Number (NIN) is the only valid form of identification for accessing the portal and incorporated this with an Auto Fill component on the user interface. Recently, it announced that other forms of identification are “valid until further notice.” However, the portal only accepts NIN to date.

Speaking on the possible causes, one lawyer said: “The portal is not optimised for its current tasks. During Azinge’s tenure, the portal was used for pre-incorporation matters alone, now it is also used for post-incorporation matters as well.”

He is of the view that the Special Processes Office, which is in charge of resolving issues with company records, is understaffed.