The Corporate Affairs Commission CAC has released a notice of enforcement of the new Minimum Paid-Up Capital for companies with foreign participation.
The CAC management signed and released the notice on 5th of Dec. 2023.
According to the statement, all companies with “foreign participation” henceforth, must be have N100,000,000 minimum paid-up capital.
The commission said in the release, that the increase is according to the 2020 revised Handbook on Expatriate Quota Administration.
“The commission wishes to notify the General Public that it has in line with the Revised Handbook on Expatriate Quota Administration (2022), commenced the implementation of the requirement of N100,000,000 (One Hundred Million Naira) MINIMUM PAID – UP CAPITAL for companies with foreign participants.”
It also clearly stated that the commission will not process applications from new companies in this category if such companies do not fulfill this requirement.
“Accordingly, any application for incorporation of a company having foreign participation shall not be processed unless it complies with the above requirement,” the statement read.
The commission also gave existing companies a 6months ultimatum to update their paid-up capital status to the required N100,000,000.
The six month ultimatum started counting from December 5 2023, the date of release of the notice.
Non-compliant companies will be forced to shut down.
“Existing companies with foreign participation that have less than 100,000,000 paid – up capital are hereby advised to ensure compliance with the above requirement not later than six (6) months from the date of this notice, failing which the commission shall commence proceedings for the compulsory winding – up of the Companies under section 571(e) of the Companies and Allied Matters Act 2020” the notice specified.
However, certain authorities in legal matters think that, “the guidelines in the handbook do not have a retrospective effect; hence companies with valid subsisting business permits under the old rules are not caught by the new rule.”
Before the review, the minimum issued share capital requirement for companies with foreign interest was N10,000,000 (ten million naira).
