OPINION: When citizens start thinking of burying money in backyards

By: Tony Okafor

Recently, there were widespread complaints of freezing of associations’ accounts in some banks without the owners’ knowledge or authorisation.

The banks had reportedly claimed that their actions were based on instructions from the Central Bank of Nigeria(CBN) to do so to accounts of organisations not registered with the Corporate Affairs Commission(CAC).

While this piece is not aimed at interrogating the propriety or otherwise of the actions of the banks, it is pertinent to state categorically that things that will discourage people from embracing seamless banking habits at a time like this should be discouraged. It will be a manifest absurdity in a 21st century world to compel people to start burying their cash and other valuables in their backyards as a way of saving them because of stringent policies and rules.

Corporate Affairs Commission (CAC) is one of the federal government agencies in-charge of registration, management and dissolution of corporate entities in Nigeria. There are other government agencies that can register or create corporate entities in the country. They include: The federal and the state legislations for creation of government owned corporations and corporate bodies, like CAC, Central Bank of Nigeria and state boards/commission, Federal Department of Cooperatives of the Federal Ministry of Labour and its equivalents in states and Local Government/Area Councils for formation/registration co-operative societies and the Nigeria Export Processing Zones Authority for Free Zone Registration of entities and the Independent National Electoral Commission (INEC) for formation and registration political parties.

There are three corporate entities that can be registered in the Corporate Affairs Commission and they are companies, business names and Incorporated Trustees for associations, societies, religious institutions and not-for-profit organisations

However, by Companies and Allied Matters Act( CAMA) that created and governs the CAC, there are some business names that need not to be registered.

It is legal and lawful to operate business names and any incorporated trustees for associations, societies, religious institutions, clubs, fora, groups, committees, charities, foundations, not-for-profit organisations and non-governmental organisations without registering them with or at the Corporate Affairs Commission (CAC). It is not mandatory to register them, although the benefits of registration are enormous.

However, unlike business names and incorporated trustees, it is mandatory to register companies, including foreign companies, unless the President of Nigeria issues an exemption.

The types of business names that need not to be registered for them to be legal and lawful, are: 1)The business name of a firm, if the business name consists of the true surnames of all partners without any addition other than the true forenames of the individual partners or the initials of such forenames.

2) The business name of an individual, if the business name consists of his true surname without any addition other than his true forenames or the initials thereof.

3) The business name owned by any corporation (whether registered with the CAC or not), if the business name consists of its corporate name without any addition.

The above cited examples will not be required to be registered, even where there are other additions to the names, so far as some conditions precedent and subsequent, are observed. Such conditions are not like rocket science. They are simple to be fulfilled under the guide of a professional or an experienced person.

On the part of Incorporated Trustees, that is: associations, societies, religious institutions, communities, clubs, fora, groups, committees, charities, foundations, not-for-profit organisations and non-governmental organisations, registration is optional. The law gives room for groups of persons to exist without being a corporate body.

However, if the persons appointed as the Trustees (ie, Managers) of a group, wish to register their group as a corporate body, the CAC will allow such, provided there is a written authority from the group. It is understood that in exercise of the freedom of association enshrined in the Constitution of Nigeria, people are free to associate and form groups. No one needs the consent of CAC to associate and form groups, unless one wants such group to become a corporate body.

Nigerian laws recognise Unincorporated Bodies as well as Incorporated Bodies
The Incorporated bodies/entities are bodies that have sought and obtained registration with government or any approved agency of government and have become corporate bodies. The Unincorporated Bodies also known as Corporation Aggregate, are opposite of the incorporated bodies, they are lawful although not registered as a single corporate entity under any law in Nigeria.

Flowing from the explanations supra, it is clear that CAC is not the only government agency for creation and registration of corporate bodies. Some types of business names can exist and operate without being registered with or created by the CAC or any government agency.

Also, groups, including, associations, societies, religious institutions, communities, clubs, fora, groups, committees, charities, foundations, not-for-profit organisations and non-governmental organisations do not need to be registered with the CAC. They are naturally legal and lawful, so far as they are not secret societies.

Tony Okafor is a journalist


Ifeizu is a seasoned journalist and Managing Editor of TheRazor. He has wide knowledge of Anambra State and has reported the state objectively for over a decade.

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