What striking off means
Striking off removes a company from the register, and the company then ceases to exist.
The Corporate Affairs Commission can strike off a company where it has reasonable cause to believe the company is not carrying on business or is not in operation. Persistent failure to file annual returns is the usual signal, because a company that has filed nothing for years looks dormant whether or not it is.
The process involves enquiry and notice before the name is struck off and the company dissolved.
Dissolution has consequences that surprise directors. The company no longer exists, so it cannot sue, be sued, hold assets, operate a bank account or contract. Property still standing in its name can pass to the state as ownerless property.
A company can also apply to be struck off voluntarily where it has genuinely ceased operations, which is the tidy way to close a business with nothing in it.
How it is used
Most Nigerian striking off happens to companies nobody meant to close.
A business is incorporated, trades for two years, and winds down informally. Nobody files annual returns. Correspondence goes to a registered office nobody monitors. Years later the founder tries to reactivate the company, or discovers during a bank process that it has been struck off.
The practical position then is restoration. CAMA provides a route for a company that was struck off to be restored to the register on application, subject to the conditions and the period the Act allows, and restoration generally puts the company back as if it had not been struck off. Outstanding filings and penalties have to be dealt with as part of the exercise.
Restoration takes time and costs money, and both exceed what filing annual returns would have cost.
Where a founder genuinely wants to close a company with no assets and no liabilities, voluntary striking off is the appropriate route. Where there are assets to distribute or creditors to deal with, winding up is the correct process and striking off is not a substitute for it.
Key features
- Removal of a company from the CAC register, resulting in dissolution
- Usually follows a failure to file and an apparent cessation of business
- Preceded by enquiry and notice
- A dissolved company cannot sue, be sued, hold assets or contract
- Property in the company's name can pass to the state as ownerless
- Restoration to the register is possible on application within the period allowed
How this works in Nigeria
The CAC has conducted exercises to clean the register of dormant and non compliant companies, and the practical effect for founders is that inactivity is no longer invisible.
The most common way Nigerians discover the problem is at a bank. A corporate account is being opened or reviewed, the bank runs a CAC search, and the status report shows the company is no longer active. Nothing proceeds until it is resolved.
The second is during a transaction. An investor or buyer conducting due diligence finds the company was struck off, and the deal stops while restoration is pursued.
Property is the sharpest consequence. A company holding land that is struck off leaves the land in the name of an entity that no longer exists, and sorting that out is considerably harder than the original filing obligation.
Directors should also understand what striking off does not do. It does not extinguish personal guarantees. It does not resolve tax liabilities. And it does not protect directors from liability for conduct before dissolution.
The preventive step is unglamorous: file annual returns every year, even for a dormant company, and keep the registered office address current so that notices actually arrive.
Striking off vs winding up vs dormancy
Three ways a Nigerian company stops being active, with very different consequences.
Dormancy is a state, not a process. The company exists, is not trading, and still owes its filing obligations. A dormant company that files annual returns stays in good standing indefinitely.
Striking off removes the company from the register and dissolves it. It is administrative, it is quick, and it offers creditors none of the protections of a formal insolvency process. It suits a company with no assets and no liabilities.
Winding up is the formal process. A liquidator realises assets, pays creditors in the statutory order and distributes any surplus before the company is dissolved. It is required where there are assets to distribute or creditors to deal with.
The error is using striking off as a way to walk away from a company that owes money. It does not achieve that, and it can leave directors exposed while assets pass to the state.
Limits and risks
Restoration is available but limited by time and conditions, so a company struck off long ago may be harder or impossible to restore.
Dissolution also does not clean up obligations. Personal guarantees survive, tax liabilities are not extinguished, and directors remain answerable for their conduct before dissolution.
Assets are the practical trap. Property, bank balances and intellectual property standing in a dissolved company's name are not automatically returned to the founders.
And notice depends on the registered office. A company that moved without filing the change may never receive the enquiry or the notice, and discovers the position long afterwards.
Worth knowing
File annual returns every year even for a company that is doing nothing. A dormant company that files stays alive at minimal cost, and a company that is struck off with property in its name creates a problem far more expensive than every missed filing put together.
Questions people ask
Why would the CAC strike off my company?
Where it has reasonable cause to believe the company is not carrying on business or is not in operation. Persistent failure to file annual returns is the usual trigger, because it makes an active company look dormant.
What happens when a company is struck off?
It is dissolved and ceases to exist, so it cannot sue, be sued, hold assets, operate an account or contract. Property still in its name can pass to the state as ownerless property.
Can a struck off company be restored?
Yes, on application within the period and subject to the conditions CAMA allows, and restoration generally puts the company back as if it had not been struck off. Outstanding filings and penalties must be dealt with.
Does striking off cancel the company's debts?
No. It does not extinguish personal guarantees, tax liabilities or directors' responsibility for their conduct before dissolution. It is not a way to walk away from obligations.
Can I strike off my own company?
Voluntary striking off is available where the company has genuinely ceased operations with no assets and no liabilities. Where there are assets to distribute or creditors to deal with, winding up is the correct process.
How do I avoid being struck off?
File annual returns every year, including for a dormant company, and keep the registered office address current at the CAC so that enquiries and notices actually reach you.