Prosecution of Offences under the Companies and Allied Matters Act 2020: Regulatory Powers, Procedures and Enforcement

Contributor: Etieno Martins Ukanga

Introduction

The Companies and Allied Matters Act 2020 (CAMA 2020) is the principal federal statute governing the formation, administration and regulation of companies and other business organisations within its scope.^[1] Beyond incorporation and corporate administration, the Act creates offences, imposes statutory penalties and establishes investigative, evidential and procedural mechanisms for enforcing corporate obligations. Effective enforcement is therefore central to corporate accountability, investor and creditor protection, and confidence in Nigeria’s business environment.

The enforcement architecture, however, is more dispersed than the Act’s original structure may suggest. CAMA 2020 does not place all corporate offences in sections 734–745. Sections 734–742 appear under the heading “Legal Proceedings, etc” and deal principally with prosecution, production of documents, privilege, relief, certain penalties, fines and applications by the Corporate Affairs Commission (CAC) to the Court. Sections 743–745 are miscellaneous provisions, and section 745 concerns provisions for employees on the cessation or transfer of a business rather than criminal enforcement. Offences and penalties are instead distributed throughout CAMA 2020, including provisions dealing with winding-up, false statements, unregistered business activity and obstruction of regulatory investigations.^[2]

This article examines the prosecution of offences under CAMA 2020 by focusing on the CAC’s investigative and compliance powers, the statutory routes through which suspected criminal conduct is referred for prosecution, representative offences and penalties, jurisdiction, evidential mechanisms and the treatment of fines. It also distinguishes criminal prosecution from administrative and compliance measures, a distinction necessary for an accurate understanding of the Act’s enforcement framework.

Regulatory and Investigative Powers of the Corporate Affairs Commission

The CAC is the principal regulatory institution responsible for administering CAMA 2020. Section 8 mandates the Commission to administer the Act; regulate and supervise the formation, incorporation, management, striking-off and winding-up of companies; arrange or conduct investigations where the interests of shareholders, members, partners or the public so demand; and ensure compliance with the Act and regulations made under it.^[3] These powers make the Commission the primary institutional point for identifying and investigating suspected corporate non-compliance.

The Act develops that general mandate through a detailed investigation regime. Sections 357-363 provide for the appointment of inspectors, the investigation of company affairs, the production of documents and evidence, and the preparation of inspectors’ reports.^[4] Under the predecessor CAMA, the Court of Appeal in Corporate Affairs Commission v United Bank for Africa Plc recognised that the Commission could, in circumstances prescribed by the statute, investigate company affairs without first obtaining a court order. Although the decision construed the former Act, its treatment of CAC’s independent investigatory role remains instructive when read alongside the express investigation powers now contained in CAMA 2020.^[5]

The evidential significance of an investigation is also expressly addressed. A copy of an inspector’s report made under sections 357 or 358 and certified by the Commission is admissible in legal proceedings as evidence of the inspector’s opinion on matters contained in the report.^[6] This does not make the report conclusive proof of guilt, but it enables material generated through the statutory investigation process to enter subsequent proceedings in the manner prescribed by the Act.

Section 742 complements these powers by allowing the Commission to apply to the Federal High Court for directions on any matter concerning its statutory duties, powers or functions. The same provision makes clear that an application for directions does not displace the Commission’s independent power to conduct compliance enquiries into any person or company.^[7] The provision therefore combines regulatory autonomy with judicial supervision without making judicial directions a prerequisite to every compliance enquiry.

From Investigation to Criminal Prosecution

CAMA 2020 draws an important distinction between CAC investigation and the decision to prosecute under the specific statutory routes created by the Act. Where an inspector’s report under section 363 indicates that a person has been guilty of an offence for which that person is criminally liable, section 365(1) requires the report to be referred to the Attorney-General of the Federation (AGF). If the AGF considers that prosecution ought to be instituted, section 365(2) requires him to direct action accordingly, while past and present officers and agents of the company, other than the defendant, must provide such assistance as they are reasonably able to give.^[8]

A parallel mechanism applies during winding-up. Under section 675, the Court may direct a liquidator to refer suspected criminal conduct by a past or present officer or member to the AGF in a winding-up by or subject to the supervision of the Court. In a voluntary winding-up, the liquidator must report such suspected offences to the AGF. Where the AGF considers that prosecution should follow, he is to institute proceedings, and the liquidator and relevant officers and agents must assist the prosecution.^[9] This route is especially significant because CAMA 2020 creates several offences connected with conduct before or during liquidation.

The Act also provides a targeted mechanism for securing documentary evidence where an offence connected with company management is suspected. On an application in chambers by the AGF, a Judge of the Federal High Court may, where reasonable cause is shown, authorise inspection of relevant company documents or require specified company officers to produce them. The provision extends, with stated limitations, to documents held by persons carrying on banking business where those documents relate to the company’s affairs.^[10]

These provisions require precision in describing the CAC’s prosecutorial role. Section 11 permits the Registrar-General and other CAC employees who are legal practitioners to represent the Commission as legal practitioners in the course of their employment.^[11] That provision is distinct from a general statutory declaration that the CAC prosecutes every offence under CAMA 2020. For the investigation-report and winding-up routes discussed above, the Act expressly assigns the prosecutorial decision to the AGF. This statutory allocation operates alongside the AGF’s general constitutional power to institute, take over and discontinue criminal proceedings in respect of offences created by Acts of the National Assembly.^[12]

Offences and Statutory Penalties under CAMA 2020

CAMA 2020 uses both criminal offences and statutory penalties as enforcement tools. The distinction matters because not every provision imposing a monetary consequence is drafted in the language of criminal conviction. Section 739, for example, provides that a person who carries on business under a name ending with “Unlimited”, “Limited”, “Public Limited Company” or “Limited by Guarantee”, or the corresponding abbreviations, without being duly incorporated in the relevant form is liable to the penalty prescribed in the Regulations for each day the improper description is used.^[13] The provision protects the integrity of corporate status by preventing persons from presenting an unincorporated or differently constituted enterprise as if it possessed a statutory corporate form that it does not have.

Fraudulent trading attracts a clearer criminal consequence. Section 672(1), in the context of winding-up, permits the Court to impose personal responsibility where the company’s business has been carried on recklessly, with intent to defraud creditors or for a fraudulent purpose. Criminal liability under section 672(3), however, attaches where a person knowingly participates in carrying on the business with the fraudulent intent or purpose described in subsection (1), other than mere recklessness. Such a person commits an offence and is liable on conviction to a fine as the Court deems fit, imprisonment for two years, or both. Section 740 extends the criminal effect of section 672(3) to fraudulent trading discovered outside winding-up.^[14]

CAMA 2020 also criminalises knowingly submitting materially false information. Under section 862(1), a person who wilfully makes a materially false statement, knowing it to be false, in a return, report, certificate, balance sheet or other document required for the Act commits an offence and may be imprisoned for two years; where the offender is a company, the provision prescribes a fine as the Court deems fit for every day the default continues. Section 862(2), by contrast, treats a materially false statement in a company’s annual return as attracting a regulatory penalty prescribed by the Commission.^[15] This juxtaposition illustrates why the Act’s criminal and administrative consequences should not be treated as interchangeable.

Carrying on a business that is required to be registered under CAMA 2020 without registration, or under a name whose registration has been refused or cancelled, is expressly made an offence by section 863(2), with liability on conviction to the fine prescribed by the Commission’s regulations.^[16] Likewise, section 865 grants authorised CAC officers access to premises, books, and electronic records for inspection where contravention of the Act is suspected, and permits the Commission to engage law-enforcement agencies to discharge those functions. Obstructing an authorised officer, impeding an investigation, preventing the procurement or giving of evidence for a prosecution, or preventing a lawful arrest under the section constitutes an offence punishable by a fine, imprisonment for up to 12 months, or both.^[17]

The winding-up provisions contain further offences directed at corporate officers. Sections 668-671 criminalise, among other conduct, specified misconduct by officers of companies in liquidation, falsification of books, fraud by officers of companies in liquidation and failure to keep proper accounts in the circumstances prescribed by the Act.^[18] These examples confirm that corporate enforcement offences cannot be understood by examining sections 734-742 alone; they must be read across the substantive provisions of CAMA 2020.

Jurisdiction and Procedural Safeguards

Section 734 provides the general procedural rule for the trial of CAMA offences. It states that a court of competent jurisdiction may try all offences under the Act in the place where the offence is alleged to have been committed. It further provides that where CAMA prescribes a criminal sanction for an act, omission or default without expressly describing the conduct as an offence or referring to conviction, the conduct is to be treated as referable to an offence for section 734.^[19]

The expression “court of competent jurisdiction” should not be reduced automatically to the Federal High Court in every criminal case. CAMA defines “Court” or “the Court”, when used in relation to a company, as the Federal High Court, and certain provisions – including section 735 – specifically assign functions to that Court.^[20] Constitutionally, however, section 251(3) gives the Federal High Court criminal jurisdiction in respect of matters corresponding to its civil jurisdiction under section 251(1), without using the language of exclusivity that appears in section 251(1). In Ehindero v Federal Republic of Nigeria, the Supreme Court held that section 251(3) does not confer exclusive criminal jurisdiction on the Federal High Court. Accordingly, the proper forum for a CAMA prosecution depends on the particular offence, the applicable statutory provision, constitutional jurisdiction and the territorial connection required by section 734.^[21]

CAMA also incorporates safeguards into the investigative and prosecutorial process. Section 735 requires judicial authorisation before the AGF may obtain the specified inspection or production orders for suspected management offences, while section 737 preserves legal professional privilege by providing that proceedings instituted under the Act by the AGF do not compel a legal practitioner who acted for a defendant to disclose privileged communications made in that capacity.^[22] These protections reinforce the principle that effective corporate enforcement must remain within the procedural limits established by law.

Application of Fines and Complementary Enforcement Measures

Section 741 governs the application of fines imposed under CAMA 2020. A court may direct that the whole or part of a fine be applied towards the costs of the proceedings or towards rewarding the person on whose information, or at whose suit, the fine was recovered. Subject to any such direction, fines imposed under the Act are to be paid into the Consolidated Revenue Fund.^[23] The provision therefore regulates the disposition of criminal fines after imposition; it does not itself determine whether particular conduct constitutes an offence.

CAMA 2020 also uses compliance orders alongside penalties. Under section 744, where a company fails to file, deliver or send a required return, account, document or notice to the Commission and does not cure the default within 14 days after service of notice, the Court may, on the application of a member, creditor or the Commission, order the company and any officer to make good the default. Importantly, such an order does not prejudice the operation of any enactment imposing penalties for the same default.^[24] This mechanism demonstrates that restorative compliance and punitive consequences may operate concurrently.

A further distinction appears in section 866, which empowers the Commission to compound an “administrative offence” by accepting a sum that does not exceed the maximum fine to which the offender would have been liable upon conviction.^[25] Whatever questions may arise from the terminology used in that provision, its practical significance is clear: CAMA contemplates a compliance and settlement mechanism for administrative offences that is separate from the trial of criminal offences. A proper enforcement analysis must therefore distinguish investigation, administrative penalties, compounding, compliance orders and criminal prosecution rather than treating them as a single process.

Conclusion

The prosecution of offences under CAMA 2020 operates through a distributed enforcement architecture rather than a single penal code within the Act. The CAC occupies the central regulatory and investigative position: it administers the Act, conducts investigations, requires compliance and may seek judicial directions where necessary. Where statutory investigations disclose criminal conduct, however, CAMA establishes defined pathways for referring matters to the AGF, particularly under sections 365 and 675. The Act also supports prosecution through documentary-production mechanisms, evidential rules and provisions governing the application of fines.

At the substantive level, CAMA 2020 combines express criminal offences with statutory and administrative penalties. Fraudulent trading, materially false statements, unregistered business activity, obstruction of regulatory investigations and misconduct in winding-up illustrate the breadth of conduct subject to enforcement. At the same time, provisions such as sections 739, 744 and 866 demonstrate that not every regulatory breach is dealt with solely through criminal prosecution.

The framework’s effectiveness therefore depends on accurate breach classification, lawful investigation, appropriate referral and prosecution, observance of jurisdictional limits, and consistent use of available compliance mechanisms. A disciplined application of these provisions strengthens corporate accountability without collapsing the distinct roles of the CAC, the AGF and the courts. That balance is essential to the credibility of Nigeria’s corporate regulatory system and to the wider objectives of transparency, investor protection and good corporate governance.

Reference

1. Companies and Allied Matters Act 2020, No 3 of 2020, as amended by the Business Facilitation (Miscellaneous Provisions) Act 2022. ↑
2. ibid ss 668-672, 734-742 and 862-866. ↑
3. ibid s 8(1)(a), (c)-(f). ↑
4. ibid ss 357-363. ↑
5. Corporate Affairs Commission v United Bank for Africa Plc (2017) 2 NWLR (Pt 1548) 99 (CA). ↑
6. CAMA 2020, s 368(1). ↑
7. ibid ss 742(1)-(2) and 868(1) (definition of “Court”). ↑
8. ibid s 365(1)-(2). ↑
9. ibid s 675(1)-(5). ↑
10. ibid s 735(1)-(3). ↑
11. ibid s 11. ↑
12. Constitution of the Federal Republic of Nigeria 1999 (as amended), s 174(1). ↑
13. CAMA 2020, s 739. ↑
14. ibid ss 672(1), (3) and 740. ↑
15. ibid s 862(1)-(2). ↑
16. ibid s 863(1)-(2). ↑
17. ibid s 865(1)-(5). ↑
18. ibid ss 668-671. ↑
19. ibid s 734(1)-(2). ↑
20. ibid s 868(1) (definition of “Court”). ↑
21. Constitution of the Federal Republic of Nigeria 1999 (as amended), ss 251(3) and 257(1); Ehindero v Federal Republic of Nigeria (2018) 5 NWLR (Pt 1612) 201 (SC). ↑
22. CAMA 2020, ss 735 and 737. ↑
23. ibid s 741. ↑
24. ibid s 744(1)-(3). ↑
25. ibid s 866. ↑