How to Close or Strike Off a Company in Nigeria: The Complete CAC Dissolution Guide
Failing to formally close a registered company means annual return penalties, tax obligations, and director liability continue indefinitely. This guide covers voluntary striking off, members' voluntary winding up, and the step-by-step CAC process under CAMA 2020.
Why You Cannot Just 'Abandon' a Registered Company
One of the most dangerous misconceptions among Nigerian founders is the belief that closing your company simply means stopping operations and walking away. Under the Companies and Allied Matters Act 2020 (CAMA 2020), a company that remains on the CAC register continues to have legal obligations indefinitely — regardless of whether it has traded for a single day.
An abandoned company still accumulates annual return penalties every year (Sections 417-420 CAMA 2020), still exposes its directors to personal liability for statutory defaults, can still be assessed by NRS/FIRS for tax obligations, and remains visible on the public CAC search registry in a way that can damage directors' corporate credibility.
Properly closing your company through the formal CAC process is the only way to extinguish these continuing obligations. CAMA 2020 provides two primary routes: (1) Voluntary Striking Off (for dormant or never-traded companies), and (2) Members' Voluntary Winding Up (for solvent companies that have traded and hold assets).
⚠️Directors Remain Personally Exposed Until Formal Dissolution
A company not formally dissolved remains a legal person. Its directors retain fiduciary duties, its registered office address continues to receive legal notices, and creditors can seek court orders compelling directors to act. There is no 'statute of limitations' on CAC annual return obligations for active companies.
Route 1: Voluntary Striking Off (Section 692 CAMA 2020)
Voluntary Striking Off is the fastest and most cost-effective dissolution route. It is appropriate for companies that: have never traded commercially, have been dormant for at least 3 months immediately before the application, have no outstanding liabilities (taxes, statutory levies, creditor debts), hold no assets, and are not subject to any court proceedings or regulatory investigation.
The application is made by the directors directly on the CAC Company Registration Portal (CRP) using Application Form CAC 17.
Eligibility Checklist for Voluntary Striking Off:
- ✓Company has NOT traded, carried on any business, or changed its name in the 3 months immediately before the application
- ✓Company has no outstanding liabilities to any creditor, employee, or government agency
- ✓Company holds NO assets — if any bank accounts remain open, they must be closed and balances distributed before application
- ✓No ongoing or pending court proceedings involving the company as a party
- ✓No outstanding insolvency proceedings initiated against the company
- ✓Tax Clearance Certificate from NRS covering all years up to date of application OR a letter of non-trading status from NRS
Step-by-Step Voluntary Striking Off Process on CAC CRP
Follow these steps to apply for voluntary striking off:
Step 1 — Obtain Tax Clearance: Apply to NRS/FIRS for a Certificate of Non-Trading or Tax Clearance Certificate confirming no outstanding liabilities. For companies that never traded, NRS typically issues a letter of non-assessment upon application.
Step 2 — Settle All Statutory Debts: Clear any outstanding CAC annual return penalties and any other regulatory obligations.
Step 3 — Close Bank Accounts: Obtain bank account closure confirmation letters from all banks where the company holds accounts.
Step 4 — Pass a Board Resolution: Directors must document a formal Board Resolution authorizing the application for voluntary striking off.
Step 5 — File on CAC CRP: Navigate to 'Post-Incorporation Filings' → 'Striking Off / Dissolution', complete Form CAC 17, upload the Board Resolution and NRS non-liability certificate, and pay the prescribed CAC fee.
Step 6 — CAC Gazette Publication: CAC publishes a notice in the Federal Government Official Gazette for 3 months. If no objections are received, the company is formally struck off.
| Step | Action | Responsible Party | Typical Timeframe |
|---|---|---|---|
| 1 | Obtain NRS Non-Trading Certificate or TCC | Directors / Tax Consultant | 2-4 weeks |
| 2 | Clear all CAC annual return arrears | Directors / Corporate Secretary | 1-2 weeks |
| 3 | Close all company bank accounts | Directors | 1-3 weeks |
| 4 | Pass Board Resolution for dissolution | Board of Directors | Same day |
| 5 | File CAC Form CAC 17 on CRP portal | Corporate Secretary / Lawyer | 1-3 business days |
| 6 | CAC Gazette Publication and striking off | CAC (automatic) | 3-4 months after filing |
Route 2: Members' Voluntary Winding Up (Sections 620–650 CAMA 2020)
If your company has traded, holds assets, or has outstanding debts that will be settled in full from company funds, you must use the Members' Voluntary Winding Up process instead of Voluntary Striking Off.
This formal procedure involves a Licensed Insolvency Practitioner (Liquidator) appointed by the shareholders. The process begins with a Statutory Declaration of Solvency — a sworn declaration by directors that the company can pay all its debts in full within 12 months of commencing winding up.
Members pass a Special Resolution at a General Meeting to wind up the company. The Liquidator then collects all assets, pays all creditors in full, distributes any surplus to shareholders in proportion to their shareholding, and files a Final Return with CAC to formally dissolve the company.
⚠️Solvency Declaration is a Criminal Instrument
A director who signs the Statutory Declaration of Solvency without having reasonable grounds to believe the company can pay all its debts within 12 months commits a criminal offence under CAMA 2020 and is personally liable for company debts if it subsequently cannot pay. Never sign this declaration lightly.
Striking Off a Business Name (Sole Proprietorship / Partnership)
Business Names registered under Part B of CAMA 2020 are deregistered using a simpler procedure. The proprietor or partners submit an application on the CAC CRP portal for cancellation of the Business Name registration, accompanied by a written statement of intention to cease business and evidence that no outstanding annual return penalties remain.
Unlike companies, Business Names do not require Gazette publication. The cancellation takes effect once approved by CAC, typically within 5-10 business days of a complete application.
Consequences of Being Struck Off Involuntarily by CAC
If you do not apply to dissolve your company voluntarily, CAC can strike it off involuntarily under Section 692(2) CAMA 2020 if it has failed to commence business within one year of incorporation, or has filed no annual returns for two consecutive years, or appears to CAC to be defunct.
An involuntarily struck-off company's property and assets vest immediately in the Federal Government of Nigeria as bona vacantia (ownerless property). Directors who continue to trade in the name of a struck-off company face personal liability for all debts and criminal liability under CAMA 2020.
Restoration of a struck-off company is possible via court order under Section 694, but the process is significantly more expensive and time-consuming than the original dissolution.
Frequently Asked Questions
Common Founder Questions on CAC & Corporate Legal
Can I dissolve a company that still has outstanding FIRS tax liabilities?▾
No. CAC will not process a voluntary striking off application where the company has unresolved tax obligations. You must obtain a Tax Clearance Certificate or a letter from NRS confirming no outstanding liabilities before CAC will process the dissolution application.
What happens to employees when a company is wound up?▾
Employees are entitled to outstanding salaries, accrued leave pay, and statutory entitlements (pension contributions, NSITF, NHF arrears) as priority creditors. In a Members' Voluntary Winding Up, the Liquidator must settle all employee claims before distributing any surplus to shareholders.
How long does the entire voluntary striking off process take?▾
From the date of CAC's acceptance of the Form CAC 17 application, the Gazette notice period is 3 months. Total timeline from preparing documents to formal striking off is typically 4-6 months, assuming no objections are filed during the Gazette period.
Can a struck-off company be revived if we want to trade again later?▾
Yes. A company struck off can be restored to the register via a court application under Section 694 CAMA 2020, filed within 20 years of the date of striking off. The court can order restoration and regularisation of all filing defaults — but this involves legal costs, court filing fees, and back-payment of all outstanding annual returns.
Do company directors need to resign before the company is dissolved?▾
Directors do not need to formally resign — their appointment terminates automatically upon the company being dissolved and removed from the CAC register. However, during the winding-up period, directors retain fiduciary duties and legal responsibilities until dissolution is complete.