Introduction
On May 8, 2024, the Corporate Affairs Commission (CAC), led by Registrar-General Hussaini Magaji (SAN), announced a new mandate requiring all Point Of Sales (POS) business operators in Nigeria to register with the CAC. This directive aligns with the Central Bank of Nigeria (CBN) Guidelines for Agent Banking, 2013, and Section 863(1) of the Companies and Allied Matters Act (CAMA), 2020. According to the act, “A person or association of persons shall not carry on business in Nigeria as a Company, Limited Liability Partnership, Limited Partnership or under a Business Name, without being registered under this Act.”
Importance of Registration
POS operators are integral to financial transactions across Nigeria, providing job opportunities and contributing to financial inclusion. However, these channels have also become targets for fraudulent activities. The Nigeria Inter-Bank Settlement System’s Annual Fraud Landscape report for 2023 indicated that financial institutions lost approximately N17.67 billion to fraud, with web and POS channels being the most exploited. Consequently, the CAC’s directive aims to regulate POS operations more stringently, reducing fraud and enhancing the legitimacy of POS businesses.
Registration Deadline
The CAC has set a deadline of July 7, 2024, for all existing POS operators to comply with this registration requirement. New POS businesses must register with the CAC before commencing operations.
Registration Requirements
To register as a POS operator under a Business Name with the CAC, the following information and documents are needed:
1. Two Proposed Names: Submit two potential names for the enterprise.
2. Nature of Business: Describe the type of business the enterprise will conduct.
3. Office Address: Provide the office address, including house number, street name, Local Government Area (LGA), and state. Additionally, provide an email address and phone number.
4. Sole Proprietor’s Data: Include the date of birth, residential address, phone number, and email address of the sole proprietor.
5. Valid ID Card: A valid identification card of the sole proprietor.
6. Passport Photograph: A recent passport-sized photograph of the sole proprietor.
7. Signature: The sole proprietor’s signature.
Updating POS Machines
After registering with the CAC, POS operators must update their POS machines with their respective agents or vendors. This update ensures that the business name is correctly reflected on the POS machines. Failure to align the business name with the POS machine will be considered a violation of government orders and could result in severe penalties.
Conclusion
Registering POS operations with the CAC is now mandatory, reflecting a significant step towards curbing fraud and legitimizing POS businesses in Nigeria. By adhering to these registration requirements and deadlines, POS operators can ensure compliance with the law and contribute to a more secure and efficient financial transaction landscape.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices, or www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.
