CAC moves to prevent deaths of registered companies

The Corporate Affairs Commission said on Monday that it had set up a business rescue advisory committee to render advisory services to prevent unnecessary liquidation of registered companies.

The commission in a statement issued by the Director, Public Affairs, Mr. Churchill Williams, said the setting up of the advisory committee was a proactive step taken to place the commission in a strong position to discharge its responsibility in global insolvency practise.

Members of the committee, according to the statement, are professionals drawn from disciplines such as law, finance, audit, human resource, Information and Communications Technology and business management.

The committee, it added, was constituted in such a way as to render expert advice in divergent fields of human endeavour to companies that voluntarily indicate their interest to go through the process.

Williams said in the statement that the committee would be charged with the responsibility of rescuing businesses and companies that could otherwise be liquidated.

He added that since the liquidation of companies would do the economy no good owing to its potential of causing job losses and revenue shortfall for the government from taxes, it was imperative for the commission to assist them through free advisory services.

The CAC called on the affected companies to take advantage of the window, but noted, however, that there would be no bailout for such enterprises.

The statement read in part, “The Corporate Affairs Commission has established a business rescue advisory committee to render free advisory services to prevent unnecessary liquidation of companies. Business rescue is a concept that allows for the suspension of bankruptcy proceedings and appointment of business rescue practitioner whose primary responsibility is to try and resuscitate the company.

“If resuscitation efforts fail, the practitioner will be required to orderly wind down the company in the interest of all stakeholders.

“The business rescue concept is quite different from striking off the names of dormant companies from the register of companies provided for in section 525 of the Companies and Allied Matters Act, CAP C20 Laws of the Federation 2004, which allows for the removal of inactive or shelf companies from the data base.”

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