The Corporate Affairs Commission (CAC) has provided reason why it commenced the registration of private schools as limited liability companies and not as a business entities.
The commission maintained that the new development which took effect from March 2022 is to ensure continuity and show that private schools were essentially a corporate body capable of contracting businesses and could sue and be sued.
This was made known by the Head, CAC Zonal Officer in Kaduna, Mr Abdulkadir Modibbo, on Thursday in Kaduna at a 2-day consultative meeting on the formulation of policy to guide operations of private schools in Kaduna State.
The meeting was organised by PLANE, a seven-year education programme funded by the UK Foreign, Commonwealth and Development Office (FCDO) to invest in a more inclusive and effective education system in Nigeria.
What the CAC top official is saying
Modibbo said that when registered as limited liability companies, the schools are issued certificates in their names, adding that this and earlier mentioned attributes were not in a business name.
- He stressed that above all, registering schools as a limited liability company would ensure the continuity of a school even if the owner dies.
- He said, “For example, if the owner of a private school dies, the children can inherit the school and may decide to either continue the school or close it.
- “This will affect the learners and those that long graduated from the school in case an organisation wants to verify if certain individuals graduated from a particular school.
- “But a limited liability is not like that. The directors or the shareholders will continue the school even if the founder dies.
- “So, anyone that wants to register a private school, will have to register it as a limited liability company with shareholders.’’
CAC yet to decide on schools already registered as business name
The Chairman, National Association of Proprietors of Private Schools, Kaduna State Chapter, Mr Ja’afaru Riyoji, expressed concern that the development would pose a challenge as private schools fell within small-scale businesses.
Riyoji then asked what would happen to the schools that were already registered under a business.
In his response, Modibbo, explained that CAC was yet to take a stand on schools that were already registered under a business name.
In case you missed it
- Recall that the Corporate Affairs Commission, in a circular dated March 4, 2022, from the Registrar General to all approving officers of the commission, said that schools and other institutions of learning will no longer be approved as business names.
The criteria for registration as a limited company may also need to be reviewed and to be based on category.Since schools are in category.
Once a private school has been registered under CAC and now is to register as limited liability company, does this call for a change of name?
So what happens to the earlier name used under CAC?
What if I want to maintain the name?