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The Law on Persons with Significant Control (PSC) and the Quest for Transparency in Corporate Governance in Nigeria

The Law on Persons with Significant Control (PSC) and the Quest for Transparency in Corporate Governance in Nigeria

The Law on Persons with Significant Control (PSC) and the Quest for Transparency in Corporate Governance in Nigeria.

By ATER, Solomon Vendaga


Transparency and accountability are fundamental principles of corporate governance, necessitating the timely disclosure of information and compliance with required actions. This was why in 2010, when Nigeria was identified by the Financial Action Task Force (FATF) as having deficiencies in anti-money laundering and counter-terrorism (AML/CFT) measures, she adopted several legislatives efforts to address the malaise, such legislations include SCUML framework, Money Laundering (Prevention and Prohibition) Act, etc. This is because the Nigerian government recognized the need to enhance AML/CFT frameworks in the country as a means for ensuring transparency in corporate governance . As part of this efforts, the Persons with Significant Control Regulations (PSC Regulations) of 2022 were also enacted in November 2022. The PSC Regulations are designed to enhance transparency and accountability within corporate governance in Nigeria and combat the misuse of companies for illegal purposes, such as money laundering, terrorist financing, and tax evasion.

Who is a PSC?

S.868 of Companies and Allied Matters Act of 2020 (CAMA 2020) defined a (PSC) as an individual who, either directly or indirectly, exercises significant influence or control over a company or LLP. This control can be through various means, such as holding at least 5% of issued shares or voting rights, having the right to appoint or remove the majority of directors or partners, or exercising significant influence over the entity. The PSC Regulations adopt the definition of a person with significant control as provided in the CAMA 2020 and expand it to include the concept of a beneficial owner. Under section 14 PSC Regulations 2022, a beneficial owner is defined as the natural person(s) who ultimately owns or controls a company or limited liability partnership, or the natural person on whose behalf a transaction is being conducted. This definition also encompasses those individuals who exert ultimate effective control over a legal entity or arrangement.

The PSC Regulations go further to clarify the term “significant influence or control”. It is referred to as the ability to direct or substantially influence a company or limited liability partnership (LLP’s) finances, financial policies, management, operations, and structure, or to gain significant economic benefits from the entity. This means therefore, that

These regulations aim to strengthen the framework for preventing financial crimes and promoting transparency in Nigeria’s corporate landscape.

What is Required of Stakeholders under the Law?

Regarding the requirements set by the Corporate Affairs Commission (CAC) for updating PSC details, there are responsibilities for the PSC, the company/LLP, and the Commission:

1. Duty of the PSC

In accordance with Section 119(1) and Section 791(1) of CAMA 2020, a person within seven days of becoming a PSC, shall provide the company/LLP with the required information about their control as per regulations.

2. Duty of the Company/LLP

By the provisions of Section 119(2) of CAMA, after receiving PSC information, notify the Commission within one month and update the register of members. The company shall also disclose PSC details in the annual return and maintain them in the register of members.

With regards to a foreign company or limited liability partnership that is a subscriber, shareholder or partner in a company or limited liability partnership, such company or LLP shall provide the prescribed particulars of the person with significant control who ultimately owns or controls the foreign company or limited liability partnership in accordance with the provisions of the regulations.

3. Duty of the Commission

By the provisions of Section 119(3) and 791(3) of the law, the Commission is obligated to maintain a record of individuals holding significant control, and it must input data provided by the company or any modifications to that data into this register. The Corporate Affairs Commission (CAC) maintains the PSC/Beneficial Ownership Central Register, which encompasses information regarding persons with significant control in all Nigerian companies at a specific point in time, as reported to the Commission. The Commission has introduced the Central Register of Persons with Significant Control, which is accessible to the general public through its website at This register’s significance lies in the fact that it enables any individual to ascertain the beneficial owners of a company or Limited Liability Partnership (LLP) in Nigeria, thereby promoting transparency and aiding in the battle against corruption and financial crimes within the country.

How Relevant is this Obligation?

Updating PSC details is crucial because non-compliance may result in the company’s status being marked as “inactive” on the PSC register (s. 12(1) of PSC Regulations 2022). Additionally, companies and their officers may face administrative penalties if they fail to comply. In cases where a company or Limited Liability Partnership (LLP) fails to meet the reporting obligations related to the Persons with Significant Control (PSC) register, both the company or LLP itself and all its officers will be subject to an administrative penalty. The penalty, to be applied for each day of non-compliance, is as follows:

a. N5,000 for a small company.

b. N10,000 for a company that does not fall into the category of a small company or a company limited by guarantee.

c. N25,000 for a public company.

d. N5,000 for a limited liability partnership.

It is, therefore, crucial to keep the PSC information up to date whenever there is a change in the PSC. All relevant parties listed above must be informed before the deadline. In accordance with the guidelines set by the Financial Action Task Force (FATF), the term “Persons with Significant Control” (PSC) is only applicable to natural individuals who possess actual ownership and effective control over the company or LLP, rather than just those with legal ownership or those named on paper as having such control. These are the individuals who exert direct influence over the company or LLP or on whose behalf such control is exercised.


Conclusively, this practice aligns with international standards, like those of the Financial Action Task Force, to ensure that only natural persons who genuinely control a company or LLP are recognized as PSCs. Legal ownership does not suffice; actual control is essential for transparency and the fight against corruption and financial crimes.

About the Author

Ater Solomon Vendaga is a final year Law Undergraduate at University of Abuja Nigeria and the Associate of Programs at Sabilaw Foundation. He is the President of the Tax Club at the University of Abuja Nigeria and Vice-President, Association of Nigerian Taxation Students-ANTAS. He can be reached via or 08025263078


This work is published under the free legal awareness project of Sabi Law Foundation ( funded by the law firm of Bezaleel Chambers International ( The writer was not paid or charged any publishing fee. You too can support the legal awareness projects and programs of Sabi Law Foundation by donating to us. Donate here and get our unique appreciation certificate or memento.


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