The Corporate Affairs Commission (CAC) has announced that 100,000 Point of Sale (POS) operators have formally registered their businesses under its POS formalisation project.
This development was disclosed by the Registrar-General of the CAC, Hussaini Magaji, during an In-House Enforcement and Compliance Training held on Monday in Abuja.
The initiative, launched on July 7, 2024, and concluded on September 5, 2024, was designed to bring POS operators into the formal economy. Despite the registration milestone, the figure falls short of the expected target of 250,000 businesses, Investors King reports.
Magaji explained that the project aimed to address fraud, kidnapping, and ransom payment issues by ensuring proper documentation of businesses.
He stated, “The drive for rigorous Compliance and Enforcement functions, you would have noticed, commenced with the POS Formalization Project under which POS Operators were required to register a minimum of Business Name in line with the requirements of section 863 (1) of CAMA, which require prior registration before commencement of business or at most within 28 days of commencement for Business Names.”
“Some of the Fintech Companies on which platforms the POS operators do business saw the wisdom and the benefits that could accrue to the businesses themselves and the nation at large,” Magaji noted.
However, he criticised those who retained outdated practices, stating, “Others with archaic mentally became fixated on the old and obsolete informal mode of business operations, sometimes with cash kept under a pillow or in jute bags.”
The Registrar-General warned that unregistered businesses expose themselves to significant risks, including vulnerability to fraud and exclusion from government interventions.
“The risk of engaging in business transactions with unregistered businesses is very high. Such business is not only susceptible to disappearance into thin air without trace but also serves as an easy vehicle for money laundering and terrorism financing,” he cautioned.
According to Magaji, formalisation is a critical step for business legitimacy.
He added, “There is, however, a window for regularization between now and when the regulatory hammer will be brought on them. We are to also clarify that multiple registration is not required across each Fintech for each POS operator.”
To improve its operational efficiency, the CAC is exploring the integration of Artificial Intelligence (AI) into routine processes like name reservation and business registration.
Magaji noted, “Emphasis on compliance enforcement has become more imperative now because of the growing realization that Artificial Intelligence could be deployed to perform routine operational tasks such as name reservation and even registration. This frees time and human resources that could be deployed to perform other tasks that require some measure of discretion.”
The CAC’s efforts to promote compliance include collaboration with other regulators to develop appropriate sanctions for operators avoiding formalisation.
Also, the commission is restructuring its organisational framework to align with global standards and enhance post-incorporation services.