CAC to stop registering Educational Institutions as Business Names

On 10 March 2022, the Corporate Affairs Commission (CAC) informed the general public, through its Public Notice, that it has stopped approving schools, academies and such other institutions of learning, for registration as Business Names.

According to the Public Notice, this is because such educational Institutions are essentially body corporates with perpetual succession, capable of contracting and (subject to such restrictions as may be imposed by other laws) issuing certificates in its own name, and these are attributes which Business Names do not possess.

Educational Institutions already approved by the CAC as Business Names as of 4 March 2022, would however be processed/ registered.

Recall that the Finance Act 2021, removed ‘educational activities’ from the exempt provisions of Section 23(1)(c) of the Companies Income Tax Act (CITA). This means that profits of companies engaged in educational activities (or profits of educational institutions registered as companies) will now be liable to companies income tax. Since CITA only deals with taxation of companies, this new provision of the Law will not apply to schools/organisations registered as Business Names. 

Educational institutions registered as Business Names will continue to enjoy income tax exemptions under the Personal Income Tax Act. 

This new decision of the CAC not to register schools and other educational institutions as Business Names, will however, now make it impossible for any new / subsequent educational institution registered in Nigeria to avoid Income Tax or be exempted from it, on the basis of its Business Name registration status.