CAC Explains Why Private Schools Now Register as LLCs, Not Business Names

The Corporate Affairs Commission (CAC) explained why it started registering private schools as limited liability companies and not as commercial entities.

The commission argued that the new development which came into force from March 2022 is intended to provide continuity and to show that the private schools were essentially a legal person capable of contracting businesses and could sue and be sued.

This was announced by the Chief Area Officer of CAC Kaduna, Mr. Abdulkadir Modibbo on Thursday in Kaduna during a 2-day consultative meeting on formulating a policy to guide the operations of private schools in Kaduna State.

The meeting was organized by PLANE, a seven-year education program funded by the UK Foreign, Commonwealth and Development Office (FCDO) to invest in a more inclusive and effective education system in Nigeria.

What the senior ACC official says

Modibbo said that when registered as LLCs, schools receive certificates in their name, adding that this attribute and the previously mentioned attributes are not in a business name.

  • He pointed out that above all, registering schools as a limited liability company would ensure the continuity of a school even in the event of the death of the owner.
  • He said, “For example, if the owner of a private school dies, the children can inherit the school and can decide whether to continue the school or close it.
  • “It will affect learners and those who have long graduated from school in case an organization wants to check whether certain people have graduated from a particular school.
  • “But limited liability is not like that. Directors or shareholders will continue the school even if the founder dies.
  • “So, anyone wishing to register a private school will have to register it as a limited liability company with shareholders.”

The CAC has not yet decided which schools are already registered as a trade name

The Chairman of the National Association of Private School Owners, Kaduna State Chapter, Mr. Ja’afaru Riyoji expressed concern that development would pose a challenge as private schools were under small businesses.

Riyoji then asked what would happen to schools that were already registered under a company.

In his response, Modibbo explained that the CAC had not yet taken a position on schools already registered under a trade 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, stated that schools and other educational institutions will no longer be approved as business names.

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