Understanding the PSC Requirement in Nigeria: Why It Matters for Every Business

If you’ve ever filed a company registration or annual return in Nigeria, you’ve probably come across the term “Person with Significant Control (PSC)” on the Corporate Affairs Commission (CAC) portal.

At first glance, it looks like another compliance formality: something you just fill in to move forward.

But here’s the truth: your PSC record is one of the most important parts of your company’s legal identity. It determines how transparent your ownership is, how credible your filings appear, and even whether your business can pass certain due diligence checks.

Yet, most Nigerian companies still get it wrong. This post will help you understand what PSC requirement in Nigeria is, and pretty well, why it matters for every business.

PSC Requirement in Nigeria

What Exactly Is a PSC?

A Person with Significant Control (PSC) is anyone who directly or indirectly owns or controls at least 5% of a company’s shares or voting rights, or otherwise exercises significant influence or control over the company.

This definition is drawn from Section 119 of the Companies and Allied Matters Act (CAMA 2020) and the CAC Beneficial Ownership Regulations (2022).

In simpler terms, a PSC isn’t just someone who’s a director or shareholder. It’s the real person behind the company: the one with actual power or benefit.

Why Nigeria Enforces PSC Disclosure

The PSC requirement isn’t just bureaucracy. It’s part of Nigeria’s effort to strengthen corporate transparency and fight money laundering, tax evasion, and illicit ownership.

Before this rule, it was easy for companies to hide behind proxies (names listed on paper, while the real owners remained invisible). Today, every company must declare its true controllers, and the CAC keeps that data in the Beneficial Ownership Register, which can be searched online at https://bor.cac.gov.ng.

This shift puts Nigeria in line with global transparency standards set by the Financial Action Task Force (FATF) and the World Bank’s Beneficial Ownership initiative.

Who Qualifies as a PSC?

Under Nigerian law, a person qualifies as a PSC if they:

• Hold (directly or indirectly) 5% or more of a company’s shares
• Hold 5% or more of the company’s voting rights
• Have the right to appoint or remove a majority of the board of directors
• Exercise significant influence or control over the company’s management or policies
• Have control over a trust or partnership that itself meets any of the above conditions

That means even if someone doesn’t appear on the CAC registration as a director, they may still count as a PSC if they pull the strings behind the scenes.

Why PSC Accuracy Matters

Your PSC record isn’t just a formality. It’s what gives your company credibility in the eyes of regulators, investors, and partners.

When your PSC data is wrong, duplicated, or missing:

• The CAC can flag your company as non-compliant
• Annual return filings may be blocked until the issue is corrected
• You could face daily penalties for failure to disclose or update PSC information
• In serious cases, directors and officers can be held personally liable

In 2025, CAC began actively enforcing PSC compliance through digital cross-checks. That means even small inconsistencies (like spelling errors, outdated records, or duplicated PSC entries) can delay filings or trigger penalties.

Read also: Why You Must Fix PSC Issues Before Filing Your Annual Returns

Common PSC-Related Mistakes Nigerian Businesses Make

At Qrafteq, we’ve reviewed hundreds of company profiles, and the same errors appear again and again:

1. Listing directors instead of true PSCs (they’re not always the same people)

2. Declaring PSCs with less than 5% ownership (which isn’t required)

3. Duplicated entries caused by multiple filings

4. Failing to update PSCs after share transfers

5. Not declaring foreign beneficial owners at all

Each of these can trigger compliance red flags during CAC review. And what looks like a minor error on your screen can become a major issue when you need to file returns, apply for funding, or undergo due diligence.

Read also: 10 Common PSC Issues That Could Jeopardize Your Business Compliance in Nigeria

The Consequences of Non-Disclosure

Failing to declare or update PSC details doesn’t just attract fines; it affects your corporate reputation.

Banks, investors, and government agencies now run background checks through the CAC Beneficial Ownership Register. If your company’s data looks inconsistent or outdated, it can affect your access to funding, contracts, or business partnerships.

In more severe cases, continuous non-compliance can lead to:

• Daily penalties for each day of delay
• Loss of good standing on the CAC portal
• Suspension of post-incorporation services (such as changes in directors or share capital)
• Eventual strike-off if the company fails to file returns for 10 years or more

These aren’t hypothetical consequences. We’ve seen companies lose millions in penalties and miss out on contract opportunities because of unresolved PSC issues that could have been fixed in a few days.

Read also: 10 Common CAC Compliance Mistakes Nigerian Businesses Make (and How to Avoid Them)

What This Means for Business Owners

The goal isn’t to overwhelm business owners with regulations. It’s to encourage clarity and accountability.

A clean PSC record means:

• You can file returns without delay
• You can prove legitimate ownership in tenders or due diligence checks
• You protect your directors and company from avoidable penalties
• You maintain trust with regulators and financial institutions

In a business environment where transparency is increasingly rewarded (and opacity is increasingly penalized), getting your PSC details right is no longer optional.

What You Should Do Next

Before your next filing, take a few minutes to:

1. Review your company record on the CAC portal
2. Check if your PSC details are correct, complete, and up-to-date
3. Make corrections through the appropriate filings if needed (before you pay for annual returns)

If you’re unsure where to start or what qualifies as a PSC in your structure, Qrafteq can help you review and align your company’s compliance data to avoid penalties or rejection.

We don’t just file forms. We audit your entire compliance profile to make sure your PSC records, shareholding structure, and director information all match. That way, when CAC runs its checks, you’re already good to go.

Final Thought

The PSC requirement isn’t just a CAC form. It’s a reflection of your company’s integrity, transparency, and long-term readiness.

In a business world where trust matters more than ever, getting your PSC records right isn’t optional. It’s essential.

Read Also:

• Why You Must Fix PSC Issues Before Filing Your Annual Returns
• 10 Common CAC Compliance Mistakes Nigerian Businesses Make (and How to Avoid Them)
• 10 Common PSC Issues That Could Jeopardize Your Business Compliance in Nigeria

External References:

• CAC Beneficial Ownership Portal (Official)
• FATF: Beneficial Ownership Transparency Guidelines

Qrafteq helps Nigerian businesses stay compliant, confident, and ready for growth. If your PSC records or CAC filings need a professional review, talk to us and get it right the first time.