Introduction:
In the realm of business operations in Nigeria, understanding and complying with annual returns are crucial for the seamless continuation of your enterprise. This article sheds light on various aspects of annual returns, answering key questions and demystifying the process.
What is CAC Annual Returns?
Annual returns, as per the Corporate Affairs Commission (CAC) in Nigeria, refer to the yearly statement submitted by registered entities detailing their composition, activities, and financial standing. It is a mandatory requirement under the Company and Allied Matters Act (CAMA) 2020. This legal obligation ensures transparency and compliance with the Company and Allied Matters Act (CAMA) 2020.
An annual return is not the declaration of the profit the company made in a year, it is not a financial document, but rather a yearly statement by an actively registered business name or company which is meant to keep CAC updated about the company’s activities, composition, and its financial position.
Timelines for Filing of CAC Annual Returns:
To foster clarity, it is essential to debunk misconceptions about filing timelines for various entities. The following table outlines specific deadlines:
| Entity Type | Filing Deadline |
|---|---|
| Business Name | On or before June 30th |
| Limited Liability Companies | Within 42 days after AGM |
| Incorporated Trustees | Between June 30th and December 31st |
| Limited Liability Partnership (LLP) & Limited Partnership (LP) | Within 60 days of financial year closure |
Cost of Filing Annual Returns:
Understanding the cost structure is vital. Here’s a breakdown of fees for CAC annual returns:
| Business Type | Annual Filing Fee | Penalty for Late Filing | Daily Penalties* |
|---|---|---|---|
| Business Name | ₦3,000 | ₦5,000 | ₦150 |
| Limited Partnership | ₦5,000 | ₦10,000 | ₦500 |
| Limited liability Company (Small Company) | ₦5,000 | ₦5,000 | ₦500 |
| Limited Liability Partnership (LLP) & Limited Liability Company (Ltd/Gte) | ₦5,000 | ₦10,000 | ₦500 |
| Public Company | ₦10,000 | ₦25,000 | ₦1,000 |
*Daily Penalty may occur in certain circumstances.
Definition of Small Company:
A small company, as per CAC criteria, must be a private company with a turnover not exceeding ₦120,000,000 and net assets below ₦60,000,000. None of its members should be foreigners, government entities, or nominees.
How Do I File My CAC Annual Returns Online?
Filing CAC annual returns online has become a streamlined process.Navigating the online filing process is now simplified through accredited agents. Accredited agents can assist by providing an annual return form, which includes essential details such as registration number, business name, financial information, and authentication. The process is efficient and eliminates the need for physical document submission at the CAC offices. Here’s a step-by-step guide:
- Fill the annual return form with business details.
- Provide information on branch address, return year, financial details, and proprietor/partners.
- Include details of corporate partners if applicable.
- Authenticate the form with the name and email address of the authorized individual.
- Submit the documents to the Accredited Agent, who then files accordingly in the specified manner.
After submission, the process typically takes 3 to 10 days for approval and business reactivation in cases of inactive CAC Status.
What is Annual Return Certificate?
The annual return certificate is a document issued by the CAC, confirming that a business has successfully submitted its annual returns. This certificate serves as evidence of compliance with statutory obligations.
Importance of Filing CAC Annual Return:
Filing annual returns is not just a legal requirement; it holds various advantages for businesses, including access to post-incorporation services, confirmation of business continuity, eligibility for contract bidding, and enhanced public confidence.
Importance of Filing CAC Annual Return
Filing annual returns is not just a legal requirement; it’s a strategic move. Beyond legal obligations, it holds various advantages for businesses, including:
- Active Status on CAC Website: Regular filling of annual returns makes your business, company, or incorporated trustee status active on the CAC portal. You can visit https://search.cac.gov.ng/ to check your company’s status and avoid being struck off the list of registered companies with CAC.
- Access to Post-Incorporation Services: Enjoy services like Certified True Copy requests, carrying out increases in share capital, changes to business objects or registered addresses, and changes to directors, partners, and trustees. Failure to file annual returns on time and any applicable penalties not paid in full will hinder CAC from providing any post-incorporation services to any registered entity.
- Business Continuity Confirmation: Prove to the world that your business is alive and thriving.
- Eligibility for Contract Bidding: Secure contracts by showcasing your compliance and commitment, as the majority of contract bids in the public or private sectors typically include the submission of an up-to-date annual report as a crucial requirement.
- Enhanced Public Confidence: Build trust among investors and partners through transparent reporting. Due diligence investigations with the CAC are typically conducted by investors to learn more about the state of a company before engaging in business with the business entity.
Misconceptions About Annual Return
Let’s debunk the myths:
- Not Only for Large Companies: Annual returns are for all, from small startups to large corporations.
- Different from Tax Returns: Annual returns focus on company information, not financial transactions.
- Not a One-Time Filing: It’s an annual affair, a recurring commitment.
Implications of Failure to File CAC Annual Return:
Entities failing to file annual returns, as mandated by CAMA 2020, Section 425, face penalties at the discretion of the CAC, applicable to both the company and its directors or principal officers.
The penalties for non-compliance are a storm no business wants to weather. Besides financial implications, the CAC may strike out your business name, opening the stage for new actors. Restoration involves a legal encore, filing pending returns, paying fees and settling all dues and penalties.
Conclusion:
In conclusion, navigating the landscape of CAC annual returns in Nigeria is essential for every business owner. Understanding the process, adhering to timelines, and seeking professional assistance when needed ensures not only legal compliance but also contributes to the growth and credibility of your business in the Nigerian corporate environment.
For consultation on filing CAC annual returns, call or send a WhatsApp message to : (+234) 09044968631
