23/01/2023
WHAT YOU SHOULD KNOW ABOUT CAC ANNUAL RETURNS FILING
We agents have been chastised for not informing our clients about this particular aspect of CAC business registration and hence, I have taken my time to compile this to explain to you what annual returns is.
WHAT IS ANNUAL RETURNS?
Annual return payable to CAC is like the rent you pay yearly to your landlord to remain in his house. Failure to pay this rent puts you at risk of being served with a quit notice and eventually sent packing from the house. This is the same way that CAC operates. CAC requires you to pay rent fee annually to ensure that you are still in business, it facilitates the accurate record keeping of the registered company with the commission and to show that the company is not dormant but still in operation.
It is pertinent to note that annual return is not a declaration of a business’ yearly profit but rather a yearly statement by a registered business or company to keep CAC aware that the company is still active in business.
Annual return is completely different from tax payment.
The fee is not expensive but may accumulate and for every time you default, there’s a late default fee payable to the commission for late filling of the company’s annual returns.
WHEN TO FILE FOR ANNUAL RETURN
Annual return is a mandatory statutory requirement for every registered business entity or organization in Nigeria regardless of their legal structure to file their annual returns with the corporate affairs commission not later than June 30th every year except the calendar year in which the business name is registered does not end by December.
New companies may not file its return within the first 18months of its incorporation whereas for older companies, the annual return is due no later than 42 days after its annual general meeting.
WHY FILE YOUR ANNUAL RETURNS?
Filing of annual returns is important, however, failure to do so attract various consequences which include the payment of default fee.
Any post incorporation filing at the commission by the company in default may not be attended to until the annual return of such company has been duly filed.
The company in default maybe considered by the CAC as defunct and such company may be delisted from the list of companies by the commission.
Filing of annual returns helps portray your company as a reputable organization in times of due diligence checks. Banks and business investors usually conduct some kind of investigation to confirm the status of the business they intend to partner with. If CAC has no information on the current status of your business, you may lose that deal.
It is usually one of the requirements for some contract bids in public, private and government establishments.
It saves time and money especially in an urgent need to obtain CTC of an incorporation document. A not up to date filing will lead to delays.
Finally, penalty for late filing is expensive, 5000 naira extra. it will be better to file on time.
Annual return is not what you can file by yourself, you will need the service of an agent for that and that’s why I am here for you.
Reach out to me on 08142488668