As a registered entity in Nigeria, compliance with regulatory requirements is crucial for maintaining good standing. One key requirement that companies must adhere to is filing annual returns in Nigeria. This is a fundamental aspect of corporate governance and regulatory compliance.
The Companies and Allied Matters Act explicitly states the mandatory requirement of filing annual returns, using the word ‘SHALL’ to denote compulsion. This emphasizes the importance of compliance, not just as a legal requirement but also as an essential part of maintaining transparency and good corporate practice. Failure to file annual returns can lead to penalties and loss of good standing with the Corporate Affairs Commission.
This article provides an overview on how to file annual returns in Nigeria, its requirement, its importance, and the implications of non-compliance.
By understanding the requirements and best practices, companies can ensure they remain in compliance with regulatory requirements and maintain good corporate governance.
Table of contents
What Is Annual Returns
Annual return is a yearly statement made by registered entities about their composition, activities and financial positions to the Corporate Affairs Commission (CAC) in accordance with the provisions of the Companies and Allied Matters Act (CAMA) 2020.
An annual return is not the declaration of the profit made in a year neither is it a financial document; rather, annual returns is a yearly statement by an active registered entity updating the commission about its activities, composition, and its financial position.
Which Law Provides For Filing Of Annual Return
The Companies and Allied Matters Act 2020 is the law that provides the legal framework for the filing of annual returns by entities in Nigeria. CAMA has made it mandatory for all entities: Companies, Incorporated Trustees, Limited Liability Partnership and Business names to file their annual returns within the timeframe specified in the Act.
What Body Is Responsible For Compliance With Annual Return
The Corporate Affairs Commission (CAC) being the body administering the Act is responsible for ensuring compliance with the requirement of annual returns. Registered entities are to submit their returns to the commission within the specified timeline.
Timeframe For Filing Annual Returns
Companies
Every company (limited by shares, guarantee or unlimited) shall, at least once every year, make and deliver to the commission an annual return. The annual return shall be completed, signed by a director and the secretary, and delivered to the commission not later than 42 days after the annual general meeting for the year. However, in practice, annual return should be filed on or before June 30th excluding the first 18 months.
Incorporated Trustees
The trustees of these associations shall, not earlier than 30th June or later than 31st December each year, submit to the Commission a return showing the name of the association, the names, addresses and occupations of the trustees, and members of the council or governing body, particulars of any land held by the corporate body during the year, and of any change which has taken place in the constitution of the association during the preceding year.
Limited Liability Partnership
A limited liability partnership shall file an annual return with the Commission within 60 days of closure of its financial year in the form and manner and accompanied by such fee as may be prescribed. The financial year is determined by the partners in the partnership agreement, usually from January 1st to December 31st every year.
Business Name
Except the year of registration, every business must not later than the 30th day of June in each year file and submit their annual return in the prescribed form to the commission.
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How to File Annual Returns in Nigeria Step by Step
Confirm Eligibility and Filing Period
Make sure the business is due to file annual returns. There is usually an exemption in the year of registration. The filing deadlines vary by type of entities (e.g., June 30th for most businesses).
Log on to the CAC Portal
Browse the web for the Corporate Affairs Commission’s (CAC) website. Upon getting there, log in with your registered email and password. Should you fail to have an account, you must register.
Choose the Entity Type
On the dashboard, select your company type (Business Name, Limited Liability Company, Incorporated Trustee, LLP, etc.).
Go into Annual Returns Section
Post-incorporation services will have Annual Returns, which you click on. Proceed to select the year or years applicable to your filing.
Fill the Online Form
Provide all details as required and diligently detailing the status of the company, composition of directors/trustees, shareholders’ information, and registered address of the office.
Upload Documents
Upload any of the following documents as demanded: signed financial summary, board resolution (if needed), or meeting information for an incorporated trustee.
Pay Filing Fee
Generate a remita or payment invoice and make payment from your chosen option, that is, online (debit card) or paying at the bank of your choice.
Submit Your Application
After paying, return to the CAC portal, upload your payment receipt, and submit your form for annual returns.
Get Confirmation
Once it’s successfully submitted, an email confirmation from CAC would come to you, and you will be able to download an acknowledgment slip from the portal.
Pile of Records
Keep that acknowledgment confirmation along with the proof of payment. This would be for your auditing service, post-incorporation services, or legal verification.
Most times people get stuck trying to follow these procedures. That’s why we are here to do it with the best strategy and timely result delivery.
Consequences of Non-compliance with Filing of Annual Returns
1. Penalties as may be prescribed by CAMA: Directors, Proprietors, Trustees and Partners will be held liable and may incur penalties.
2. Reputational risk: Non-compliance may damage the entity’s public image.
3. Lack of transparency and accountability.
4. Restricted access to post-incorporation services.
5. Risk of being struck off the CAC register.
Conclusion
Timely filing of annual returns is an essential obligation for entities in Nigeria, ensuring transparency, accountability, and regulatory compliance. They are to file for every year save the year the entity was registered.
Why Choose Tcorporate?
Filing of annual returns and corporate compliance in general requires expertise to navigate the legal and regulatory requirements effectively. With our years of experience in corporate law and compliance, we make the process seamless, so you can focus on managing your business.
Contact Us Today
Ready to file your annual returns? Let us handle the complexities while you reap the benefits of a compliant organization.
📞 Phone: 0908 011 9980, 0908 011 9975, 0810 347 2195
📧 Email: info@tcorporatelegaladvisory.com
🌐 Website: www.tcorporatelegaladvisory.com
Written by Ogheneyoma Esther Ibuje LL.B, BL, ACIS
Legal Associate
Tcorporate Legal Advisory
References
i https://cacannualreturns.com/ assessed on 1st March 2024
ii https://omaplex.com.ng/the-effect-of-compliance-and-non-compliance-with-cama-2020/ assessed on 1st March 2024
- iii Section 421(1) of CAMA 2020
- iv Section 848(1) of CAMA 2020
- v Section 773(1) of CAMA 2020
- vi CAMA 2020
- vii Section 425(1), 822(4), 848(3), 733(2) of CAMA 2020
