Are you looking for guidelines on how to fill annual returns in Nigeria with CAC?. As a business owner, it is very essential to file your annual returns. Many have been confused about the whole process because CAC has made a lot of changes on its website recently. This information guide will walk you through how to file annual returns in Nigeria as well as the penalties Involved for not filing.
What is CAC Annual Returns?
CAC Annual Return is a return that contains a form as regards the matters relating to the organization in accordance with the provisions of the Companies and Allied Matters Act (CAMA).
It is a mandatory requirement for every business name, private limited company, or incorporated trustee in Nigeria and is very essential, as the name implies, to be done at least once every year to the Corporate Affairs Commission (CAC).
It is a financial document that contains information that includes your address and details of directors and shareholders, which must be updated each year through an annual return form.
Filing of the annual return by a company helps to simply keep the CAC updated or informed that such company or business is still active and operating with its stated business activities.
As soon as your Annual Return is filed, your business status shows ACTIVE which means the business is still functioning, but when it is not filed it shows inactive.
Usually, CAC makes Annual Returns a precondition and requirements for you to do or file anything with them, and as the government of this Nigeria is going, your Business would not be able to access grants, loans, contracts, and many other things without Annual Returns.
In summary, Annual Return is what gives you good standing before the government and most especially before CAC.
- Read Also: CAC Document Upload Portal: The use of EDMS
When To File Annual Returns? (Date)
According to CAC, an Annual Return must be made every calendar year. New business names may not file their return within the first 18 months of their incorporation, while for older companies, the annual return is due no later than 42 days after its Annual General Meeting.
It is important to understand that the CAC calendar year starts on June 30th, meaning; for business names you must have filed your returns between January and June of every year anything outside this is late.
For example, If your business name was registered on the 1st of January 2021, you will file your first annual returns after 18 months which is from the 1st of July 2022. (Note that this is only applicable for the first 18 months of your business incorporation, subsequent filing will be every year before June 30th)
For companies and Incorporated trustees, the period to file the annual return is between July and December. anything outside this is late
How To File Annual Returns in Nigeria
Before we proceed with how to file an Annual Return in Nigeria, below are some important facts you should understand first, hence people usually get confused that paying for an annual return is the same as paying for Tax
- Annual Return is not Tax and has nothing to do with Tax
- Annual Return is an embodiment of the Corporate Affairs Commission while Tax is with FIRS (Federal Inland Revenue Service) for companies and state internal Revenue Service for Business names
Guideline For Filling Annual Return Form in Nigeria (Online)
Follow this guide below to file annual returns in Nigeria. (Only accredited accounts can be able to file annual returns.
For Registered Business Names (Enterprises)
Firstly, request and get the Status report document from the proprietor of the business you want to file annual returns for. In the case of a lost status document, it can be downloaded again on the CAC portal (charges apply).
Login to the CAC Post Incorporation Portal and fill in your accredited login details
Search for the business using the business name or number you want to file annual returns
Click on the Annual returns column and fill out the form with the required details (ensure everything is correct)
The Annual Return form should be signed by the proprietors of that company/business, director, and secretary. Once the form is filled you can submit it online and wait for approval
Proceed and make payment with the Annual Return fee to the authorized bank on Remit and remember to keep your receipt as evidence of payment
You will be notified via E-mail from CAC if our payment is accepted
Below is how you can file Annual returns for companies with an accredited account.
Prepare the Statement of Affairs or Audited Statement of Accounts of your Company. (You need the service of a licensed practising chartered accountant for this)
Proceed and get the Annual returns form
Fill out the form properly and affix your signature and passport
Affix the Company’s Statement of Affairs or Audited Statement of Accounts duly signed by the Director and Company’s Secretary.
Submit the completed form for verification and approval and pay the required Annual Return Fee to the authorized bank
Keep your receipt as evidence of payment and wait for an update from CAC
Read Also: How to Register an NGO Foundation in Nigeria
For Incorporated Trustee
The procedure to file annual returns for Incorporated Trustee is not far different from that of a company.
However, for IT, the annual returns must be filed between the 30th of June and the 31st of December every year other than the year of Incorporation.
How Much is Annual Returns in Nigeria (2022)?
Annual Return for Business names as of February 2022 is ₦3,000 and the Penalty for not filing is ₦8,000.
On the other hand Annual Returns for Limited Liability Companies And Incorporated Trustees is now ₦5,000 and the penalty for not filing is ₦10,000
Penalty For Not Filing Annual Returns in Nigeria
If you fail to file your Annual Returns as the law demands in Section 425 of Companies and Allied Matters (CAMA) 2020. The provision states that the company and every director or officer are liable to a penalty that is at the discretion of the commission.
Failure to file Annual Returns for a consecutive period of 8-10 years is aground for striking the name of the company of the company’s register with a belief that the company in question is not in operation.
In most cases, the commission relies on one primary criterion: the failure to file Annual Returns in an indication that the company is dormant.
- Read Also: Functions of CAC in Nigeria
What Happens When Your Company Has Been Delisted From CAC Register?
When a company has been delisted or removed for failure to file Annual Returns, anybody aggrieved by the striking off of the name of the company from the register may apply to the court at any time before the expiration of 20 years from the publication of the notice of the removal.
The person will make a petition to the court and order for restoration of the company to register and if the court is satisfied that the company was still running business activities at the time of the strike-off the court may order the name of that company to be restored to CAC record register.
A formal application can also be written in form of a letter addressed to the Registrar General (RG) of the Corporate Affairs Commission, appealing as well as stating why the Annual Return is not filed as of when due.
In addition, to the written application, receipt of all payable dues (total fees of years of unfiledAnnual Return), and updated records of the company or entity must be attached.
If the application is successful, a relisting certificate would be reissued to the company to that effect.
Importance of Filing Annual Return
Below are some of the massive benefits and importance of filing Annual Returns with CAC in Nigeria.
1. It helps the company or entity give notice to the Commission of the entity’s continued existence, further to which the entity’s name is retained on the register kept by the commission.
2. Filing Annual Returns saves time, especially in a situation where a business or company require a post-incorporation service and must obtain a document or process any other application at the CAC office
3. An up-to-date annual return filing is usually one of the requirements for most contract bids in public or private establishments and an entity desirous of meeting these requirements must ensure that its records are updated as well
4. Failure to file the Annual Return on time will result in a penalty which you could pay more than the initial amount
Conclusion: How To File Annual Returns in Nigeria
In conclusion, I hope this article has provided vast knowledge regarding how to file Annual Returns in Nigeria with CAC, and the penalty involved for not filing. If you have any suggestions or recommendations feel free to comment below
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