CAC Compliance Requirements: Filing Annual Returns for your limited liability company in Nigeria

What is Annual Returns?

Annual Returns, like the name suggests, is a Return you file with the Corporate Affairs Commission annually to show the state of your company, its operations, annual turnover, net assets value, directors, among others. In other words, it is returns you file with Nigeria’s Corporate Affairs Commission to show the status of your company for the year of its filing.

Annual Returns form part of a company’s formal record at the Companies’ Register which is kept with the CAC and can be submitted to government agencies if needed.

When are you required to file Annual Returns with the Corporate Affairs Commission?

Every company incorporated in Nigeria is expected to file its annual returns annually. You are however not required to file annual returns with the Corporate Affairs Commission for a period of eighteen months, post-incorporation. The filing requirement commences at the end of eighteen months from the time of incorporation of the company in Nigeria. This does not mean that you will not file your returns; the only year you are not required to file your annual returns is the year of incorporation of the company. You are required to file your returns with the CAC for every year thereafter, before the end of June 30 in each year.

Should we file if our company is yet to commence operations?

Annual Returns filing is statutory. It is a compliance requirement and every registered company in Nigeria is expected to file their returns with the CAC annually. This requirement is contained in the Companies and Allied Matters Act, the law that governs business operations in Nigeria, and, until it is changed, the requirement remains. It is immaterial if the company is yet to commence operations in Nigeria. You are expected to  keep the CAC abreast on the status of your company so long as it is registered in Nigeria. Its operations [or lack thereof] is completely immaterial and failure to file for annual returns attracts penalties for late filing whenever you do comply with the filing.

Filing timeline: When are We Expected to file our Returns?

In Nigeria, limited liability companies are expected to file their annual returns within a period of 14 (fourteen) days from the date from their annual general meeting. Filing annual returns after that time will attract daily penalty for default.

 Importance of filing Annual Returns

1. It is a statutory requirement: Every entity registered to carry on business in Nigeria whether as a Business Name, limited partnership, limited liability partnership, incorporated trustees, or company, is required by law to file their annual returns per year of existence. The law mandates it and you have to comply with it, as failure to comply with this requirement can lead to your registered company being marked as “inactive” on the company portal, and, with time, striking off of your company name from existence.
2. Unlimited access to post–incorporation services at the Post-incorporation portal: Only entities that have filed their annual returns up to date can make post-incorporation filings for their companies with the CAC. Examples of these services include: appointment and removal of company secretary, appointment and removal of directors, alteration of the memorandum and articles of association of the company, changing the registered address of the company, applying for and obtaining certified true copies of company documents, alteration of share capital, allotment and transfer of shares, among others. If your company’s annual returns filings are not up-to-date, the CAC will require you to rectify your filings before you can proceed, or before they can approve your post-incorporation filings at the Portal.
3. Confirmation of the company’s existence: The easiest way to confirm your company’s continued existence is by filing your company annual returns. If you fail to do so, your company status will change from “Active” to “Inactive” and this can possibly impact your business dealings with external partners when they conduct their due diligence checks on your entity and come upon same marked as “Inactive”.
4. Eligibility to bid for contracts: To bid for certain contracts, especially with the Government, you are required to have an “Active” company. This is usually one of the requirements set by these institutions as a pre-qualification requirement, so, without evidence of your annual returns, you may be ineligible to bid for certain contracts or Tenders.

Documents and information you need to file Returns for your company in Nigeria

1. Address of the company
2. Branch address of the company [if any]
3. Details of the main objects of the company
4. Particulars of directors of the company: names, addresses, phone numbers, emails, valid ID details, occupation
5. Particulars of persons with significant control (PSC) in the company. These are persons/entities with at least over 5% shareholding in the company
6. Year of filing of returns
7. Particulars of the company’s annual turnover
8. Particulars of the company’s net asset value for the year (in ₦)
9. Balance sheet and profit and loss accounts of the company certified by the directors of the company

Who can file annual returns on your company’s behalf?

Filing annual returns in Nigeria is a post-incorporation matter which the principal officers (directors, secretary) of the company cannot do by themselves unless they are professionals accredited by the Corporate Affairs Commission to do so (for example, where the company secretary is a lawyer accredited by the CAC). That stated, only accredited individuals and Firms can file annual returns with the CAC. Individuals that can be accredited by the CAC include: legal practitioners, chartered accountants, chartered secretaries. Firms that can be accredited include law firms and accounting firms. It is only persons within these categories that can file annual returns for your company in Nigeria.

How to file annual returns for your company

1. Gather all relevant information about the company, its financial information for the year, and the details of its principal officers.
2. Gather necessary audited documents if you wish to submit those with the filing.
3. Engage accredited professionals like our company or our managing director to file your returns for you.
4. Pay the necessary fee to them.
5. Await the approval of your company’s Returns from the CAC. Upon their approval the Commission will issue the accredited agent a Letter of Acknowledgment for the filing of your Returns for the year under reference. The letter will acknowledge the year of filing, reference number for the filing, alongside your company details and a reminder to file annual returns for subsequent years as and when due to avoid payment of fines for late filing.
6. Receive copy of acknowledgment letter from the accredited professional and file same in your records for record purposes and reference.

Are there any effects for failure to file annual returns?

1. Payment of fines/penalty for late filing: As aforementioned, a company is expected to file its annual return for a particular year not later than the 30^th of June in the following year. If you fail to file the Return within the stated period, your company is liable to pay penalty whenever it wishes to file the said Return. To avoid this, you should endeavour to file your Returns as and due in order to reduce cost of filing same.
2. Deactivation of the company at the CAC portal: Where your company fails to file annual returns, the CAC will mark the company as “Inactive” on the Companies Registration Portal which is searchable and viewable by the whole world. If anyone searches for the company name, it will come up as “Inactive” rather than “Active” and this can affect any potential business deals the company may be seeking to enter into.
3. Striking out of company name from the Companies Register: If a limited liability company fails to file its annual returns consecutively for a period of ten years, the CAC will delist the company name from its Register and strike out same. Thereafter, the company name will be marked as “Struck out” on the CRP.

How do we then proceed to file our company’s Annual Returns with the CAC?

Please gather all relevant information that you need for the filing, then you can reach out to us via email at [email protected] and we will be glad to help you. We are Nigeria’s leading providers of business consultation and compliance services to Nigerian corporations and international corporations with Nigerian subsidiaries. We will be happy to ensure your company’s compliance with extant Nigerian regulations and further ensure that your company keeps itself updated with the CAC and other relevant regulators.