Once business owners have registered or incorporated (as it is rather called in business parlance) their businesses with the corporate affairs commission (CAC) they think that that’s where it ends.
Some of them even get carried away by the euphoria of the CEO title and they fail to take note that incorporating a business or company is one step and after the incorporation there are other steps to be taken which filing annual returns with the CAC is one of the most important steps to which you are expected to do on yearly bases in other not to get your business or company delisted with your favorite chosen company/ business name re-assigned to another entity.
Annual return is a mandatory statutory requirement for every entity incorporated with the CAC in Nigeria. It is a yearly statement or balance sheet that provides an outlook of a company’s performance for the year, and its financial position and goes along to show that the corporation is still in existence and still in full operation and to enable the CAC to keep an up to date record of the entity.
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It is a mandatory statutory requirement by the company and allied matters act (CAMA) that every business name, company or incorporated trustee in Nigeria must fulfill at least once every year to the Corporate Affairs Commission (CAC) in other to keep the commission abreast with what is going on with the company and to know that the entity is still active, still in existence and still in full operation.
Newly registered companies are statutorily required to start filing annual returns 18 months after their incorporation.
Limited liability (private or public) Companies are statutorily required by CAMA to file their annual returns with CAC within 42 days after its annual general meeting (AGM) was held for the year. While Business Names (sole proprietorship/ partnership) are statutorily required by CAMA to file their annual returns with CAC not later than 30th June of every year except the year of incorporation. So also, Incorporated Trustees must file Annual Returns between the 30th of June and the 31st of December for each year except the year of incorporation.
For the sake of emphasis, the basic reason why companies are statutorily required to file annual returns every year is to let the CAC know that the company is still active, still in business, still running and to keep the CAC abreast with what is happening with the business/company.
There are numerous benefits, hence reasons business entities/ Incorporated trustees should file their annual returns, some of which include;
- Your entity may get delisted from the CAC database if you fail to file its annual returns for a long period of time.
2. It helps to show that your entity is still in existence and still in full-time operation.
3. It goes a long way to show that your entity is not involved in any shady deals since you constantly send your records to the CAC.
4. Some government contracts, bids, and grants can only be approved or granted to your company if there’s a record of you constantly filing your annual returns with the CAC.
5. It protects your favorite-chosen business/ entity name from being reassigned to another entity.
These and many more are some of the reasons you should consider always filing your annual returns with the CAC because it is highly important.