- September 4, 2020
- Posted by: admin
- Category: Business plans, CAC
ANNUAL RETURNS FOR REGISTERED COMPANY
Annual returns are a mandatory statutory requirement for every registered business entity or organization in Nigeria, regardless of the legal structure either as An (Enterprise, Limited Company, or Incorporated Trustees). To facilitate the accurate keeping of an up to date record of the registered company with the commission and to show that the company is not dormant, but operative.
Business Name/ Enterprise/ Ventures/ Sole Proprietorship is to file their annual returns with the Corporate Affairs Commission not later than 30th June every year except the calendar year in which the business name is registered does not end by December.
Limited Liability (private or public) Companies to file returns annually in the prescribed form provided not later than 18 months after incorporation with the Corporate Affairs Commission (CAC) and for the subsequent year, their annual returns should be file with the Commission immediately after holding the annual general meeting for the year.
The law empowers the Commission to strike off the name of a company or business from the Register of Companies; whereby there is a reasonable basis to believe that a company is not in operation, after following due process of inquiry as to the status of the company. In most cases, the commission relies on one major criterion that the failure to file annual returns is an indication of the company being dormant.
Advantages of Filing Annual Returns
The Corporate Affairs Commission in September 2015 started the delisting or striking out of many dormant registered companies due to not filing their annual returns with the commission.
It helps to keep the company or entity’s name on the register at CAC. Failure to file annual returns is a signal that the company may not be in operation. As such it could be de-listed from the register.
The annual cost of the filing fee is not expensive but if not done, the company risks the chance of its records being struck out.
If the filing of annual returns is not done within the stipulated period, the company or business will not only pay the filing fee but will incur an additional fee as a penalty for late filing of annual returns which is higher than the filing fee.
It saves time especially in the situation when a business or company needs a post incorporation service and has to obtain a document or process any other application at the CAC. The commission will not process any application by a registered entity unless the annual returns which are been filed are up to date and penalties, if any, paid up.
An up-to-date annual return filing is usually one of the requirements for most contract bids in private or private establishments.
To read more on annual returns, download this guide now!