It is mandatory, under the Companies and Allied Matters Act 2020 (“CAMA”), for every registered business name, private or public company (either limited by shares or guarantee or unlimited), incorporated trustees or partnership to file annual returns with the Corporate Affairs Commission (“CAC”). Prompt and up-to-date filing of annual returns is one way to notify CAC that a business is active and operational. Failure to file annual return may lead to penal sanctions against the directors or principal officers and the company as well as the striking off of the company’s name from the Register of Companies and the name of the defaulting company will appear “inactive” on the CAC online portal.
Is there a time for filing annual returns with CAC?
Business Names or Enterprises: Business Names or Enterprises must file annual returns not later than 30th June each year except the year in which the business name was registered. See Section 822(1) of CAMA 2020.
Companies: By provision of Section 421 (1) of CAMA 2020, the annual return of a company (limited by shares or guarantee or unlimited) shall be completed, signed and delivered to the Corporate Affairs Commission not later than 42 days after the annual general meeting for the year, whether or not that meeting is the first or only general meeting of the company in that year. Every company (except a small company or a company with a single shareholder) shall hold, in each year, a general meeting as its annual general meeting not later than 18 months after incorporation and thereafter not later than 15 months after its last annual general meeting. Please not that late filing may be allowed by the Corporate Affairs Commission subject to penalty for late filing.
Incorporated Trustees: Non-governmental organizations, clubs and not-for-profit institutions which are registered as Incorporated Trustees are required to file annual returns not earlier than 30th June or later than 31st December each year except in the year in which it is incorporated. The return should show 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 incorporated trustee during the year, and of any change which has taken place in the constitution of the association during the preceding year.
Limited Liability Partnership (LLP) and Limited Partnership (LP): A limited liability partnership shall file its annual returns with the CAC within 60 days of closure of its financial year. The financial year is determined by the partners in the partnership agreement, usually January 1st to December 31st each year.
Who Completes and signs an annual return of a company?
By provision of Section 421 (1) of CAMA 2020, the annual return of a company shall be completed, signed by a director and the secretary of the company.
What are the requirements for filing annual returns?
By provisions of the CAMA 2020, the following documents are required for filing annual returns with CAC:
i. A written copy, certified by both a director and the Secretary of the company to be true copy, of every balance sheet and profit and loss account laid before the company in general meeting held in the year to which the return relates (including every document required by law to be annexed to the balance sheet) (See Section 422(1) of CAMA);
ii. A copy, certified by both a director and the Secretary of the company to be true copy, of the report of the auditors on the balance sheet (See Section 422(1) of CAMA);
iii. A copy, certified by both a director and the Secretary of the company to be true copy, of the report of the directors accompanying each such the balance sheet;
iv. A private company shall be required to submit a certificate signed both by a director and the secretary of the company has not, since the date of the last return, or, in the case of a first return, since the date of incorporation of the company, issued any invitation to the public to subscribed for shares or debentures of the company, and where the annual returns discloses the fact that the number of the company exceeds 50, also a certificate so signed that the excess consists wholly of persons who under Section 22 (3) of the Act are not included in the reckoning the number of 50;
v. Duly completed annual return form;
Please note that a small company is exempted from the above requirements but is required by Section 423(2) of CAMA 2020 to send with the annual return a certificate signed by a director and the Secretary stating that:
- The company is a private company limited by shares;
- The amount of its turn-over for that year is not more than N120,000 or such amount as may be fixed by the CAC;
- The company’s net assets value is not more than N60,000,000 or such amount as may be fixed by the CAC;
- None of its members is an alien;
- None of its members is a government, government agent or nominee; and
- The directors among them hold at least 51% of the equity share capital of the company;
Is there any particular format for a company’s annual return?
The form for filing annual returns is prescribed in the schedules to the CAMA 2020.
What are the applicable costs for filing annual returns?
Filling annual returns for Business names costs N3000 while that of a small company and a private limited liability company other than a small company costs N5000. For public companies, annual returns filing is N10,000. A small company, according to Section 394(3) and 423(2) CAMA 2020, is a private company limited by shares of which:
(a) the amount of its turn-over for that year is not more than N120,000,000 or such amount as may be fixed by the Commission;
(b) its net assets value is not more than N60,000,000 or such amount as may be fixed by the Commission;
(c) none of its members is an alien;
(d) none of its members is a government, a government agent or nominee; and
(e)the directors among them hold at least 51% of the equity share capital of the company.
However, there may be additional costs for processing the financial statements or statement of affairs (as the case may be) or for penalties that may have accrued as a result of late filing of the annual returns.
Are there penalties for late filing or not filing at all?
Yes. Late filing attracts a daily penalty fee as may be prescribed by the CAC Regulations. Also, a company that fails to file annual returns as at when due will be rendered “inactive” by CAC. To restore a company’s from “inactive” or “dormant” status to “active” status on the CAC online portal, all outstanding annual returns must be filed with the filing and penalty fees duly paid.
See our previous articles:
HOW TO REGISTER A COMPANY IN GHANA
HOW TO REGISTER A COMPANY IN NIGERIA
HOW TO SET UP A DIGITAL LENDING COMPANY IN KENYA
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We are a commercial law firm in Lagos, Nigeria with a network of lawyers and consultants in Kenya, Ghana and Rwanda.
The above article is not legal advice and does not automatically make our readers our clients unless they specifically instruct us to act or represent them in any way.
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