Everything Your Need to Know About CAC Annual Returns

Congratulations! You’ve navigated the hurdles of brainstorming a business  or NGO idea, choosing a name, and successfully registering your company or NGO with the Corporate Affairs Commission (CAC). You hold your certificate of incorporation, a symbol of your entrepreneurial journey officially beginning. But what comes next? Beyond marketing, sales, promotions and operations, a crucial, and often overlooked, responsibility of every registered business in Nigeria is the filing of Annual Returns.

Many entrepreneurs either don’t know what this is or confuse it with something else. This simple compliance step, however, is the lifeline that keeps your business legally active and in good standing with the government. Neglecting it can lead to serious penalties and missed opportunities.

This article will break down what annual returns are, why they are critically important, and how you can ensure your business remains compliant.

What Exactly Are Annual Returns?

First, let’s clear up the biggest misconception: Annual returns are NOT tax returns.

This is the most common point of confusion for business owners.
Tax Returns are filed with the Federal Inland Revenue Service (FIRS) or your State’s Internal Revenue Service. They are a declaration of your company’s income over a financial year to calculate the tax you owe.
Annual Returns, on the other hand, are filed with the **Corporate Affairs Commission (CAC). It is a yearly statutory filing that provides a snapshot of your company’s information and confirms its continued existence.

Think of it this way: The CAC is like the National Population Commission for companies. Just as the government needs a census to know who its citizens are and where they live, the CAC requires an annual update to confirm that your registered business,  company or NGO is still active and to keep its records current. It is essentially a “proof of life” for your business.

• This yearly report contains information such as:
• The registered name of the company.
• The registered office address.
• The company’s principal business activities.
• Details of the company directors and secretary (if any).
• A summary of share capital and details of shareholders (for limited liability companies).
• For limited liability companies, a copy of the company’s financial statements for the year.

Crucially, you must file annual returns whether your company made a profit, incurred a loss, or was completely dormant (did not do any business) throughout the year. The obligation is tied to your company’s registration status, not its financial performance.

Why Filing Annual Returns is Non-Negotiable

Failing to file your annual returns can have severe consequences that can cripple your business. Here’s why it’s so important:

1. It is a Legal Requirement:

The Companies and Allied Matters Act (CAMA) 2020 makes it mandatory for every registered entity—Business Names, Private Limited Companies (LTD), and Incorporated Trustees (NGOs, associations)—to file annual returns. Non-compliance is a direct violation of the law.

2. To Maintain an “Active” Status:

This is perhaps the most practical reason. The CAC publicly lists the status of every company on its online portal. Companies that are up-to-date with their filings are marked as “Active.” Those that are not are marked as “Inactive.” An “Inactive” status is a major red flag.

For example, Tunde runs “Tunde’s Logistics,” a registered business name. He applies for a major delivery contract with a large corporation. During their due diligence process, the corporation’s procurement team runs a public search on the CAC portal. They discover Tunde’s business is listed as “Inactive” because he hasn’t filed returns for two years. Fearing compliance issues, they award the contract to a competitor whose status is “Active.” Tunde lost a game-changing opportunity over a simple filing he overlooked.

3. Access to Financial and Business Opportunities:

Banks, investors, and government agencies will almost always verify your business status before engaging with you. You cannot get a corporate bank account, apply for a business loan, bid for government contracts, or attract serious investors if your company is listed as “Inactive.”

Take for instance, Amaka wants a loan to expand her fashion company, “Amaka Designs Ltd.” She prepares a brilliant business plan and submits her application to the bank. The bank’s credit team checks the CAC portal as part of their Know-Your-Customer (KYC) process. Seeing the “Inactive” status, they rejected her application immediately. To the bank, an inactive company is not a viable entity to lend money to.

4. Avoidance of Penalties and De-registration:

Failure to file on time attracts a daily penalty for every year you default. These penalties accumulate and can become a significant financial burden. Worse still, if a company fails to file for a consecutive number of years, the CAC is empowered by law to assume the company is no longer in business and can strike its name off the register. Reinstating a de-registered company is a far more expensive and complicated process than timely filing.

When and How to File

For New Companies: Your first annual return is due 18 months after the date of incorporation while for business name and NGO, it 12months after the date of incorporation.
For Existing Companies, Business names or NGOs: You must file once every calendar year (from January 1st to December 31st). For example, the 2025 annual returns can be filed anytime within 2025.

The process is done entirely online through the CAC’s portal. While it is possible to do it yourself, the process can be technical. It is often smoother, faster, and safer to engage the services of a CAC-accredited agent, such as a lawyer, a chartered accountant, or a firm that specializes in corporate compliance, to handle the filing on your behalf.

A Small Act with Big Implications

Filing your annual returns is not just another bureaucratic chore; it is a fundamental aspect of good corporate governance. It keeps your business healthy, legally sound, and ready for opportunities. Don’t let your hard work in building a business be undone by neglecting this vital responsibility.

Take a moment today to check your company’s status on the CAC public search portal. If you are behind on your filings, make it a priority to bring them up to date. The peace of mind and the open doors that come with being a fully compliant, “Active” business are well worth the effort.