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How to File Your CAC Annual Returns in Nigeria (and Why You Must)

Congratulations! You’ve taken the significant step of registering your business with the Corporate Affairs Commission (CAC) in Nigeria. You have your certificate of incorporation, your corporate bank account, and you’re officially in business. That’s a huge achievement!

However, getting your CAC certificate is not a “one-and-done” deal. Many entrepreneurs, especially those new to formal business, mistakenly believe that once registered, their compliance duties are over. This common misconception is a dangerous one, as it can lead to severe consequences, including hefty penalties and, ultimately, the delisting of your company by the CAC.

Ignoring your annual returns is like getting a driver’s license but never renewing your vehicle’s papers – eventually, you’ll be stopped, fined, and your vehicle might even be impounded. Your business’s legal standing requires ongoing attention.

This guide will demystify annual returns, explain why they are crucial, and provide a simple roadmap to ensure your company remains compliant and active.

What Are Annual Returns and Why Are They Crucial?

Annual Returns are essentially an annual health check and update that your company submits to the CAC. They provide an overview of your company’s activities, shareholders, directors, and financial status for the preceding year. It’s a statutory requirement for all registered entities (companies, Incorporate Trustees (NGO)) and even business names (though their filing process is simpler).

Why they are crucial:

  1. Legal Compliance & Active Status: Filing ensures your company remains legally compliant and ‘active’ on the CAC register. Non-filing leads to your company being flagged as ‘inactive’.
  2. Avoid Penalties: The CAC imposes significant penalties for late filing, which accrue daily.
  3. Access to Opportunities: Many government contracts, bank loans, and investor opportunities require proof of up-to-date annual returns.
  4. Maintain Credibility: Lenders, partners, and serious clients will often check your company’s status on the CAC public search portal. An ‘inactive’ or ‘delisted’ status is a major red flag.

The Consequences of Not Filing Annual Returns

The risks are severe and escalate over time:

  • Financial Penalties: You will incur daily penalties for each year you miss. These can quickly accumulate into substantial amounts.
  • Company Flagged as “Inactive”: Your company’s status on the CAC portal will change to ‘inactive’, impacting credibility.
  • Inability to Undertake Post-Incorporation Filings: You won’t be able to file changes to your directors, address, or share capital.
  • Inability to Access FIRS TCC: The Federal Inland Revenue Service (FIRS) often requires updated annual returns to issue Tax Clearance Certificates (TCC), which are vital for government contracts and other services.
  • Delisting/Striking Off: For prolonged non-compliance, the CAC has the power to strike your company off the register. This means your company ceases to exist legally, and to revive it (if possible), you’ll face even higher fees and a more complex process.
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Imagine a construction company, “Solid Foundations Ltd.,” that secured a few private contracts after registration. The owner, busy with projects, forgets about annual returns for three years. When a major government contract opportunity arises, they are required to submit proof of CAC compliance and a valid FIRS TCC. They discover their company is flagged as ‘inactive’ on the CAC portal, and FIRS won’t issue a TCC without updated annual returns. By this point, the penalties for three years of non-filing amount to over NGN 300,000, and it takes weeks to resolve, causing them to miss the lucrative government tender. This entire ordeal could have been avoided with timely filing.

How-to-File-Your-CAC-Annual-Returns-in-Nigeria-and-Why-You-Must

A Simple Guide to Filing Your Annual Returns on Time

The good news is that the process, especially with the CAC’s online portal, is becoming more streamlined.

Step 1: Determine Your Due Date

  • Your first annual return is due 18 months after your company/NGO incorporation date and 12months after business registration date.
  • Subsequent annual returns are due once every calendar year, no later than June 30th (for companies with December 31st financial year-end) or within 42 days after the company’s Annual General Meeting (AGM), which must be held within 9 months after the end of the company’s financial year. It’s best practice to file annually to avoid issues.

If your company was incorporated on January 15, 2023, your first annual return will be due by July 15, 2024. Then, for the financial year ending December 31, 2024, your next annual return will be due by June 30, 2025. Mark these dates on your calendar!

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Step 2: Gather Required Information You’ll need basic company information, including:

  • Company Registration Number (RC No.)
  • Current share capital and shareholdings.
  • Details of directors and shareholders (names, addresses, sometimes means of identification).
  • Statement of Affairs (for companies with share capital, details of total assets, liabilities, and profits/losses). For small companies, this is usually a simple statement.

For a small consulting firm, your statement of affairs might simply show total income from consulting fees, expenses (rent, salaries, transport), and your net profit/loss for the year. You don’t need a full audited account unless mandated by your articles or specific regulations.

Step 3: Choose Your Filing Method (DIY or Professional)

Once you have your information ready, you have only  option for filing and that is use of CAC Agent as you cannot do this by yourself.

 

For business owners who are short on time or find the portal intimidating, using a CAC-accredited agent (a lawyer, chartered accountant, or chartered secretary) is the best option.

  • Process: You provide all the necessary information to your chosen agent. They will handle the entire filing process on your behalf, troubleshoot any portal issues, and provide you with evidence of successful filing.
  • Pros: It’s completely hassle-free and saves you valuable time. You can be confident that the filing is done correctly.
  • Cons: It costs more, as you will pay the agent’s professional service fee in addition to the official CAC filing fees.

Mr. Ade, who runs a busy logistics company, doesn’t have the time to learn the intricacies of the CAC portal. He engages a CAC agent, provides the required company details, and pays a professional fee of NGN 20,000 (which includes the statutory fee). The CAC agent handles everything, and within two days, Mr. Ade receives confirmation that his annual returns are up to date, allowing him to focus entirely on running his business.

What If You’re Already Behind? (Don’t Panic!)

Many businesses, for various reasons, fall behind on their annual returns. If this is you, the most important thing is to act now.

  1. Check Your Status: First, visit the CAC’s public search portal and search for your company. This will show you if your status is ‘Active’ or ‘Inactive’.
  2. Calculate the Backlog: You must file for every year you have missed. When you begin the filing process on the portal, it will automatically calculate the accumulated penalties for the outstanding years.
  3. File and Pay: The process is the same, but you will need to complete a filing for each overdue year. It is often wise to use a CAC agent in this situation, as they can help streamline the process of clearing a large backlog.
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Facing a large penalty can be daunting, but paying it now is far better than letting it increase or, worse, losing your company altogether.

Finally, your CAC registration is a valuable business asset that protects your brand and gives you credibility. Filing your annual returns is the small, essential act of maintenance required to protect that asset. It is not a complex or expensive burden when done on time.

Think of it as a non-negotiable annual appointment for your business’s health. 🗓️ Set a calendar reminder, decide on your filing, and get it done. By staying compliant, you ensure your business remains in good legal standing, ready to seize any opportunity that comes its way without the fear of being held back by penalties or an ‘inactive’ status. Don’t wait until it’s too late.

Ochidoz Ltd can handle your CAC registrations and  Annual Returns Filing in Nigeria. Click here to send us a WhatsApp chat or give us a call at +2349061182744.