Annual Returns is a yearly fee paid by companies (Business Name, Limited Liability, Limited Liability Partnership, Incorporated Trustees) registered with Corporate Affairs Commission.

Once an entity is registered with CAC, the corporation gives the entity certain grace period after which the entity is expected to pay her annual returns yearly. The grace period for an enterprise is 12months while that of Limited liability company and other entities is 18months.

Annual Returns Filing Fees for Entities in Nigeria

Annual return is paid annually to the Corporate Affairs Commission. It is different from Tax. Tax is either paid to the Federal Inland Revenue Services Office (FIRS) or State Inland Revenue offices (IRS) depending on the type of entity you are operating. Annual Return is paid to the CAC whether the entity is in business or out of business. The essence of payment of annual return by registered entities is to enable CAC ascertain if the business owners are still alive and the business active.

Failure to pay your company annual returns can result to so many things. Before this time, failure to pay your company annual return can lead to accruing of penalties and eventual striking off the entity’s name from CAC record. But it goes beyond striking out the company name.

Annual Returns Filing with CAC in Nigeria

Below are some of the implications of non-payment of annual returns of your company:

1. Penalty: non payment of your company annual returns as at when due can result to accruing of penalties. The penalties range from Five Thousand (#5000) to Twenty Thousand naira (#20,000) depending on the type of company you are operating.
2. Post Incorporation Matters: for a company to effect or carryout any services under post incorporation site of the CAC, that company must pay their annual returns to date. Failure to comply will result in denial of the company’s application.
3. Striking out: failure to pay annual returns can result in the name of the entity being struck off the register of companies and from the data base of CAC. Sometimes ago CAC published some names that defaulted in the payment of annual returns and were eventually struck off the register!
4. Visa Denial: non-payment of annual returns can result in your visa application being denied. Once one mentions that he or she is a businessman or woman and the company status is inactive on the CAC portal it leads to automatic denial of the visa application.
5. Contract Denial: many companies have lost contract of recent due to non-payment of the company’s annual return. Once the status of your company is inactive it can lead to denial of contracts. Inactive status of the company implies that the company is not her paying annual returns.
6. Bank Account freezing: the Bank account of companies whose status are inactive have been frozen by the banks. This is a directive from Central Bank of Nigeria (CBN). Once such account is frozen it will be difficult if not impossible to access the account and the monies therein.
7. Credibility: Companies whose status are ACTIVE are seen as credible and reliable company to partner with unlike INACTIVE

In conclusion, annual returns is an obligation every registered entity is expected to perform by law. It is a statutory obligation; hence no company can dodge away from it. It is better to pay your company’s annual return up to date than wait for the implications of non-payment. The implications can be fatal to your business and as the saying goes “prevention is better than cure”. The processing of Annual returns is done by an accredited agent of CAC. Seek for their services and activate the status of your company today!

For further enquiries

Email: info@verazadvocates.com.ng

Call/WhatsApp: 08116486356