CORPORATE AFFAIRS COMMISSION (CAC) TO FULLY ENFORCE PENALTIES ON ENTITIES IN DEFAULT OF FILING ANNUAL RETURNS.

syntaxlp

The decision of the Corporate Affairs Commission (CAC), on 3rd November 2023, to start the full enforcement of penalties, from 1st January 2024 on registered entities, including their directors and officers, who have refused to comply with the statutory provision of filing Annual Returns, is well grounded under the Companies and Allied Matters Act (CAMA) 2020  and the Companies Regulations (CR) 2021.

The filing of Annual Returns is a mandatory provision of the law and non-compliance could have some of the following consequences:

  1. The Company/Business name having an “Inactive” status with the CAC.
  2. CAC may strike out the Company/Business name from its register.
  3. The affected Company/Business name will be liable to pay extra fees for late filing.

The Commission (CAC) has further declared that it shall recover all filing fees and penalties for non-filing from Directors and officers of any entity even where it is already struck off or has gone into liquidation.

It is noteworthy that the CAC already commenced the striking off of Companies/Business Names since 31st July 2023, and thus advisable to file your Annual Returns immediately, to avoid the harsh penalties to be implemented before 1st January 2024.

Any registered entity which is struck off the register due to non-compliance, could make a comeback by either writing an application to court for an order restoring the company to the register or a formal application to the Registrar-General of CAC, explaining the reasons for non-compliance, accompanied by all payable fees and penalties incurred from non-filing. This is very tedious, time-consuming and financially draining.

Under CAMA 2020, every registered Company/Business name MUST file their Annual Returns every year with CAC after the 18 months period from year of registration must have ended. The proper time to file is as follows:

  1. Business: Not later than 30th June of every year.
  2. Company: Not later than 42 days after the Annual General Meeting (AGM) for the year.
  3. Incorporated Trustee: Between 30th June and 31st December of every year.
  4. Limited Liability Partnership and Limited Partnership: Within 60 days of closure of financial year.

In conclusion, filing of Annual Returns is a compulsory requirement for every registered entity in Nigeria which must be taken with all seriousness to avoid the repercussions of failure to do so.

Leave a comment