Companies and non-governmental enterprises must register with the Corporate Affairs Commission (CAC). The federal government has mandated official registration for all businesses, requiring them to obtain a CAC certificate. Registered companies also must file their annual returns with the Corporate affairs Commission(CAC).
Annual returns serve as a vital verification check on businesses. Organizations that fail to file their annual returns incur some charges every year. This post will explain what annual returns are, guide you through filing your CAC annual returns, and outline the benefits of timely filing.
What Is an Annual Return?
An annual return is a compulsory levy for all enterprises or incorporated trustees. Payment becomes mandatory after a business officially registers with the Corporate Affairs Commission (CAC). While registering your company or organization with the CAC offers many legal benefits, it also requires organization owners to pay a fee annually through the CAC website. Every enterprise, regardless of its type or structure, becomes taxable at the end of the year. The CAC collects these payments in line with section 417 of Cama 2020, Every registred company must file annual return after its first year of incorporation adhering to the Company and Allied Matters Act (CAMA) is very important, as failure/non-compliance has consequence.
Business owners must file their annual returns every year to maintain their business’s active status on the CAC website. This practice also helps the CAC track organizations still in existence.The type of organization you operate determines your annual payment. For instance, profit-oriented organizations pay NGN5,000, while non-profit organizations pay N10,000 annually.
Although the filing process occurs every year, newly registered businesses are exempt from filing their annual return for the first 18 months. This means new companies do not file their annual return until after their first year and six months of operation.
Benefits of Filing CAC Annual Returns
Filing your returns offers several key benefits:
- Legal Compliance: Nigeria’s constitution directs all registered public and private enterprises to file their annual returns. Business owners who fulfill these legal obligations demonstrate their commitment as patriotic citizens.
- Modification on CAC: Companies that file their annual returns can easily adjust existing data on the CAC website. This includes modifying the organization’s structure, business address, and names of partners or trustees. Organizations that fail to file their annual returns will encounter issues when trying to make these adjustments on the website; they will also face forced payment for both the filing and late payment fees. It is always best to make payments on time to avoid incurring additional charges.
- Maintain Business Credibility Status: Businesses that consistently file their annual returns remain actively registered on the CAC website. However, failing to file these annual returns warrants penalties such as deactivation or dissolution of the organization.
- Compete for Contracts: Businesses vying for contracts must possess a CAC certificate to differentiate themselves from competitors. Some government or private institutions may seek to verify a company’s status on the CAC website. Companies that consistently file their annual returns will remain relevant on the CAC website.
- Enhances Trust: The CAC enhances trust because clients, investors, or potential partners can verify business information on the CAC website. Anyone can access the CAC website to check a business’s active or inactive status. The chances of getting scammed by a registered business are significantly slimmer than when dealing with an unregistered business. Individuals and enterprises can trust companies with their financial resources if those companies are actively registered on the CAC website.
- Avoid Penalties: People who file their annual returns avoid penalty charges. Penalty charges accrue daily, and failure to make these payments will eventually lead to the dissolution of the business.
Step-By-Step Guide on How to File Annual Returns
The following guide explains how limited liability companies and incorporated trustees can file their annual returns:
- Log in to the official CAC website: post.cac.gov.ng.
- Locate the “annual returns” menu option and begin your filing process.
- Provide relevant company information and proceed to the next step.
- Make online payments through the CAC portal.
- You will receive a verification notification confirming your payment.
- Next, you will see the “document upload” option. Click on it, and you may choose to avoid uploading any documents.
- Click “continue” (regardless of whether you submit any documents).
- You have now completed the filing process. The application will remain pending for 7-14 working days before confirmation. Keep checking the CAC website to confirm your application’s status.
- Once the application is approved, download the acknowledgment letter. With this, you will have successfully filed your annual return.
- You are to repeat the process after one year.
When Do I File Annual Returns to the CAC?
As the name implies, filing returns is a yearly requirement by the CAC. Companies that fail to file their annual returns incur penalty charges and lose their active status. Therefore, knowing the right time to make payments becomes essential to avoid business deactivation or dissolution.
Registered businesses like limited liability companies must make annual returns by the last day of the year (December 31st).
Incorporated trustees must make their annual returns before June 30th every year. Businesses receive a six-month grace period, from January to June 30th, to make their payment. This means businesses registered in 2025 must make their annual return by January or June 2026. All payments made after the end of June will incur a late penalty charge.
Limited liability companies (LLC) have the privilege of making their first annual return within one year and six months (18 months). Any payment made after the first 18 months will attract a late penalty charge. However, note that this grace period only applies to the first 18 months; subsequent payments must be made every year.
How Much Does It Cost to File Annual Returns in Nigeria?
The cost of filing annual returns varies. Incorporated trustees, LLCs, and other business forms have specified amounts for their annual return filings.
Cost Breakdown Of Filing Annual Returns In Nigeria
| Category | Filing Fee (₦) | Penalty Charge (₦) | Total (₦) |
| Business Name | 3,000 | 5,000 | 8,000 |
| Limited Liability Co. | 5,000 | 5,000 | 10,000 |
| Incorporated Trustees | 10,000 | 5,000 | 15,000 |
How to Change Company Status from Inactive to Active
The Corporate Affairs Commission has the authority to deactivate any business that fails to file its annual return. Should your company’s status become inactive, you can simply change it by visiting the CAC website, logging in, making payments, and paying the penalty charge.
Once you complete this, you must wait for the application to be approved. Inactive businesses may take more time to become active due to additional verification checks on late payments.
If you experience any issues filing your annual return, contact an accredited CAC agent near you for assistance with the process.
Conclusion
Annual returns are a statutory requirement for companies that desire to maintain their active status. Payments for filing annual returns are usually made between January and June 30th of every year. Filing annual returns fulfills the legal obligations set by the Company and Allied Matters Act (CAMA). It also enhances trust with potential clients, investors, and others.
Newly registered companies are not required to file their annual returns until after the first 18 months. However, failure to file annual returns at the appropriate time can negatively affect the business. It is advisable to comply with federal regulations and enjoy all the benefits of registering your business.
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