Running a company in Nigeria involves more than just doing business; it also means ensuring your enterprise complies with all regulations set out by Nigerian law. Compliance is the backbone that keeps your company legally recognised and in good standing. And one often-overlooked duty is filing your Annual Returns with the Corporate Affairs Commission (CAC).
Unfortunately, many entrepreneurs either don’t know about this requirement or mistakenly believe it doesn’t apply to them. The reality is, missing this filing could cost you money, credibility, and even your company’s legal existence.
So, let’s break it all down:
- What annual returns are,
- Who needs to file,
- When and how to do it,
- And the very real consequences of ignoring it.
What Exactly Are Annual Returns?
Think of your annual return as a yearly check-in with the government. It’s a declaration made to the CAC that shows:
- Your company is still active
- Certain details about its structure (like directors, shareholders, address, or trustees)
- Any changes that happened within the year
Under Section 417 of the Companies and Allied Matters Act, 2020 (CAMA 2020), filing annual returns is not optional. It’s a legal requirement.
And as the Latin phrase goes, ignorantia juris non excusat: ignorance of the law excuses no one. Even if your business was relatively quiet during the year, you still need to file.
Who Must File?
Annual returns aren’t just for the big corporations. The obligation cuts across most types of registered entities in Nigeria:
- Private companies (Ltd)
- Public companies (PLC)
- Business names / sole proprietorships
- Incorporated trustees (for NGOs, associations, and foundations)
The only exception? Newly incorporated companies. They’re given an 18-month grace period from the date of registration before they need to file their first return (Section 421(1), CAMA 2020). After that, the obligation kicks in every year.
When Should You File?
The deadlines to file your business annual returns differ slightly depending on the type of entity:
- Private and public companies: Within 42 days after your Annual General Meeting (AGM).
- Small companies (that don’t hold AGMs): By the end of the company’s financial year.
- Business names: By 30 June every year (except the first year after registration). • Incorporated trustees: Usually between 30 June and 31 December for the previous year.
Pro tip: Don’t wait until the last minute. CAC’s online portal is notorious for delays close to deadlines. Filing early saves you both stress and unnecessary penalties.
How to File Your Annual Returns with CAC
The process has become much simpler in recent years, especially with the CAC’s online portal. Here’s a step-by-step guide:
1. Log in to the CAC Company Registration Portal.
2. Select File Annual Returns on your dashboard.
3. Choose your entity type: Company, Business Name, or Incorporated Trustee.
4. Provide the required details, such as:
- RC number
- The year(s) you are filing for
- Whether an AGM was held or not
- Financial year-end date
- Details of directors, shareholders, or trustees
- Updates to addresses or share capital
5. Attach supporting documents where required (for example, audited financial statements for non-small companies).
6. Pay the prescribed fee (generated as a Remita RRR invoice).
7. Submit your return for CAC review.
Once approved, you’ll receive an acknowledgment. Keep this safe , it’s proof that your company is compliant.
Many businesses prefer to work with CAC-accredited agents. While it’s possible to file on your own, agents can save you time and reduce the chances of your return being queried or rejected.
Filing Fees and Penalties
Filing isn’t free, but the fees are modest compared to the penalties for ignoring them. Current CAC rates (subject to updates) include:
- Business Names: ₦5,000 filing fee (₦5,000 penalty if filed late)
- Private Companies (Ltd, including small companies): Filing fee now based on turnover, ₦5,000 for companies with turnover up to ₦100 million (₦5,000–₦10,000 penalty if filed late)
- Public Companies (PLC): ₦100,000 filing fee (₦25,000 penalty if filed late)
- Incorporated Trustees: ₦5,000 filing fee (no change)
And that’s not all. Under Section 425 of CAMA 2020, companies may be fined daily for default, and directors or officers can be personally held liable.
In January 2024, the CAC publicly announced it would start strictly enforcing penalties and recovering unpaid fines directly from directors and officers. This is not an idle threat, it’s an active policy.
What Happens If You Don’t File?
Failing to file annual returns has a ripple effect that can hurt your company in more ways than one.
- Penalties and fines: These build up year after year, making catching up very expensive.
- Inactive status: CAC may flag your company as Inactive on its portal, making you look unreliable to banks, regulators, and clients.
- Restricted services: You won’t be able to process changes like new directors, share capital increases, or even a name change until you’re compliant.
- Striking off: After prolonged default, CAC can strike off your company from its register (Section 605, CAMA 2020). The company ceases to exist legally, though liabilities remain.
- Personal consequences for directors: Officers can face direct sanctions and financial penalties. In serious cases, it could affect future board appointments or regulatory clearances.
- Loss of opportunities: Many tenders, loans, or NGO grants require proof of CAC compliance. An inactive status can block access to funding and partnerships.
Why Filing Matters Beyond Compliance
Filing isn’t just about avoiding fines, it has practical benefits:
- Proof of continuity: Shows your business is active, not dormant.
- Smoother transactions: Banks, investors, and regulators want to see compliance before engaging.
- Legal protection: Keeps your limited liability intact and strengthens your company’s standing in disputes.
- Easier audits and due diligence: Updated records mean less friction during checks.
- Access to growth opportunities: From government contracts to NGO funding, compliance is often a prerequisite.
Common Misconceptions About Annual Returns
A lot of Nigerian business owners fail to make their companies compliant because of wrong assumptions. Let’s clear them up:
- Only big companies need to file. False – Every registered entity, including SMEs and business names, must file.
- Annual returns and tax returns are the same. No – CAC returns confirm your corporate status; tax returns deal with income and tax liability. They are separate.
- You only file once. Wrong – Annual returns are filed every single year.
- Foreign companies are exempt. Not true – If a foreign company is registered in Nigeria, it must comply.
- I can ignore it, CAC won’t notice – With the portal and stricter enforcement since 2024, CAC does notice, and the penalties add up.
Tips for Smooth Filing
- Keep company records updated throughout the year.
- Don’t wait until the deadline — file early to avoid portal delays.
- Work with accredited CAC agents if you’re unsure.
- Attach audited accounts on time (for companies required to do so).
- Clear up any outstanding changes (like directors or address updates) before attempting your return.
- Always keep your filing acknowledgement as proof.
Conclusion
Annual returns may feel like just another compliance chore, but they’re far more important than that. They protect your company’s legal existence, reputation, and access to opportunities. And the penalties for ignoring them are steep.
If your filings are up to date, that’s great, set a system to remind you each year. If you’ve fallen behind, the best time to catch up is now, before penalties grow larger or CAC clamps down further.
And if you’re unsure how to move forward or need help navigating the process, you don’t have to figure it out alone. Guidance from professionals can make the process far smoother and keep your company firmly in “active” status where it belongs.