How to file Annual Returns in Nigeria

Mr Tade had good experience building and decorating homes for individuals. While working on a client’s job, his client (who happened to work in the procurement department of a bank) needed to corroborate the prices vendors at his work place quoted for construction materials; he (the client) asked for Mr Tade’s help with it.

Mr Tade came back with prices almost half what the vendors’ quoted; he was immediately asked to join the bid for the contract.

However, there was a setback; Mr Tade needed to make changes on his company registration documents to be able to bid it. While trying to do this he realized, the company he registered over 10 years ago had been “delisted” by CAC for not filing annual returns.

Mr Tade was on the verge of losing an opportunity worth over 100 million Naira due to an omission that could have been avoided.

What could he have done differently?

In Nigeria, because there are no strict laws guiding Annual Returns and Company Income Tax, people don’t take it seriously until situations like this one occur.

Mr Tade was fortunate enough to get a lawyer who speedily got his documents in order, just in time for use and he was awarded the contract.

Below are the basic requirements for filing Annual Returns

Annual returns are particulars forwarded by a company to CAC (Corporate Affairs Commission) every year. It is very much different from Company Income Tax. Any entity registered with the CAC is under obligation to file Annual Returns to them.

Company Income Tax are taxes paid by companies to the FIRS (Federal Inland Revenue Service). Registered business names do not pay Company Income Tax but they must file Annual Returns to CAC.

Every company must have a Tax Identification Number (TIN) upon incorporation.

The implications of not filing annual returns include

• You risk your company/organization been removed from the CAC register (delisted), you most likely will have to go to court to re-register which would involve extra cost.
• A penalty will be paid for every year not paid for (this means even more cost ; businesses should be trying to save on cost not incur more )
• It might hinder you from getting business contracts (as seen in Mr Tade’s case).

Every company ought to have a secretary who would file the annual returns. It is however cost effective to get a professional (Lawyer/ chartered accountant/ chartered secretary) to advice and deal with issues involving annual returns and company income tax.

Here is what you need to file annual returns for a registered company/ organization.

• Duly completed form of annual returns, Kindly click this link to access the forms.
• Audited financial statement signed by 2 directors and duly certified by a chartered accountant where applicable (not required for Enterprises).
• Evidence of payment of all necessary fees or dues (it is very important to properly keep this).
• Annual returns shall be filed 42 days after holding of annual general meeting for the year.

Annual returns should be filed annually (42 days after holding the annual general meeting for the year; newly registered companies are not required to do this until 18months after registration.  In a case where a company has been registered for years but is yet to file annual returns, here’s how to check to know if the company is still listed with CAC.

• You can search on the CAC website using this link (this is method is not 100% effective as not all companies can be found online; CAC is yet to upload all the names of companies registered with them on their website).
• If you don’t find your company on the CAC website, get a professional (lawyer, chartered accountant or chartered secretary) to file a search for you with CAC.

Overall, make sure you seek professional advice from a lawyer, chartered accountant or chartered secretary when dealing with issues involving tax and annual returns