Hey there! We are back with our Chronicles of Becky.
Becky has been running her company for five years now. Her staff strength had grown to 15 full time and part time workers. Her business was growing and so was her clientele.
One Monday morning, Becky got to work and as usual she picked up one of the national dailies (she usually buys them from the newspaper vendor down the road).
As she flipped through, a particular headline caught her eyes. It read:
“CAC To De-list 50, 000 Companies Over Annual Returns”.
She went ahead to read it again and discovered that the Corporate Affairs Commission was set to remove the names thousands of companies from their register for failing to file their annual returns.
Looking back she remembered that her lawyer had mentioned it to her some years back, but she ignored him then and said she would make the payment later. Immediately she called her lawyer and asked to help her with the payment of the fees. The initial fee was N8,000 but she ended up paying an additional N24,000 as penalty for late payment.
The Corporate Affairs Commission has made it compulsory for every registered company and business name to file their annual returns at the end of each year. For newly registered companies, the first annual returns should be filed after 18 months of incorporation while for sole proprietorship its 6 months.
The headline above, was released in September 2015 and according to the Registrar General, 9,347 companies had so far been de-listed by the commission since inception for failing to file their annual returns.
Why should my Company pay annual returns?
1. Failure to pay annual returns puts your company at risk of being de-listed by the CAC. When a company is delisted, it means its name has been struck off the register of the CAC. Meaning your company no longer exist.
2. You cannot carry out any post incorporation process without payment of annual returns. This means you cannot request for CTC of your Company’s certificate, you can’t change your directors, secretary or address and so many more.
3. Filing annual returns when due will prevent businesses from payment of penalties that apply for late filing of annual returns.
4. Up-to-date annual return filing is usually a criterion for most contract bids in public or private establishments.
Note that the penalty for each year is N3,000 so be wise and make hay while the sun shines because you never can tell when you will need to process something at the CAC.
Thanks for reading till the end. It will be nice to know your thoughts on this. Catch ya!
Ed’s Note – This article was originally posted by the author here.