15/08/2023
WHY YOU NEED TO FILE YOUR ANNUAL RETURNS. Part 1
What is annual returns?
It is a mandatory requirement that every business name, company or incorporated trustee in Nigeria must fulfill at least once every year to the Corporate Affairs Commission (CAC) in other to keep the commission abreast that it is still active and still in existence.
This is done by making and delivering to the Corporate Affairs Commission (CAC) a return in a prescribed form containing the specified matters relating to the organization by the provisions of the Companies and Allied Matters Act (CAMA).
It is very important to note that filing the annual return by an organization helps to simply keep the CAC abreast that such organization is still actively in operation and still engaging in business activities or otherwise.
An annual return is not the declaration of the profit your company made in a year, it is not a financial document, but rather a yearly statement by an active registered business name or company which is meant to keep CAC updated about the company's activities, composition, and its financial position.
Chapter 16 of the Companies and Allied Matters Act (CAMA 2020), covers everything about filing returns. Section 418 of CAMA 2020 precisely.
There are some misconceptions about annual returns in Nigeria. Some companies, most especially sole proprietorship, believe that they might be heavily taxed if they continue to file annual returns with the CAC. This is not true. All you need to pay yearly to file your annual returns is not up to the profit you would make in your business in a month.
Annual returns is completely different from tax payment.
The Benefits Of Filing Annual Returns?
1. Filing annual returns doesn't only save you the yearly penalties by CAC, it also shows that you are law-abiding and your business is in compliance with the company's regulatory law.
2. It will also give you an edge when accessing government loans or grants. The government would consider an active business first when making decisions on which business to give loans and grants to.
To be continued...
