By Benita Ayo
Recently, there has been a barrage of incidents where Corporate Accounts of business entities incorporated in Nigeria got deactivated by the Corporate Affairs Commission (CAC), Abuja.
The reason is not far-fetched. It is a strict requirement of the law that all categories of business entities duly registered by the Corporate Affairs Commission, Abuja, must comply with the extant provisions of the Companies and Allied Matters Act (CAMA) 2020 by filing their Annual Returns at least once in every calendar year.
In practice, the relevant forms as it relates to each business entity are filled out by a Corporate Counsel who then uploads same for submission of the Return at the CAC portal with the audited Financial Statements of the Company/business entity duly annexed.
Upon approval, the Corporate Affairs Commission issues a Certificate of Annual Returns in favour of the business entity for the appropriate financial year.
Penalties for Non-Compliance
The Companies and Allied Matters Act (CAMA) 2020 stipulates stiff monetary measures for non-compliance with its rules on filing Annual Returns. For example, failure to promptly file the Annual Returns of your business within time and which under the current clime is on or before 30th June of each financial year attracts a fine of N5,000 (Five Thousand Naira Only).
Accrued default of Annual Returns filing attracts deeming the business entity as ‘inactive’ on the CAC register. This is a huge red flag as it turns potential investors away from doing business with the company.
Finally, if after a considerable number of time, the business fails to file its Annual Returns, in spite of the ‘inactive’ tag on its account with the CAC, the Commission proceeds with deactivating the account and finally deletes the company name from its register.
Conclusion
From the foregoing, it becomes imperative to ensure that upon the receipt of the certificate of incorporation of your business entity, one must engage and retain the services of a seasoned Corporate Counsel to ensure that all that is necessary is always done and complied with in order to keep and maintain the corporate image of a business.
For further consultations, you may reach me at WhatsApp: +2348063775768; and Email: [email protected]
Benita Ayo is a Seasoned Corporate Commercial Counsel with over 9 years post-call experience. She has handled myriads of briefs in Corporate/Commercial Practice, Employment Law as well as Property Transactional Practice. In addition, she is also a Regulatory Compliance professional helping her clients (corporate) safely and deftly navigate the murky legal waters of industry rules and regulations related to their peculiar businesses.