Business Post Contributor
By Benita Ayo
It is the general requirement of the law governing the operation of business activities in Nigeria that anyone who seeks to carry on business in Nigeria must register the business within a stipulated timeframe with the Corporate Affairs Commission (CAC).
The appropriate law which regulates business entities in Nigeria is the Companies and Allied Matters Act 2020, which is known otherwise as the CAMA 2020.
The moment after which the Certificate of Incorporation is given by the Registrar-General of the Corporate Affairs Commission, a register of the company is opened at the Corporate Registry, Abuja.
Every company so registered is expected to file its Annual Returns within a stipulated timeframe in each financial calendar year. Any filings done outside the stipulated timeframe result in the payment of default fees.
So, what exactly are these ‘Annual Returns’? In a nutshell, an Annual Return is the profit or loss on an investment over a one-year period. It is rendered at the end of a company’s financial year-end calendar.
Implications Of Not Filing The Annual Returns Of A Business Entity
The following are implications where a company or business entity fails to file its Annual Returns at its financial year-end;
It is presumed that the company or business entity no longer does business and has no intention of doing any future business.
The company or business losses out on lucrative business opportunities as no serious would want to invest in a company whose corporate status reflects ‘inactive’ as a result of failure to file its Annual Returns.
The company or business entity gets deactivated from the CAC register.
Conclusion
It is always imperative that business owners, after obtaining the Certificate of Incorporation of their business entities, must, as a matter of compulsion and necessity, engage a Legal Professional to provide Corporate Advisory Services on matters of the operation of the CAMA 2020 as it relates to and affects their businesses.
In this way, they can always be clear against legal penalties for non-compliance.
For further consultations, you may reach me at WhatsApp: +2348063775768, and email: [email protected]
