This Information is both for old owners of companies and prospective new registrars of companies.

This deals with your Annual returns and the harzards of not following the rules of company floatations:

After your company has been incorporated, it doesnt just end there in fact the legal work and requirements has just begun unless without knowing it, your company could be delisted after some time because of the failure to follow some certain rules and protocols which includes the following:

1. A major requirement is that every company must have a company secretary. What they mean by company secretary isnt the secretary at the door of your company or customer care secretary, the company secretary is he one that handles most of the legal work that relates with the C.A.C so it wont be delisted or desubscribed for failure to do certain things. Such things incllude:

a. Filing of your ANNUAL RETURNS:

Most companies are delisted because of their failure to pay the Annual returns of the company. An Annual return payment is a yearly payment or tax to the government showing that your company exists and its still functioning. The C.A.C is so secretive about this because the more people are Ignorant about this, the more fees you pay to them when your in their problem.

Section 370-378 of the Companies and Alied Matters Act (CAMA) 1990 PROVIDES FOR THE PAYMENT OF THE ANNUAL RETURNS AND PUNISHMENTS.

Every company formed from the date of its incorporation must pay its first Annual Returns immediately after 18 Months of registration. That is if your company was formed in January 2006, you should pay your Annual returns from the first of July 2008 and any immediate default attracts a late fee of N100 per day for not complying.

The fees for the Annual returns is Just N2,000 PRESENTLY which is subject to increase likely Next year. So bring out your calculators AND START CALCULATING YOUR ANNUAL RETURNS YOURSELF in case you have defaulted.

The hazards of this is that failure to pay these sums would deproscribe your company from the C.A.C without you been aware and when you might need the company and would need a document from them to show its existence, you would find out that it is no longer there and you have to re-register a new company all over again.

Even before you file your annual returns, it is a must that all companies, whether small or big must go through routine Annual general meetings. I know there are so many companies with just only 2 directors and your wondering why should 2 of you just do an Annual General meeting?

It is important to note that there are also certain documents to be filed with the annual returns fee that requires the company secretary to handle.

The Annual General Meeting just between the 2 directors or more should streamlinre the following:

1. Declaration of Dividend ( As long as there are 2 Directors in the company, your company ought tohave made profit. Whether you just made N100 profit or N1Billion Naira,it shold be noted and divided according to the share structure between 2 of you. So if yor company is a 50-50 thing and you made N150 Profit, after subtracting all the capital expenses and miscellaneous things invested through out the year from that N150, whatis remaining is the dividend that should be shared between the 2 directors or more, whether 50-50 or 80-20 or depending on the share ration.

Now you don't need to disburse the money just like that in cash, but it must be recorded that there was a declaration of dividend and should be noted and attached to the C.A.C. Failure to do this attracts a penalty fee or worse still de proscription from the C.A.C register.

2. Also the presentation of your financial statement of that past year should be declared and attached

3. Minutes of the general Meeting

4. Auditors report     

Also every company must keep in its head or registered office the following;

1.The registrer of members

2. Minute books

3. Registrar of Directors shareholding

4. Registrar of directors and secretaries

5. Accounting Records

To avoid all these wahala and due processes, that is why companies engage Company secretaries to handle all these things at the right time and alert you on the fees and things to do. Most of all these Minutes are already done by the company secretary and files all the bills so that you don't run afoul of the law and pay big penalties that you don't know about.

To see how important the Annual Returns is, you cannot do anything at the C.A.C in future or ask for any document or certified true copy of anything without proof of the Annual Returns paid till date. In case your company wans to take a loan and the bank organizes a search whether the company exists, without that payment of the Annual Returns, you can't do anything.

In case you need your company to add new directors, allot shares or take out a mortgage, purchase new products through the CBN or government auctions or even bid for a new job or proposal and a search at the C.A.C is required, your company will be under the line of fire.

I have a friend whose father registered the company in 1997 and recently the father passed away. So in the process of getting the probate documents and getting the accounts and monies stored in different bank accounts by his father's company, the bank asked for the certified true copy of the Memorandum of Association. The guy also wanted to replace the dad as the new director and when we got to the C.A.C, He was politely told that he should file his annual returns before he can change the director, change the name of the official address of the company or get a certified true copy of the companys incorporation documents.

Lets do the calculation together. N2000 per year for 11 years and 100 per day for each year not paid. All you accounting gurus should help me out here!

Till today, his fathers money is still there and he cant prove otherwise or change the directors because of this small problem and it is still accumulating.

So please don't run afoul of these rules and your Company would be just fine!

cheers!

thanks lawyer. this information is bright, timely
and most revealing. please do not STOP here!

Lawyer, Can I have ur GSM no. I need to call u.

Good, lawyer are you registered with CAC ? Pls call me 08029791708 I have to file my company's returns from 1999 to date.
thks

Thanks, lawyer. Need to get in touch with you too.

For your accounting records management and tax solutions, pls call 0808-488-7912

What if the company has not operated functionally and profitably since inception due to poor economical infrastructure, difficult business environment, financial issue and inability to raise needed funds to operate at least minimally, how does one pay fees from losses, or for a dormant company still trying to become operational.

There should be certain issues that must be addressed before asking companies to fill returns with CAC, the government should be concerned about how the companies are able to survive, stabilize and make profit in this difficult terrain before asking for returns to be filed with CAC. I am not against that, it is the statutory obligation of every company to do so, but a lot of companies are not even operational, some barely manage to survive, for some, their directors are not even able to raise money to support the company. Please post here and lets have more light regarding this point, I am sure CAC is aware that a lot of companies are not operational.
Please if I am wrong, I stand to be corrected.
Thank you.

Let us say a company is registered in 2011, and is asked to bring a tax clearance certificate for a job. How does one go about this? Is there some kind of exemption that the company is given until they have been at least 3 years in operation?

lawyer, would be glad if you can help with this answer.

Mr Stagger, your company doesnt have to have been in operation for 3years to get a tax clearance certificate. Pls call 08084887912 we can fix u up!

oneblacboi:

Mr Stagger, your company doesnt have to have been in operation for 3years to get a tax clearance certificate. Pls call 08084887912 we can fix u up!

HOW? If it is the arrangee way you want to get one, I am not up for such an arrangement.

Its not any arrangee BS, Its 200% Legal

@Lawyer,I wish you'd answer Keystones's queries as I'm sort of in the same boat.

Thanks.

@Lawyer,I wish you'd answer Keystones's queries as I'm sort of in the same boat.

Thanks.

@Lawyer,I wish you'd answer Keystones's queries as I'm sort of in the same boat.

Thanks.

for audit, accounting and tax experts please call 0705 550 9118

How much is due an enterprise registered in 2009 till date?

what lawyer posted is true,because i just went through all this wahala to rectify my company name.i got myself a company secretary, although pricey a little bit, it is worth it in the long run.

nairaxchan: what lawyer posted is thru,because i just went through all this wahala to rectify my company name.i got myself a company secretary, although pricey a little bit, it is worth it in the long run.

Whats the cost like?

some company secretaries charge as much as 2.5million, standard is 500k, but got mine for 300k because of the relationship,

it is a yearly fee, and he/she takes care of all legal matters in respect of your company, he/she ensures you do not fall foul of the law and you are protected legally in all your dealings

nairaxchan: some company secretaries charge as much as 2.5million, standard is 500k, but got mine for 300k because of the relationship,

it is a yearly fee, and he/she takes care of all legal matters in respect of your company, he/she ensures you do not fall foul of the law and you are protected legally in all your dealings

Thanks a lot, I think I would go for that, I've registered a couple of companies in the past few years for different purposes and I need to get all their documentation in order

And why is Keystone's question soo dificult for lawyer to answer?many companies are dormant since inception and where will such money come from?

following

@Lawyer, i want to know if all these rules affects an business registered as an enterprise with the CAC? your response will be highly appreciated

bigx:

Thanks a lot, I think I would go for that, I've registered a couple of companies in the past few years for different purposes and I need to get all their documentation in order

Hi, I notice you are making inquiry about company secretary, if you are in Lagos and you requires the services, my firm would be glad to assist.

Kindly mail me at kleandenation@yahoo.ca.

Many thanks.

jossy26: @Lawyer, i want to know if all these rules affects an business registered as an enterprise with the CAC? your response will be highly appreciated

Our dear lawyer is busy dealing with Omoniles. While you are busy waiting for his reply, let me cheap in mine.

As long as your business or enterprise is registered with CAC, in a matter of one year after registration, they expect you to file annual returns.
The problem however, is that most of us except those big names don't file our returns.
CAC has now created an approach whereby you will have to update your business/company's records before you can make any change on your company's file coupled with penalty payment.

The real challenge is that we may not be able to do without having to do one or two things on our files with CAC.
Example, you misplaced your certificate or the forms, or someone is bringing fund into your business and you want to include them as partners or directors, before CAC attends to your application, they will ask you to update your returns even if it is 20 years and coupled with Penalty payment.

It is then better to start filing returns once your business/company is a year old.

Many thanks.

jossy26: @Lawyer, i want to know if all these rules affects an business registered as an enterprise with the CAC? your response will be highly appreciated

From what I heard return to CAC are only to be made by incorporated companies, Enterprise are not incorporated that is why those who have only business name registered don't have Article and memorandum of association,form CO2, form CO7 and cerificate of incorporation, basically enterprise are sole proprietorship with a business name which is a trademark

I may be wrong but this is my understanding as a layman

HAH:

From what I heard return to CAC are only to be made by incorporated companies, Enterprise are not incorporated that is why those who have only business name registered don't have Article and memorandum of association,form CO2, form CO7 and cerificate of incorporation, basically enterprise are sole proprietorship with a business name which is a trademark

I may be wrong but this is my understanding as a layman

You are wrong please. A business name/enterprises is expected to pay Annual Returns.

omogidi234:

You are wrong please. A business name/enterprises is expected to pay Annual Returns.

Yes one thousand naira annually

Find below

http://new.cac.gov.ng/home/summary-of-fees-and-forms/

Hello, when you said enterprises are to file returns, does it means that they are to prepare annual statements too

Business names don't need statement of affairs or audited accounts to file annual returns

pls how do enterprises file annual return and if I register my business on 1st of May 2015 when do I file the annual return??

Consultville:
Business names don't need statement of affairs or audited accounts to file annual returns

So how do enterprise file annual return? Do they just state the profit to them? How?