Annual Returns

I’ve heard this thing several times, wondering what it means. But I realised it is basically the CAC checking the pulse of a company to see if it is still alive. Because we are not accountants we won’t bother with the contents. They are there in section 370.

Who? Everyone files annual returns, whether company business names, or incorporated trustees.

When?

For part A: Within 42 days after the company’s AGM. If the company holds its first AGM within 18 months of incorporation, then no need to file A.R. until 18 months after incorporation. (Remember the company is given grace period of 18 months to hold its first AGM anyway)

Part B: Section 587. The proprietors of the business name should file their annual returns, not later than June 30th of every year, except its first year, and the AR should cover a period of not more than January 1 and December 31

Part C: Section 607. Incorporated trustees must send theirs in not earlier than June 30 not later December 31.

How? The thing should be signed by two directors or one director and secretary; or two proprietors or the Chairman of the IT and secretary. In the Company Regulations, there are different forms for different types of organisations. So you check the rules, pick your form and accompany it with the requirements in Regulation 40

Or else? Section 378 punishes every officer in the company with fine.

The CAC can serve a notice on the company to file its AR. If the company still declines within 14 days, the CAC or a member or a creditor can enforce apply to the Federal High Court to compel the company.

If the company now refuses to hear word finally finally, the CAC can proceed to strike off the company’s name but as with everything in corporate law practice there is a procedure:

  1. First the CAC writes a letter to the company asking how far, been long we saw you, are you guys still carrying on business?
  2. If within one month of writing the letter, the CAC gets no response, then they write a letter fourteen days from the expiration of one month. That letter is called REGISTERED LETTER. The Registered Letter must mention:
  • the previous letter and how they didn’t receive any response
  • The fact that if no response is received again within one month, the CAC will post the company’s name on the gazette for striking out
  1. If the company doesn’t reply the registered letter or it replies to the effect that it is not carrying on business again, then the CAC can publish a notice on the gazette of its intention to strike off the company’s name.
  2. After publishing in the gazette CAC will send a final letter to the company that upon 3 months of receiving the letter, unless the company shows a contrary cause, the company’s name will be struck out.
  3. 3 months later if they don’t hear the company’s voice or the company doesn’t show any cause to the contrary, their name is struck off!

The fact that a company is struck off doesn’t mean it will run away from its liabilities, also, the company can still be wound up.

It is not finished for the company after the striking off. If it wants to be reinstated they (company director, member or creditor) must apply within 20 years of the striking off, to the FHC for the name to be relisted at CAC.

Court makes an order

Company takes an office copy of the order to the CAC, the order becomes effective, everybody is happy.

That’s it, questions up next!

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6 thoughts on “Annual Returns

  1. The issue pertaining to this topic is that a company that is a going concern and eventually makes any form of change has to come back to cac for consent or to keep it up to date on the relative changes. Those time limits within which to make annual returns are very confusing. Help needed, will be much appreciated if that area is clarified. Thank you!

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    1. I will compile a list showing the time within which to file the various returns and post on the blog. Thank you so much for reading and commenting Najib it means a lot ☺

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  2. I should thank you for your method, you know been jovial while addressing issues of law thereby creating a less tensed atmosphere for learning is not something I see everywhere. Please keep it up with the good work.

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