EXPLAINER: What every business should know about CAC annual returns - Punch Newspapers
Paying taxes does not exempt a business from filing its annual returns with the Corporate Affairs Commission. While both are important compliance obligations, tax payment and annual returns serve different purposes. In a video titled “Annual returns is not tax, know the difference! from the commission’s X handle on Thursday, explained that annual returns are filings made with the CAC to provide updated information about a registered entity and confirm its continued status on the commission’s register. The obligation generally applies whether or not the business was active during the relevant period. Tax payments, on the other hand, relate to a business’s tax obligations arising from its activities and income. Therefore, settling tax liabilities does not amount to filing annual returns with the CAC. Who is required to file? The annual returns requirement covers registered entities under the CAC, including companies, business names and incorporated trustees. Incorporated trustees may include organisations such as non-governmental organisations, churches, mosques and cultural associations. What happens if annual returns are not filed? CAC pushes unified corporate registers to curb illicit finance CAC seeks unified ownership register to fight illicit funds Inside the partnerships building Nigeria’s business giants Failure to file annual returns can result in penalties and compliance issues. Prolonged failure to meet filing obligations may also affect an entity’s status on the CAC register and could ultimately expose it to deregistration in accordance with applicable rules. How are annual returns filed? Annual returns can be filed through the CAC’s online platform. Depending on the type of entity and applicable requirements, the process may involve updating entity details, providing information such as turnover and net assets, attaching financial statements or audited accounts where required, selecting the relevant financial year and submitting the return. Businesses are expected to keep their filings up to date and maintain consistent compliance with CAC requirements. The takeaway For businesses and other registered organisations, paying tax and filing CAC annual returns are separate obligations. Meeting one does not automatically satisfy the other. Keeping annual returns up to date helps an entity maintain its compliance status with the CAC and avoid penalties or other consequences associated with prolonged default. Gilbert Ekugbe Gilbert Ekugbe is a journalist at Punch Newspapers with over a decade of experience reporting on business and economic affairs. He covers markets, corporate developments, finance, and Nigeria’s broader economic landscape. His reporting is informed by extensive newsroom experience and a strong commitment to accuracy and responsible journalism, helping readers understand complex business issues.
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