A business name in Nigeria, as defined under CAMA 2020, is the registration structure for sole proprietors and partnerships, distinct from incorporated companies. It lacks a separate legal personality, meaning owners are personally liable for business obligations.
Given its simplicity and affordability, it’s popular among SMEs, such as petty traders and artisans. However, like any registered entity, business names have compliance requirements, including filing annual returns with the Corporate Affairs Commission (CAC) to keep their registration active and details updated.
The importance of this filing stems from CAMA 2020’s emphasis on transparency and ease of doing business, enacted on August 7, 2020, to modernize Nigeria’s business environment. Annual returns ensure the CAC has current information, preventing fraud and maintaining a reliable business registry.
How to File CAC Annual Returns for Business Name in Nigeria — Legal Requirements, Benefits & Step-by-Step Guide
This guide breaks down why it’s important, what’s legally required, the benefits, and how to file step by step, with a nod to how SplashDict can simplify the process.
Understanding Annual Returns
Annual returns are yearly filings submitted to the CAC to:
- Update your business details (e.g., address, ownership).
- Confirm your business is still operational.
- Ensure compliance with CAMA 2020 (Section 822).
It's crucial to distinguish that filing annual returns is separate from tax obligations handled by the Federal Inland Revenue Service (FIRS). While annual returns focus on corporate compliance, tax filings pertain to financial reporting and tax liabilities.
Notably, annual returns must be filed every year following the year of registration. The deadline for business names is June 30th annually. Timely filing prevents penalties and maintains the business's legal status, irrespective of its operational activity.
Legal Requirements for Filing Annual Returns of Business Name
Section 822 of CAMA 2020 mandates every registered business name to file an annual return with the CAC. This involves completing Form CAC/BN 6, which requires:
Business Identification: Business name and registration number.
Operational Address: Principal place of business and any branches.
Nature of Business: Description of business activities, noting any changes.
Ownership Details: Information on proprietors or partners, including any modifications.
Operational Status Declaration: Confirmation of the business's operational status.
Financial Summary: Annual turnover and net assets for the reporting period.
Unlike incorporated companies, business names are not required to submit detailed financial statements, simplifying the compliance process.
Why Filing Annual Returns Matters
Timely filing offers key benefits:
- Legal Standing: Keeps your business active, ensuring you can operate and enforce contracts (Section 821).
- Credibility: Signals compliance to banks, customers, and partners.
- Penalty Avoidance: Avoids fines (₦5,000–₦10,000 per year) and late fees.
- Deregistration Protection: Prevents removal from the CAC register after two missed years (Section 819(5)).
- Future Ease: Simplifies updates, licenses, or post-incorporation services.
Consequences of Non-Compliance
Failure to file annual returns can lead to:
Financial Penalties: Accumulation of fines for each year of default.
Risk of Deregistration: Potential removal of the business name from the CAC register, necessitating re-registration.
Operational Limitations: Inability to enforce contracts or access certain legal remedies.
Reputational Damage: Perception of unprofessionalism, potentially deterring clients and partners.
Step-by-Step Process for Filing Annual Returns
Filing annual returns for a business name involves the following steps:
Gather Necessary Information:
Business registration number and full name., Principal and branch office addresses, Annual turnover and net assets, Details of proprietors/partners, including valid identification.
Engage a CAC Accredited Agent:
Business owners cannot file directly; an accredited agent must handle the submission. SplashDict offers professional services to manage this process efficiently.
Complete the Filing Process:
The agent will prepare and submit Form CAC/BN 6 on your behalf. Payment of the required filing fee will be facilitated.
Obtain Confirmation:
Upon successful filing, receive an acknowledgment from the CAC confirming compliance.
Conclusion
Filing annual returns is non-negotiable for Nigerian businesses. It safeguards your legal status, credibility, and growth opportunities. With SplashDict, the process is fast, affordable, and stress-free—so you can focus on what matters most: growing your business.
File Your Business Name Annual Returns in Nigeria with Ease
Here’s how SplashDict's CAC-accredited experts assist you:
