EXPLAINER: What every business should know about CAC annual returns

Annual returns and tax payments are two distinct compliance obligations for businesses registered with the Corporate Affairs Commission (CAC) in Nigeria. While tax payment is a mandatory financial requirement tied to a business's income and activities, annual returns involve submitting updated information about the entity to the CAC to maintain its status on the commission's register.

Annual returns are mandatory for all registered entities, including companies, business names, and incorporated trustees like NGOs, churches, mosques, and cultural associations. Failing to file these returns can result in penalties and compliance issues. Prolonged non-compliance may even lead to deregistration of the entity.

To file annual returns, businesses must use the CAC's online platform, updating entity details, providing financial information, attaching necessary documents, selecting the appropriate financial year, and submitting the return. Keeping these filings current is crucial for maintaining compliance status with the CAC and avoiding penalties or other consequences of prolonged default.