An annual return refers to profit made on investment, over a period of time. In Nigeria, corporate entities registered with the Corporate Affairs Commission under the Companies and Allied Matters Act (CAMA) are mandated to file annual returns with the Commission (CAC) on a yearly basis.
Even though nonprofit organisations do not make profit on investments, Section 55 of CITA specifically makes it clear that ALL companies, registered with the CAC are to file returns irrespective of tax exemptions conferred on their income,in order to encourage transparency.
Generally,organisations must file annual returns not earlier than 30th June or later than 31st December every year (except the year the organisation was incorporated). However, newly registered organisations begin filing their first annual returns, not later than 18 months after incorporation while older organisations file their annual returns not later than 42 days after their Annual General Meeting.
To file annual returns with the Corporate Affairs Commission, an organisation is expected to visit the CAC website, download and fill out an Incorporated Trustees Annual Returns form (CAC/ IT 4), attach an audited financial statement signed by a chartered accountant and two trustees of the organisation or a statement of affairs, in cases where the organisation is yet to commence operation along with a fee of #5,000.
Complying with this law will aid the maintenance of good organisational structures as it encourages a culture of record keeping and puts compliant organisations on good standing with the commission- accurate and updated records of said organisations will be accessible to the commission which gives room for transparency and accountability.
Failure to file annual returns within the stipulated period will incur an additional cost of #5,000 for every year of noncompliance as penalty. Persistent noncompliance to this law could result in eventual de-registration of errant nonprofits as the commission is left to assume that this organisation is non-operational.
Filing annual returns with the Corporate Affairs Commission as and when due helps to keep the company’s name on the commission’s register, saves time in situations where a nonprofit needs a post incorporation service or documents from the commission and also prevent nonprofits from payment of penalties that apply for late filing of annual returns.
This newsletter is supported by the Commonwealth Foundation. However, the ideas and opinions presented in this document do not necessarily represent those of Commonwealth Foundation, NNNGO or any other organisations mentioned.