An annual return refers to profit made on investment, over a period of time. In Nigeria, corporate entities registered with the Corporate Affairs Commission (CAC) under the Companies and Allied Matters Act (CAMA) are mandated to file annual returns with the Commission, on a yearly basis.
Even though nonprofit organizations do not make a profit on investments, Section 55 of CITA specifically makes it clear that ALL companies, registered with the CAC must file returns irrespective of tax exemptions conferred on their income. This helps to encourage transparency, and accountability and to keep record of all functioning organizations, operating within the country.
Generally, organizations must file annual returns not earlier than 30th June or later than 31st December every year (except the year the organization was incorporated). However, newly registered organizations begin filing their first annual returns, not later than 18 months after incorporation while older organizations file their annual returns not later than 42 days after their Annual General Meeting.
To file annual returns with the Corporate Affairs Commission, an organization 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 organization or a statement of affairs, in cases where the organization is yet to commence operation along with a fee of #5,000.
Complying with this law will aid the maintenance of good organizational structures as it encourages a culture of record keeping and puts compliant organizations in good standing with the Commission accurate and updated records of said organizations 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 a penalty. Persistent non-compliance to this law could result in eventual de-registration/de-listing of such a company as the commission is left to assume that this organization is non-operational.
Filing annual returns with the Corporate Affairs Commission as and when due helps to keep the organization’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 prevents nonprofits from paying penalties that apply for late filing of annual returns.