Do you know that another business can still legally use your business name even after you may have registered your business with the Corporate Affairs Commission (CAC)? E shock you?
Even after registering your business with the CAC, your registered business name can be deactivated. You can lose your business name.
When you don’t file annual returns, CAC assumes that your business is not active any longer and will delist it from their register. What this means is that another business can use your business name legally.
I am sure you are not aware of this. Well, “I don’t know” is not an excuse.
There are so many businesses in Nigeria that though registered, have become inactive on the CAC portal.
Getting your CAC certificate is not the end of the process. Before you get too excited, remember that you have to continue filing annual returns to CAC, or else you risk losing your business name.
If your business name is inactive, it means that you are owing CAC. Your debt is accumulating every year. The CAC agent who registered your business for you may never tell you this.
To know whether or not your business is active, visit the CAC website (www.cac.gov.ng) and type in your business name. Select “business” and click “Search.”
Annual return is a legal, COMPULSORY payment made to CAC every year to keep your business name in their register and to also notify them of how your business is doing.
It is NOT a Nigerian thing. That is how it is done all over the world.
If you don’t file your annual returns, not only will CAC deactivate your business name, you will be fined a ₦5,000 for every year you missed, plus the applicable filing fee you were meant to pay.
Once your business name is inactive on the CAC portal, you cannot get any government or company contract.
For those planning to japa, when you present your CAC certificate at the embassy, your visa application will be rejected. You cannot apply for a loan with an inactive business name.
You cannot get a tax clearance certificate if you do not file annual returns. You cannot upgrade from a business name to LLC or make any changes to your business if you do not file annual returns.
If you refuse to file annual returns for a long time, your business name will be delisted totally.
After making your payment, you will get a Remita receipt of payment, Acknowledgement slip from CAC, and Evidence of reactivation.
It takes between 3 – 7 days for your status to change from inactive to active.
Please note;
- You do not file annual returns for the year you registered your business.
- Filing annual returns is NOT a tax. It simply means updating your records with the CAC and stating your operational status in terms of net asset and annual turnover.
- Even if you have not made a profit in your business since you got your CAC certificate. Whether or not your business is currently in operation, you have to file annual returns.
© Kingsley Ndimele
Your Reliable Consultant