CAC threatens sanctions for companies and directors who fail to file annual returns

The Corporate Affairs Commission (CAC) has issued a warning that companies that neglect to submit their annual returns will face sanctions, effective from January 1, 2024. The CAC further specified that the directors of these non-compliant companies, who fail to adhere to the regulations set forth in the Companies and Allied Matters Act of 2020, will also be subject to penalties.

The circular, released by the commission, outlined the motivation behind this reminder and potential enforcement, citing widespread non-compliance among companies despite the existence of stricter penalties as per the Companies Regulations of 2021.

As of January 1, 2024, the CAC will fully enforce the penalties stipulated by the Companies Regulations of 2021 for non-compliance with annual return filings. This means that the penalties applicable to both companies and their directors or officers for failing to submit annual returns will be enforced by the commission.

To avoid such penalties, companies, directors, and officers who have not been complying with annual return requirements are encouraged to take action during the window period between the date of this announcement and January 1, 2024. They should promptly file their annual returns with the CAC to ensure they meet the necessary legal obligations.

Additionally, it was emphasized that moving forward, the CAC will take action against directors and officers of struck-off and wound-up companies for the recovery of unpaid penalties they may owe. This move aims to reinforce compliance with the regulations governing the submission of annual returns and maintain the integrity of corporate governance in Nigeria.