Skipping one CAC annual return rarely feels urgent at the time. The consequences build in stages, and each stage is worse than the last.
The bill that starts running from year one
The first consequence is financial, and it starts immediately. A small company's penalty is ₦1,000 for that one late return alone, and the company and each of its directors and officers owe their own separate charge at the same rate on top.
This is not a one-off fine that settles the matter. Our guide to the small company penalty shows how quickly it multiplies once more than one year is involved.
The filings that get blocked while you are behind
The second consequence shows up the next time you try to change anything about the company. CAC has said it will not process post-incorporation filings until up-to-date annual returns and PSC information.
That reaches further than most people expect: a change of directors, a new shareholder, or an address update can all sit blocked behind an old, unfiled return. Our article on rejected change-of-directors filings walks through exactly how that shows up.
The personal exposure your directors pick up
The third consequence lands on people, not just the company. The company and each of its directors and officers are named directly in CAC's notice, and that liability does not obviously end when someone resigns from the board.
Anyone joining a board should check the company's filing history first, for exactly this reason. Our guide to the per-director penalty covers what is actually billed to individuals.
The end of the road: strike-off
Left long enough, legal-advisory guides report 10 consecutive years of missed annual returns as a ground for CAC to strike a company's name off the register entirely.
Strike-off does not appear to cancel the debt already owed. CAC's own notice says it will still pursue directors and officers of struck-off and wound-up companies afterwards, and getting a struck-off company back onto the register is its own separate, uncertain process. Our guide to how many years of default lead to strike-off and guide to restoring a struck-off company cover both sides of this stage.
None of these four stages is reversible by simply waiting longer. Each one adds to what the next stage has to deal with, which is why the cheapest time to act is always the earliest one.
Where to start if you are behind right now
Work out how many returns are actually outstanding before doing anything else, since guessing wastes time and sometimes money. The CAC annual return penalty calculator is a faster way to get a working estimate than doing it by hand.
Once you know the size of the backlog, file the oldest outstanding year first and work forward, rather than jumping to the most recent one. The CAC annual returns hub links every article in this series, and you can start your CAC annual return once you are ready to clear it.