The sections, word for word
Every section on this subject, exactly as printed in the Official Gazette (Act No. 3 of 2020). The explanation follows beneath.
Section 417. Annual return by company limited by shares or guarantee
Every company shall, once at least in every year, make and deliver to the Commission an annual return in the form, and containing the matters specified in sections 418, 419 or 420 as may be applicable : Provided that a company need not make a return under this section either in the year of its incorporation or, if it is not required by section 237 to hold an annual general meeting during the following year, in that year.
Section 418. Annual return by company having shares other than small company
(1) The annual return by a company having shares other than a small company shall contain with respect to the registered office of the company, registers of members and debenture holders, shares and debentures, indebtedness, past and present members, directors and secretary, the matters specified in Part I of the Seventh Schedule to this Act, and the return shall be in the form set out in Part II of that Schedule or as near to it as circumstances admit.
(2) Where the company has converted any of its shares into stock and given notice of the conversion to the Commission, the list referred to in paragraph 5 of Part I of the Seventh Schedule to this Act shall state the amount of stock held by each of the existing members instead of the number of shares and the particulars relating to shares required by that paragraph.
(3) The return may, in any year, if the return for either of the two immediately preceding years has given, as at the date of that return, the full particulars required by the paragraph 5 of the Seventh Schedule to this Act, give only such particulars required by that paragraph as relate to persons ceasing to be or becoming members since the date of the last return and to shares transferred since that date in the amount of stock held by a member.
Section 419. Annual return by small company
The annual return by a small company shall contain the matters specified in Part I of the Eighth Schedule to this Act and the return shall be in the form set out in Part II of that Schedule or as near to it as circumstances admit.
Section 420. Annual return by company limited by guarantee
(1) The annual return by a company limited by guarantee shall be in the form prescribed in the Ninth Schedule or as near to it as circumstances admit.
(2) There shall be annexed to the return a statement containing particulars of the total amount of the indebtedness of the company in respect of all mortgages and charges which are required to be registered with the Commission under this Act.
Section 421. Time for completion and delivery of annual return
(1) The annual return shall be completed, signed by a director and the secretary, and delivered to the Commission not later than 42 days after the annual general meeting for the year, whether or not that meeting is the first or only general meeting of the company in that year, but the company may apply to the Commission for extension of time within which to file its annual return for any given calendar year.
(2) This section does not apply to companies with only one member.
Section 422. Documents to be annexed to annual return
(1) Subject to the provisions of section 424 of this Act, there shall be annexed to the annual return—
(a) a written copy, certified both by a director and the Secretary of the company to be a true copy, of every balance sheet and profit and loss account laid before the company in general meeting held in the year to which the return relates (including every document required by law to be annexed to the balance sheet) ; and
(b) a copy, certified in accordance with paragraph (a), of the report of the auditors on, and of the report of the directors accompanying, each such balance sheet.
(2) If any such balance sheet as mentioned in subsection (1), or document required by law to be annexed does not comply with the requirement of the law in force at the date of the audit with respect to the form of balance sheet or the documents, there shall be made such additions to and corrections in the copy as would have been required to be made in the balance sheet or document in order to comply with the requirements, and the fact that the copy has been amended shall be stated on it.
(3) Any document required to be annexed to the annual return may be delivered to the Commission either in hard copy or through electronic communications.
Section 423. Certificate by private company and small company in annual return
(1) A private company shall send with the annual return required by sections 418, 419 or 420 of this Act a certificate signed both by a director and the secretary of the company that the company has not, since the date of the last return, or, in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for shares or debentures of the company, and, where the annual return discloses the fact that the number of members of the company exceeds 50, also a certificate so signed that the excess consists wholly of persons who under section 22 (3) of this Act are not included in reckoning the number of 50.
(2) A small company shall in addition to the certificate required under subsection (1), send with the annual return a certificate signed by a director and the secretary that—
(a) it is a private company limited by shares ;
(b) the amount of its turn-over for that year is not more than N120,000,000 or such amount as may be fixed by the Commission ;
(c) its net assets value is not more than N60,000,000 or such amount as may be fixed by the Commission ;
(d) none of its members is an alien ;
(e) none of its members is a government, a government agent or nominee ; and (f ) the directors among them hold at least 51% of the equity share capital of the company.
Section 424. Exception in certain cases of unlimited companies and small companies from requirements of section 422
(1) An unlimited company shall be exempted from the requirements of section 422 of this Act as to documents to be annexed to the annual return if,—
(a) at no time during the period to which the return relates has it been, to its knowledge, the subsidiary of a company that was then limited and at no such time, to its knowledge, have there been held or exercisable by or on behalf of two or more companies that were limited, shares or powers which, had they been held or exercisable by one of them, would have made the company its subsidiary ; and
(b) at no such time has it been the holding company of a company that was then limited.
(2) A small company is exempted from the requirements imposed by section 422 provided that it complies with the provision of section 394 of this Act.
Section 425. Penalty for non-compliance with sections 417 to 423
(1) If a company required to comply with any of the provisions of sections 417-423 fails to do so, the company and every director or officer of the company are liable to a penalty as may be prescribed by the Commission.
(2) For the purposes of subsection (1), “officer” includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act.
(3) Failure to file annual returns for a consecutive period of 10 years is a ground for striking the name of a company off the companies’ register.
What this means
Short answer
The annual return must be completed, signed by a director and the secretary, and delivered to the Commission not later than 42 days after the annual general meeting for the year (section 421(1)). If a company does not comply, the company and every director or officer is liable to a penalty set by the Commission (section 425(1)). Failing to file for 10 consecutive years is a ground for striking the company off the register (section 425(3)).
When the annual return is due
Under section 417, every company must make and deliver an annual return to the Commission at least once a year. A company need not file in the year of its incorporation, or in the following year if it is not required to hold an annual general meeting in that year. Section 421(1) sets the deadline: not later than 42 days after the annual general meeting for the year, whether or not that meeting is the first or only general meeting that year. A company can apply to the Commission for more time. Section 421 does not apply to a company with only one member (section 421(2)).
What the return contains
| Company | Content and form | Section |
|---|---|---|
| Company with shares, not small | Registered office, registers of members and debenture holders, shares and debentures, indebtedness, past and present members, directors and secretary, as set out in the Seventh Schedule | 418 |
| Small company | The matters in the Eighth Schedule, in its prescribed form | 419 |
| Company limited by guarantee | The form in the Ninth Schedule, with a statement of total indebtedness on registrable mortgages and charges | 420 |
What must be attached
Section 422 requires a certified true copy, signed by a director and the secretary, of every balance sheet and profit and loss account laid before the company in general meeting during the year, with the documents annexed to the balance sheet, and the auditors’ report and directors’ report. They can be delivered in hard copy or electronically. An unlimited company that meets the conditions in section 424(1), and a small company that complies with section 394, are exempt from this requirement (section 424).
A private company must send a certificate, signed by a director and the secretary, that it has not invited the public to subscribe for shares or debentures since its last return. If its return shows more than 50 members, the certificate must also say that the excess consists wholly of people not counted under section 22(3). A small company adds a certificate that it meets the small-company conditions (section 423).
Accounts laid at the meeting
The directors must lay the financial statements before the company in general meeting not later than 18 months after incorporation and at least once every year after that. The statements must be made up to a date no more than nine months before the meeting, and copies of the balance sheet, profit and loss account and notes are delivered with the annual return (section 388). Copies must reach members at least 21 days before the meeting (section 387).
Penalties for filing late or not at all
- If a company required to comply with sections 417 to 423 fails to do so, the company and every director or officer are liable to a penalty set by the Commission. For this purpose, officer includes a person whose directions the directors are accustomed to act on (section 425(1) and (2)).
- Failure to file annual returns for a consecutive period of 10 years is a ground for striking the company’s name off the register (section 425(3)).
- If the directors do not lay or deliver the financial statements on time, each person who was a director just before the period ended is liable to a penalty set by the Commission (section 389(1)). A member, creditor or the Commission can ask the court to order the directors to make good the default if they fail to do so within 14 days of notice (section 390).
The penalty amounts are not in the Act. They are set in the Commission’s regulations, so check the current schedule before you compute a figure: [current penalty schedule].
Questions and answers
When are annual returns due?
Not later than 42 days after the annual general meeting for the year, with a possible extension by application to the Commission (section 421(1)).
What is the penalty for not filing an annual return?
The company and every director or officer are liable to a penalty set by the Commission in its regulations (section 425(1)). The Act itself does not state the amount.
Does a new company file an annual return in its first year?
No. A company need not file in the year of incorporation, or in the next year if it is not required to hold an annual general meeting in that year (section 417).
What happens if a company never files?
Failing to file annual returns for 10 consecutive years is a ground for striking the company off the register (section 425(3)).
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