CAMA 2020 COMPLIANCE HEALTH CHECK BURNDOWN
Introduction
The Companies and Allied Matters Act (CAMA) 2020, which repealed the 1990 Act, introduced sweeping changes to Nigeria’s business environment . With the Corporate Affairs Commission (CAC) intensifying its crackdown on inactive businesses, compliance is no longer optional—it is essential for survival. The CAC periodically compiles and publishes names of companies to be delisted, and once a company is struck off, it ceases to exist as a legal entity .
Many entrepreneurs only discover their companies have been struck off when applying for loans, seeking investment, or bidding for contracts . This guide provides a comprehensive compliance health check burndown—a systematic approach to identifying, tracking, and resolving all outstanding CAMA 2020 compliance obligations.
The Pain Points: Why Compliance Health Checks Matter
The Delisting Risk
The Corporate Affairs Commission has intensified its crackdown on inactive Nigerian businesses, striking them off its register in a process known as “striking off” . Once delisted, a company loses its legal status and is considered non-existent in law. Failure to file annual returns for ten years in a row is a primary indicator for delisting .
The “Inactive” Status Trap
A company that fails to file its annual returns is deemed inactive in the CAC’s records . This can preclude the company from obtaining essential certificates of good standing, which are required for business transactions, loan applications, and government contracts . As one source notes, “the only effective means of demonstrating to the Corporate Affairs Commission that your business is indeed in operation is to ensure the timely filing of annual returns” .
The Post-Incorporation Services Lockout
Companies that have neglected their annual return filings may find themselves locked out of post-incorporation services provided by the CAC, including obtaining Certified True Copies of incorporation documents, modifying share capital, making changes to directors, and altering registered addresses . Should you have unaddressed annual return filings, you might be required to rectify these first, potentially causing delays in your operational plans .
The Bid and Contract Barrier
Proof of CAC annual returns is a pivotal requirement for qualifying for contract bidding, a requirement set by some private and public entities. Without this evidence, your company might not be considered eligible for lucrative bidding opportunities . This is increasingly important as the majority of contractual bids in public or private sectors typically require filing an up-to-date yearly report as a major pre-requisite .
Director Liability
Directors owe fiduciary duties to the company, and failure to comply with statutory requirements can trigger severe consequences. When directors fail to exercise their duties, the consequences may range from regulatory sanctions and civil liability to criminal prosecution . A director convicted of certain offences may be disqualified from holding office as a director in any company for a period of ten years .
CAMA 2020 Key Compliance Obligations
1. Minimum Share Capital
Pursuant to Section 124 of CAMA 2020, private companies must have a minimum share capital of ₦100,000 . For companies with foreign participation, the minimum authorized share capital is ₦100,000,000 (One Hundred Million Naira) . This functions as an accounting structural benchmark; the capital does not need to be physically locked in a local bank prior to incorporation .
2. Directors and Shareholders
A minimum of two directors—or one in the case of small companies—and at least one shareholder are required . Directors must be at least 18 years old and of sound mind, as provided in Sections 20 and 271 of CAMA 2020 . Under Section 275, public companies are to appoint a minimum of three independent directors .
3. Audit Committee
CAMA 2020 mandates that all Public Limited Liability Companies (PLCs) constitute an audit committee comprising five members—three shareholders and two non-executive directors . At least one member must be a professional accountant, ensuring the committee has the technical competence to interpret financial data . The absence of an audit committee can create serious loopholes in an organisation’s financial reporting and internal control mechanisms .
4. Notification by Persons with Significant Control (PSC)
A person with significant control (PSC), i.e., with 5% interest or more, is required to notify the company of its status within 7 days of becoming aware, and the company must in turn notify CAC within one month of receiving the PSC notice .
5. Register of Directors’ Residential Addresses
Every company is required to keep a register of directors’ residential addresses .
6. Disclosure of Remuneration of Managers
Disclosure of remuneration of managers is part of the ordinary business of the Annual General Meeting (AGM) .
7. Certification of Financial Statements
The CEO or CFO must certify that the officer who signed the financial statements meets statutory requirements .
The Annual Returns Compliance Breakdown
Filing Deadlines
| Entity Type | Filing Deadline |
|---|---|
| New Companies | 18 months after incorporation, then annually thereafter |
| Existing Companies | Within 42 days after the Annual General Meeting (AGM) |
| Business Names | 30th day of June each year, except the calendar year in which the business name is registered |
What an Annual Return Must Include
As stipulated in Section 417 of CAMA 2020, the return must include :
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The company’s registered office and principal business activities
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The type of company (e.g., private, public, limited by guarantee)
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A list of its directors and secretary, with their details
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Details of shareholders, their shareholdings, and any transfers of shares
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Information on the company’s issued share capital and debentures
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A copy of the company’s audited financial statements (for companies required to audit their accounts)
Forms for Filing
| Form | Purpose |
|---|---|
| Form CAC 10 | Annual Return for a small company |
| Form CAC 10A | Annual Return for a company having shares other than a small company |
| Form CAC 10B | Annual Return for a company limited by guarantee |
| Form CAC 10C | Annual Return of exempted foreign companies |
| CAC/IT 4 | Annual Return for Incorporated Trustee |
| CAC/BN/7 | Annual Return for Business Name |
Penalties for Non-Compliance
| Offence | Penalty |
|---|---|
| Failure to file annual returns | Daily default fines for the company and every officer in default |
| Company deemed inactive | Cannot obtain certificates of good standing; locked out of post-incorporation services |
| Persistent failure to file (10 years) | Company struck off the register and ceases to exist |
| Director breach of duty | Civil liability, criminal prosecution, disqualification for up to 10 years |
The Compliance Health Check Burndown Process
Step 1: Conduct a Compliance Assessment
The first step is a thorough assessment of your current compliance status. This involves reviewing:
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All CAC filings, including annual returns
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Director and shareholder records
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Share capital and allotment records
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Audit committee composition
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PSC notifications
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Financial statement certifications
Step 2: Identify Outstanding Obligations
Identify all gaps and risks before they become problems . This includes:
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Unfiled annual returns
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Late filing penalties that need to be paid
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Changes in directors or shareholders not yet filed
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Unpaid registration or filing fees
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Incomplete PSC notifications
Step 3: Prioritize by Urgency and Impact
Prioritize outstanding obligations based on:
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Urgency: How soon the deadline is approaching
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Impact: Whether failure to comply could result in delisting or loss of services
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Cost: The financial penalty for continued non-compliance
Step 4: Resolve Outstanding Issues
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File all outstanding annual returns
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Pay all applicable penalties and fees
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Update director and shareholder information
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Complete PSC notifications
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Reconcile share capital and allotment records
Step 5: Establish a Forward Compliance Calendar
Once current obligations are resolved, establish a forward compliance calendar to ensure future compliance:
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Set reminders for annual return deadlines
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Schedule periodic compliance health checks
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Monitor regulatory changes and update compliance procedures
Step 6: Monitor and Review
Compliance is not a one-time exercise. The CAC periodically updates its requirements, and the regulatory landscape continues to evolve . Conduct periodic compliance health checks to ensure continued good standing.
How Qeeva Advisory Helps with CAMA 2020 Compliance
At Qeeva Advisory, we understand that navigating CAMA 2020 compliance can be complex. Our team of experienced professionals helps Nigerian businesses maintain good standing with the Corporate Affairs Commission.
Our Core Services
Advisory Services Nigeria – Our advisory professionals help you understand your CAMA 2020 obligations, conduct compliance health checks, and develop strategies for maintaining compliance.
Regulatory Compliance – We ensure your business meets all regulatory requirements under CAMA 2020, including annual returns, director appointments, and audit committee composition.
Bookkeeping Services – Accurate records are essential for compliance. Our bookkeeping services ensure your financial records are accurate and complete.
Company Secretarial Services – We provide expert support for corporate governance, board meetings, statutory filings, and regulatory compliance.
Frequently Asked Questions
Q: What is the deadline for filing annual returns?
A: New companies must file within 18 months of incorporation, then annually thereafter. Existing companies must file within 42 days after the Annual General Meeting (AGM) .
Q: What are the penalties for late filing of annual returns?
A: Section 425 of CAMA 2020 prescribes daily default fines for both the company and every officer in default for the period the return remains unfiled .
Q: How long can a company fail to file returns before being delisted?
A: A company that has consistently neglected to file its annual returns for ten (10) years is eligible to be struck off and delisted as a registered company .
Q: What is the minimum share capital for a private company?
A: Private companies must have a minimum of ₦100,000 share capital .
Q: How many independent directors must a public company have?
A: Under Section 275, public companies are to appoint a minimum of three independent directors .
Q: What is the composition of the audit committee under CAMA 2020?
A: The audit committee comprises five members—three shareholders and two non-executive directors, with at least one member being a professional accountant .
Q: Can a director be held personally liable for compliance failures?
A: Yes. Directors can face civil liability, criminal prosecution, and disqualification for breach of their fiduciary duties .
The Bottom Line
CAMA 2020 compliance is essential for business survival in Nigeria. The CAC’s intensified crackdown on inactive businesses means that failure to file annual returns and meet other statutory obligations can result in delisting, loss of legal status, and inability to access post-incorporation services or bid for contracts.
Key Takeaways:
Understand Your Obligations: Familiarize yourself with key CAMA 2020 requirements, including annual returns, minimum share capital, director appointments, and audit committee composition.
Conduct Regular Health Checks: Don’t wait for a compliance crisis. Conduct periodic compliance health checks to identify and resolve issues before they become problems .
File Annual Returns on Time: The deadline for existing companies is 42 days after the AGM. Late filing attracts daily default fines and can lead to delisting .
Maintain Proper Records: Keep accurate records of directors, shareholders, and share capital. Update the CAC promptly on any changes.
Seek Professional Guidance: Compliance is complex. Work with professionals who understand CAMA 2020 and can help you maintain good standing.
Your job is to be prepared. Understand your CAMA 2020 obligations. Conduct regular compliance health checks. File returns on time. Seek professional guidance.
With the right approach and the right partner, you can turn CAMA 2020 compliance from a burden into a foundation for sustainable growth.
Suggested Reading from Our Blog
Regulatory Compliance In Nigeria – Comprehensive overview of tax and regulatory compliance requirements for Nigerian businesses.
Business Registration & Compliance in Nigeria – Complete guide to business registration and compliance, including CAC registration and TIN requirements.
Why Every Business Needs A Strong Company Secretary – Understand the critical role of the Company Secretary in ensuring compliance and corporate governance.
Board Governance Essentials – Complete guide to board governance in Nigeria, covering board composition, duties, committees, and evaluation.
Reference Links / Sources
Mondaq – The 2026 Foreign Direct Investor’s Legal Guide to Nigeria – Minimum share capital requirements (₦100m for foreign-owned companies), annual return deadlines (June 30), and directors’ duties under CAMA 2020
Matog Consulting – Corporate Compliance and Annual Returns Filing – Directors’ fiduciary duties, compliance health checks, and ongoing compliance monitoring
Mondaq – All You Need to Know About Filing Annual Returns – Section 822 annual return requirement, forms, and importance of filing for post-incorporation services
Vanguard – Six steps to keep business legally active – Practical steps for CAC compliance, delisting risk, and post-registration requirements
PwC – Key compliance obligations under CAMA 2020 – PSC notification requirements, minimum share capital, independent directors, and annual return filing
LinkedIn – Filing Annual Returns Mandatory Under CAMA 2020 – Section 417 requirements, Section 421 penalties, delisting under Section 692, and 10-year delisting trigger
Mondaq – Duties and Responsibilities of Directors Under Nigerian Law – Fiduciary duties, care and diligence, conflict of interest, and consequences of breach
BusinessDay – Audit Committee Oversight – Section 404 audit committee requirements, financial literacy requirement, and consequences of non-compliance
Mondaq – Implications of Non-compliance with Annual Returns – Consequences of non-compliance, delisting process, and restoration application
Tribune – How to keep your company from being delisted – CAC striking off process, minimum share capital, and director requirements
Let’s Talk About Your CAMA 2020 Compliance Needs
Navigating CAMA 2020 compliance can be complex. At Qeeva Advisory, we understand the challenges faced by Nigerian businesses in maintaining good standing with the Corporate Affairs Commission.
Whether you need help with annual returns, compliance health checks, or governance support, we are here to support you.
📞 Call us: (+234) 802 320 0801, (+234) 807 576 5799
📧 Email: info@qeeva.com
📍 Visit us: 5, Ishola Bello Close, Off Iyalla Street, Alausa, Ikeja, Lagos, Nigeria
Contact us today to schedule a consultation. Let us help you navigate CAMA 2020 compliance with confidence.
Your journey to compliance starts with a conversation. Let’s talk.
