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But what does it mean for your business to be active or inactive on the CAC portal? What consequences may follow if it’s the latter? And how can you keep it ‘active’? We’ll answer these questions in this article. But first, let’s walk you through the ‘ACTIVE’ and ‘INACTIVE’ tags, and what they imply.
What Does it Mean to Be Active or Inactive on the CAC Portal?If the CAC lists your business as ‘active’, it recognizes it as operational. In practical terms, this means that your enterprise has filed all its annual returns to date with the CAC. Conversely, your business will be listed as ‘inactive’ if it has not filed its annual returns for at least one business year with the commission. In that case, the commission views it as not being operational and may treat it as such.
What are Annual Returns?An annual return is a record detailing a company’s name, activity, management composition, share capital, and other crucial information, updated for the period it is concerned about. Note that it is not a financial statement, but a document that provides a snapshot of a business’s current state. The law mandates commercial entities registered with the CAC as ‘business names’ (i.e. sole proprietorships and partnerships), to file their annual returns on or before June 30 every year.
How to Know Whether Your Business is Active or Inactive on the CAC PortalVisit the CAC’s online search page (https://search.cac.gov.ng/home). Type your business’s name into the search box, and click the ‘search’ button. If your business is registered with the commission, the search result will indicate its status as either ‘active’ or ‘inactive’.
What Happens if Your Business is Inactive?If you do not file annual returns, you could suffer these consequences:
- Your business will incur a penalty fee for each year in which returns were not filed. This is in addition to the annual filing fee.
- You will also not be able to update information concerning your business until you file outstanding returns.
- Potential partners and clients could be discouraged from engaging you further if they discover that the CAC lists your firm as inactive; such a listing suggests that your business is currently not operational.
- Enterprises and companies which fail to file returns for an extended period (several years) may even be treated as defunct and delisted from the CAC’s database.
How to Remain Active with the CACThere’s only one way to retain an ‘active’ status with the CAC: filing annual returns before the deadline for doing so. You can do this by taking the following steps:
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- Complete and sign the Annual Returns Form (obtainable from the CAC website)
- Pay the filing fees on the CAC’s Company Registration Portal, and collect a receipt as evidence that you have paid
- Submit copies of the form and receipt to the CAC
- Receive an acknowledgement from the CAC after it has processed your submission
How to Reactivate Your Business with the CACIf your business’s status reads ‘inactive’, you can do the following things to get it back to ‘active’ on the CAC portal:
- Obtain and fill out the annual return forms for each year in which returns were not filed. You can download this form from the CAC website. The forms should be signed by the proprietor of the business (if it’s registered as a ‘business name’) or a director (or secretary) if it’s registered as a company.
- If your enterprise is registered as a business name, get an accountant (either yours or an accounting firm) to prepare a ‘statement of affairs for each year in which you did not file an annual return. A statement of affairs details your business’s assets and liabilities. Ensure that this document is filed with the CAC.
- Pay outstanding debt for each of the years in which you defaulted. You can do this on the CAC’S Company Registration Portal.
- Submit copies of the receipts for the payments you have made, along with your statement(s) of affairs, to the CAC
- Ask the CAC, via email, to change your business status from ‘inactive’ to ‘active’. You can email your feedback concerning your business’s status to email@example.com. They should effect the change within 24 hours of your request being made.
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Final WordsAs we’ve explained in this article, it’s important that you maintain the status of your business as ‘active’ on the CAC portal. Do this by filing your annual returns on time. But if your business’s listing on the portal currently reads ‘inactive’, you can take the steps we’ve discussed here to get it back to ‘active’. Furthermore, in addition to keeping your business active on CAC, you can increase your business awareness and ensure that your content reaches the greatest number of targeted people possible by joining Connect Nigeria’s Club Connect. Featured Image Source: Blopreneur NG
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