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CAC annual returns for dormant company

One of the most persistent myths among Nigerian business owners is that a company with no trading activity — no revenue, no transactions, effectively dormant — doesn’t need to bother with CAC annual returns. It’s a costly misconception, and it’s one of the main reasons dormant companies quietly accumulate years of penalties without anyone noticing until CAC sends a notice.

Dormant Doesn’t Mean Exempt

Under CAMA 2020, every registered company — active or dormant — must file annual returns with the Corporate Affairs Commission for as long as it remains on the register. The obligation isn’t tied to whether the company made money, traded, or did anything at all during the year. It’s tied purely to the fact that the company legally exists and is registered.

The logic behind this is simple: annual returns aren’t a tax on profit or turnover. They’re a confirmation to CAC that the company still exists, that its registered details (directors, address, share structure) are accurate, and that it should remain on the register. A dormant company still meets all three conditions — it exists, it has details on file, and it’s on the register — so it still owes the filing.

What a Dormant Company Files

Instead of full audited financial statements, a dormant company typically files a Statement of Affairs — a simpler declaration confirming there has been no significant financial activity during the reporting period. This is generally accepted in place of full accounts precisely because the company had nothing substantial to report.

Beyond that, the filing still needs:

• Confirmation of current directors and shareholders
• Confirmation of the registered office address
• Confirmation of share capital structure
• Payment of the standard annual returns filing fee

The Cost Is the Same

There’s no discount for dormancy. A dormant company pays the same base filing fee as an active one — roughly ₦5,000–₦10,000 per year — and is subject to exactly the same late filing penalties if it misses the deadline. “We’re not doing anything with the company” is not a defense CAC recognizes when penalties are applied.

Why This Trips People Up

Dormant companies are often set up and then forgotten — a founder incorporates in anticipation of a project that never launches, or a company stops trading after a pivot but nobody formally winds it up. Because there’s no day-to-day activity to remind the owner that the company exists, annual returns are the one recurring obligation that keeps running in the background, quietly accumulating penalties year after year until someone tries to use the company again (for a bank account, a contract, or a new venture) and discovers it’s been flagged as inactive or is deep in arrears.

If You Don’t Plan to Use the Company Anymore

If a company genuinely has no future — you don’t intend to trade under it again — the correct move is to formally apply to CAC to have it struck off or wound up. This closes the obligation properly instead of letting penalties accumulate indefinitely on a company that technically still exists on paper.

Bottom line: a dormant company owes annual returns exactly like an active one — same fee, same deadline, same penalties for lateness. The only way to legitimately stop the obligation is to formally close the company, not simply stop paying attention to it.