End of Year Business Checklist
The major goal/objective for every business owner is maximizing sales/ revenue, and expansion of the business, however in order to sustain the business, another objective is equally pertinent, which is being in 100 percent compliance with the legal and specific industry rules and regulations of the business. This helps with the free flow of work/business activity in that particular environment and fosters the relationship between the different stakeholders of the organisation. It also gives the business a positive image/outlook as a legally abiding organisation.
Most businesses after registration/incorporation, proceed to carry on their business activities without knowing the compliance measures which are to be taken to sustain the business affairs. Below are the compliance measures to be taken by every business owner:
CAC Compliance Requirements
- Filing of Annual returns: Every business must file its annual returns after 18 months of its incorporation, before the 30th of June annually. Where this is not complied with, there is a penalty to be paid for every year of default, the company status will become inactive, and it could be delisted/struck off from the list of companies registered by CAC.
- PSC UPDATE: Based on the PSC regulations 2022, there is a reporting duty for every company to disclose its persons with significant control (PSC), and such person must be a person who exercises significant control over the company and holds not less than 5% of the shares in the company. Where this is not complied with, there is a daily penalty for the defaulting company and its officers.
- BI-ANNUAL RETURNS FILING: In line with the provisions of section 845(1) of the Companies and Allied Matters Act 2020 and Regulation 32 of the companies regulations 2021, every incorporated trustee is required to file bi-annual statement of Affairs which cover the periods of January 1st to June 30th and July 1st to December 31st of every year. The timelines for filing of the statements are not later than July 15th (for the statement ending 30th) and January 15th (for the statement ending December 31st).
- Tax compliance: This is a business decision to comply with the tax laws of a given country. Every business is required to remit the company income tax (CIT) within 18 months of incorporation and on or before 30th of June of every year and value Added Tax (VAT) monthly before the 14th of every month. The failure to file tax returns and pay taxes could result in heavy fines and eventual closure of the business.
- Financial records: Companies are required to keep financial records, prepare (audited or unaudited) financial reports, present the report to shareholders and debenture holders (where applicable), and file the report at the Corporate Affairs Commission when filing the annual returns.
- Data protection and Privacy: Data controllers and processors must ensure compliance with data protection laws, which is the Nigeria Data protection regulation (NDPR).
- Intellectual property: Companies who have registered trademarks, copyright or patents should be aware of the renewal period of these intellectual property rights, so it can be renewed as at when due and also enlighten its staffs on these rights and cases of infringements.
- Corporate Governance principles: This applies to large companies; they are expected to comply with corporate governance principles laid down by regulatory bodies, such as the Nigerian Code of Corporate Governance. Annual general meetings must be held accordingly, and also properly documented.
- Specific Industry Compliance: This refers to abiding by the regulations and standards set by a particular industry where the business operates. For example, food and cosmetic companies will have to comply with the NAFDAC standard requirements for both imported and made in Nigeria products, SON product registration etc.
It is imperative to know and understand the compliance requirements in which a company operates in, and it is best to make to always make compliance plans alongside the budget/financial goals for every year. This can be done by engaging the services of a lawyer to advise on these compliance measures that are specifically required of your company.
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