Compliance Requirements for Incorporated Trustees: Annual Returns Incorporated Trustees are Expected to File in Nigeria

Incorporated Trustees Annual Returns Requirements

Like registered Business Names and Incorporated Companies, Incorporated Trustees in Nigeria are required to file their Annual Returns with the Corporate Affairs Commission. In Nigeria, for Incorporated Trustees, they are required to make two filings per annum:

1. Annual Returns
2. Bi-Annual Statement of Affairs

Filing for both the aforementioned involves the trustees submitting updated information about the Entity’s financial status, trustees, governing council and principals officers, its activities, and overall governance structure. In Nigeria, the Corporate Affairs Commission [“the Commission”] requires these information to be filed within specific periods to keep the Commission abreast of the Entity’s activities, alongside the general public and failure to file as and when due attracts penalties to the Incorporated Trustees in default of these two filings.

Legal Requirements for Incorporated Trustees on Filing Annual Returns

Unlike companies and Business Names which are required to file only Annual Returns every year of their existence, the requirement for Incorporated Trustees in Nigeria is slightly different. Simply put, the Companies and Allied Matters Act requires Incorporated Trustees to file two sets of Returns every year:

1. Annual Returns
2. Bi-Annual Statement of Affairs

The Annual Returns filing is done once per year, but for the Bi-Annual Statement of Affairs, like the name suggests, it is filed bi-annually, the first one covering the months of January to June filed not later than the end of June in each year and the second one for the months of July to December filed not later than December in each year.

Significance of Legal Compliance for Incorporated Trustees

It is a regulatory requirement for Incorporated Trustees to file their annual returns and bi-annual statement of affairs with the Corporate Affairs Commission. Furthermore, failure to file their annual returns and bi-annual statement of affairs as and when due attracts monetary penalties for the trustees of the Association in default for each day of default, and they have to pay whatever penalties the Corporate Affairs Commission stipulates as late payment. Thus, to avoid these penalties, it is of vital importance for Incorporated Trustees to file their Annual Returns and Statement of Affairs when due.

What to File: Mandatory Documentation and Details Incorporated Trustees are expected to provide for filing

To file Annual Returns:

When filing Annual Returns, trustees of Incorporated Trustees are expected to provide the following documents:

1. Audited Accounts of the Association for the year in which the Returns is made

Required Information needed to file Annual Returns and Bi-Annual Statement of Affairs

For Bi-Annual Statement of Affairs:

1. Name of Association and Classification
2. Details of Registered Office
3. Details of period you are filing the Bi-Annual Statement of Affairs for
4. Details of Subscription/Contributions
5. Details of Donations/Grants to the Association
6. Description and Value of Income generated
7. Details of liabilities of the Association for the period, which includes: Judgment, contracts, estimated liabilities and value of liabilities
8. Assets of the Association which includes: value of cash at the Bank, value of cash at hand, other assets and description of those assets

The filing for the Bin-Annual Statement of Affairs must be authorized by a secretary, trustee or any authorized person of the Association.

For Annual Returns

Incorporated Trustees are required to file their Returns not earlier than the 30^th of June or later than the 31^st of December in each year, with the Corporate Affairs Commission. Their Returns must contain the following information:

1. Name of Association and Classification
2. Details of Registered Office
3. Details of all the Trustees of the Association, including: their names, dates of birth, gender, nationality, phone numbers, emails, occupation, service address, residential address, means of identification
4. Details of members of the Governing Council (Executives) of the Association, including: their names, dates of birth, gender, nationality, phone numbers, emails, occupation, service address, residential address, means of identification
5. Year of Return
6. Details of Financial Year start and Year end
7. Gross Assets of the Association [in Naira]
8. Net Asset of the Association [in Naira]
9. Bankers
10. Balances as at financial year end
11. Sources of income in the year
12. Details of Trustees benefits during the year

Statutory Deadlines for filing

Incorporated Trustees are required to file their Annual Returns for each year of existence between the 30^th of June and the 31^st of December in each year. Filing after this statutory period for any preceding year attracts penalties for late filing on the trustees of the association.

Incorporated Trustees are also required to file a bi-annual statement of affairs made up to the 30^th of June and 31^st December in each year, not to be filed later than the 15^th of July and the 15^th of January. Filing later than these dates attracts daily monetary penalties against the trustees for every day of default.

Step-by-step filing process

1.     File all necessary documentation and get needed documents ready (depending on whether you are filing annual returns or bi-annual statement of affairs)

2.     Fill all details required to be filled

3.     Submit all necessary documentation and pay the Commission’s fees at the CRP.

4.     Get your receipt of acknowledgment of payment (from Remita)

5.     Obtain confirmation when the returns filed is accepted for filing by the Corporate Affairs Commission

How to be compliant: Outsourcing Legal Compliance

Filing annual returns and bi-annual statements of affairs by Incorporated Trustees is a post-incorporation matter done at post-incorporation stage at the CAC portal. Only accredited individuals [lawyers, chartered accountants, chartered secretaries] and accredited Firms [law firms, accounting firms] perform duties on the post-incorporation portal. Given the situation, it is advisable to keep a law firm or other accredited professionals on retainer to file the three returns Incorporated Trustees are expected to file with the Corporate Affairs Commission annually. We are accredited agents at Kabbiz Legal & Advisory and can help your Association with its compliance requirements to file all the returns and Statements required to be filed at the Corporate Affairs Commission.

Reasons Why Incorporated Trustees Should file their Annual Returns and Bi-Annual Statement of Affairs with the CAC

1. Payment of Penalties: When Incorporated Trustees fail to file Annual Returns and file their Bi-Annual Statement of Affairs, the trustees of the Association pay daily penalties for their default to file same. What makes theirs different is that Incorporated Trustees are required to make three annual filings to the Corporate Affairs Commission annually, so the penalties can really pile up when they default.
2. Having an Active Status on CAC records: When Incorporated Trustees file their expected returns annually, the status of such an Association will be marked as “Active” on the Corporate Affairs Commission portal. This shows the public that the Association is a going concern and still active. Not filing will leave the status of the Association as “Inactive”.
3. Striking off name from Register: Like companies and Business Names, where an Association registered as Incorporated Trustees fail to file their expected Annual Returns and Statement of Affairs for a consecutive period of ten years, the Corporate Affairs Commission can strike out the name of such Association from the Register.

Are you a Trustee and Wishes to file your Association’s Annual Returns and Bi-Annual Statement of Affairs with the Corporate Affairs Commission?

Compliance obligations for Incorporated Trustees in Nigeria are even more complex than that for registered Companies and Business Names, making compliance an issue for many. At Kabbiz Legal & Advisory, we will be happy to guide you on compliance requirements to ensure that your Association is duly updated with filing all its expected returns at the Corporate Affairs Commission.

This article is provided for information purposes only and does not constitute legal advice. For more information, or to seek more information and advice on the contents of this article, we invite you to reach out to us and we will be delighted to provide additional details and guidance. For further enquiries, kindly send an email to kingsley.ani@kabbizlegal.com or call us on +2348064231176, or alternatively click the link here to chat us on WhatsApp.