Annual Returns is a record containing information about a Company, it is a summary of the most relevant information pertaining to a company. An annual return is not a financial document, it’s a record of publicly available information about your company that appears on the Companies Register. That information, which includes your address and details of directors and shareholders, must be updated each year through an annual return.
According to Section 165(1) of the Company Act, every company shall make and file with the Registrar of Companies an annual return consisting of a summary in the form contained in the Forth Schedule (“Form of annual returns of company”) or as near thereto as circumstances admit.
When to file Annual Returns
Annual Returns should be filed on an annual basis (12months). For example, if your company was incorporated on 6th January 2020, the annual return must be filed up on the 6th January 2021.
Reasons for filing Annual Returns
- Filing annual returns with the Registrar of Companies, confirms whether a company is still in business or trading, or if it will be in business in the near future. An annual return is a statutory return in terms of the Companies Act.
- When a company fails to submit its annual returns for a long time, the Registrar of Companies will assume the company is no longer trading and may start the deregistration of the company.
- In the case that your company documents are lost, it will be easy for you to recover those company documents because the annual return provides the Companies Registry with up-
to-date information on a company’s registered office address, the address at which the register of members is kept, the number of shares in the company, the number of issued shares, directors and secretary(s) in office and auditors.
- It will be easy for to amend information on your company documents like change of directors, shareholding structure, etc.
- Avoiding late annual returns filing submission penalties.
Consequences of not filing Returns
- Failure to submit your returns so attracts Deregistration.
- Once a company has been deregistered, the Registrar of companies removes the company from its active records. Legally, the company will now cease to exist and the company name will become available to the general public for registration.
- Late annual return submission penalties
- You won’t be able to recover your company documents when they are lost.
However, once the company is in the deregistration process due to the non-payment of annual returns, it is possible for the deregistration process to be cancelled if all outstanding annual returns are paid up to date.
Ways to avoid incurring penalty fees include:
- Being aware of your company’s Annual Return Date
- Ensuring that your company’s financial statements are prepared well (Know your authorized & issued share capital)
- Seeking assistance from a company secretarial firm such as BR Consultants so the annual return is taken care of and reminders are sent to the company
Requirements needed to file an Annual Return
- Copies of Company Documents