Introduction
Keeping a business legally active in Nigeria is crucial for operational continuity, credibility, and access to financial opportunities. The Corporate Affairs Commission (CAC) oversees all business registrations and compliance under the Companies and Allied Matters Act (CAMA) 2020. Many businesses erroneously believe that registration is a one-time event. However, ongoing compliance, including filing annual returns and maintaining proper documentation, is what keeps a company recognized by law. Failure to meet these obligations can lead to delisting, which erases legal status and severely limits business prospects. This article explores six essential steps Nigerian businesses must follow to maintain legal activity with the CAC, based on the latest regulatory updates and expert insights.
Step 1: Choose a Unique Business Name
The journey to keeping your business legally active begins with selecting a unique business name. Entrepreneurs must submit at least two distinct name options on the CAC portal for clearance. These names must not be already in use or misleading.
- Approval of the business name ensures a legally distinct identity.
- The chosen name can be reserved for 60 days upon paying the reservation fee.
- Business owners should avoid names that closely resemble existing companies or violate CAC guidelines.
Pascal Oparada, business editor, emphasizes:
“Choosing the right business name is more than branding; it’s about securing your business’s legal identity from the start.”
Step 2: Prepare Key Governing Documents
Following name approval, businesses must prepare essential governing documents compliant with CAMA 2020:
- Memorandum of Association: Outlines business objectives and share capital structure.
- Articles of Association: Details internal governance and operating rules.
Templates are available on the CAC portal, but they must be customized to reflect the specific business setup. These documents need to be signed by promoters for validity.
According to recent CAC guidelines, these documents form the foundation of corporate governance and are demanded during registration and subsequent compliance checks.
Step 3: Declare Share Capital
Under the law, a minimum share capital of ₦100,000 is required for private companies. Declaring share capital is essential for formalizing ownership and attracting investor confidence.
However, while a higher share capital may boost credibility, it also leads to increased statutory fees and stamp duties, which businesses should balance carefully during registration.
For entrepreneurs, this step signals seriousness to stakeholders and fulfills regulatory requirements, ensuring the company’s capital is appropriately accounted for in official records.
Step 4: Appoint Directors and Shareholders
Companies must appoint at least one shareholder and one or more directors (depending on the company type):
- Directors must be at least 18 years old, mentally sound, and must not be legally disqualified.
- Full details of directors’ and shareholders’ names, addresses, occupations, and identification are required.
- Proper appointment is needed to maintain compliance with CAC and ensure proper company management.
The CAC requires submission of these details as part of the online registration and filing process, with continuous updates mandated as changes occur.
Step 5: Submit Registration Documents and Pay Fees
The next crucial phase involves:
- Filing key documents such as CAC Form CAC1.1, Memorandum and Articles of Association through the CAC online portal.
- Paying statutory registration fees and stamp duties.
Upon approval, the CAC issues a Certificate of Incorporation, which confirms the company’s legal status.
However, incorporation is just the beginning—ongoing compliance depends on fulfilling post-registration obligations.
Step 6: File Annual Returns and Maintain Compliance
Filing annual returns is the most critical practice for keeping a business legally active:
- Returns must be filed within 42 days after each anniversary of incorporation.
- Reports include updated company information, details of Persons with Significant Control (PSC), and payment of filing fees.
- Failure to file annual returns on time can result in penalties and increase the risk of being struck off the CAC register.
In 2025, CAC removed about 247,000 companies from its records for failure to file returns for over 20 years, underscoring the importance of compliance.
Ezekiel Akingbola, a compliance expert, notes:
“It’s not enough to register your company; you must also protect it by filing returns regularly to keep it lively and credible.”
Additional Legal Obligations to Keep Your Business Active
Beyond these six core steps, businesses should also:
- Register for a Tax Identification Number (TIN) with the Federal Inland Revenue Service (FIRS).
- Obtain necessary industry-specific permits and licenses.
- Comply with labor laws and environmental regulations.
- Keep accurate financial records.
- Renew business premises registration and other local permits as required.
Frequently Asked Questions (FAQs)
Q1: What happens if I don’t file annual returns with the CAC?
A: Your company risks being marked inactive or struck off the CAC register, losing legal status and business credibility.
Q2: Can I reactivate a struck-off company?
A: Yes, by promptly filing outstanding returns and paying penalties, you can apply to the CAC for reactivation.
Q3: How long does CAC registration take?
A: Online registration usually takes between 24 to 48 hours once all documents are correctly submitted.
Q4: Is CAC registration enough to begin business operations?
A: No, you must also fulfill tax registrations and acquire necessary permits to legally operate.
Q5: How do I prevent my business from being delisted?
A: Stay compliant with all CAC filing requirements, pay fees timely, update company records, and file annual returns regularly.
Experiences and Quotes from Business Owners
“When I failed to file my annual returns one year, my company was marked inactive. I had to go through a stressful reactivation process. Since then, staying compliant has been my top priority.” — Adaeze, Lagos-based entrepreneur.
“The CAC enforcement has become stricter. Filing returns is now easier with the online portal, but businesses must be disciplined to avoid penalties.” — Musa, business consultant.
Meta Tags for SEO
- Title: 6 Steps to Keep Your Business Legally Active with CAC in Nigeria
- Description: Discover the six essential steps every Nigerian business owner must take to keep their company legally active and compliant with Corporate Affairs Commission (CAC) rules in 2025.
- Keywords: CAC business compliance, keep business active CAC, annual returns CAC, Nigerian business registration, CAC registration process, avoid business delisting Nigeria
Maintaining your company’s legal status with the Corporate Affairs Commission is a combination of prudent registration, diligent governance, and timely compliance. Following these six steps will safeguard your business from delisting risks, enhance credibility with stakeholders, and open doors to funding and growth opportunities. Remember that incorporation is just the start—the real work is sustaining compliance to keep your business legally active and thriving in Nigeria’s competitive landscape.