February 23, 2026

In Nigeria’s current regulatory climate, compliance with the Corporate Affairs Commission (CAC) is more than routine paperwork — it is a statutory obligation under the Companies and Allied Matters Act (CAMA) 2020. Many business owners only discover compliance problems when they try to: At that moment, they are informed that their company has been flagged inactive or non-compliant. By then, a preventable oversight has already become a serious business interruption. Below are the most common CAC compliance errors — with the specific legal provisions involved. 1. Failure to File Annual Returns (Section 417 CAMA 2020) Section 417 of CAMA 2020 makes it clear: every company must file annual returns with the CAC, whether the company is active or dormant. There is no exemption for inactivity. When annual returns are not filed: Under Section 692 of CAMA 2020, the CAC has the power to strike off a company that fails to comply with statutory requirements. Many directors mistakenly believe that “no business activity” means “no filing requirement.” Legally, that assumption is incorrect. 2. Failure to Notify CAC of Changes in Directors or Shareholders (Sections 175 & 288 CAMA 2020) Business structures evolve — directors resign, new shareholders join, shares are transferred, or capital increases. However, Sections 175 and 288 of CAMA 2020 require companies to formally notify the CAC of such changes within the prescribed time. Common mistakes include: When these filings are not completed, there is a mismatch between: That inconsistency can delay transactions, trigger due diligence concerns, and complicate corporate governance processes. 3. Non-Disclosure of Persons with Significant Control (PSC) (Section 119 CAMA 2020) Section 119 of CAMA 2020 mandates disclosure of Persons with Significant Control (PSC) — commonly referred to as beneficial owners. This requirement was introduced to improve corporate transparency and align Nigeria with global anti-money laundering standards. Failure to disclose PSC details can: Beneficial ownership disclosure is no longer optional compliance — it is part of corporate credibility. 4. Abandoned or Rejected Portal Filings While not tied to a specific section alone, electronic filings submitted through the CAC portal must be properly completed and approved to satisfy statutory obligations under CAMA 2020. Frequent issues include: An incomplete or rejected filing does not satisfy statutory requirements. In law, it is treated as non-filing. Many companies believe they have complied — until a bank, regulator, or investor discovers the gap. 5. Failure to Maintain Statutory Registers (Sections 83 & 331 CAMA 2020) Beyond filings, CAMA also requires companies to maintain statutory registers. Under: In addition, PSC records must be properly documented under Section 119. Failure to maintain these registers may expose the company during: Good governance begins with proper record keeping. Legal Consequences of CAC Non-Compliance Where companies fail to meet obligations under CAMA 2020, the consequences may include: A company that is struck off ceases to legally exist — meaning it cannot sue, enter contracts, or operate lawfully. Even before striking off, non-compliance can effectively freeze operations. How to Prevent Your Company from Being Frozen To remain in good standing under CAMA 2020: ✔ File annual returns as required under Section 417✔ Notify CAC promptly of structural changes under Sections 175 & 288✔ Comply with PSC disclosure requirements under Section 119✔ Maintain statutory registers under Sections 83 & 331✔ Conduct periodic compliance reviews Proactive compliance protects your legal identity and business continuity Final Thoughts Incorporating a company is only the first step. Maintaining compliance under the Companies and Allied Matters Act 2020 is an ongoing legal responsibility. Non-compliance may not appear urgent — until it disrupts banking, contracts, funding, or regulatory approvals. At Sunmola David & Co, we conduct structured CAC compliance audits, regularize outstanding filings, and restore companies to good standing across Nigeria. Compliance is not paperwork.It is corporate protection.