Key Points
- CAC compliance mistakes to Avoid Let’s explore the 10 most common CAC compliance mistakes Nigerian companies make, and how you can avoid them
- Avoid it: File every share transfer or allotment with the CAC within the required time frame (typically within 7 days of the transaction)
- Avoid it: Keep your secretary information current and ensure they’re aware of ongoing compliance obligations
- Avoid it: File every year, even if your company didn’t trade
- Avoid it: Always review your PSC section before filing returns
For most Nigerian business owners, compliance with the Corporate Affairs Commission (CAC) feels like an afterthought: something to “sort out later” when it’s time to apply for a contract, loan, or grant.
But those “later” moments often reveal hidden problems that could have been avoided months (even years) earlier.
From outdated company records to overlooked filings, these small administrative errors can quietly pile up into penalties, contract denials, or an “inactive” company status that scares away investors and partners.
At Qrafteq, we’ve worked with dozens of businesses who discovered too late that what they thought was a simple CAC oversight had already cost them millions in penalties and missed opportunities. The frustrating part? Most of these issues were entirely preventable.
CAC compliance mistakes to Avoid
Let’s explore the 10 most common CAC compliance mistakes Nigerian companies make, and how you can avoid them.
1. Ignoring Annual Returns Until It’s Too Late
Annual returns aren’t a tax: they’re a declaration that your company is still operational and compliant with CAC regulations.
Many businesses skip this filing for years, assuming it doesn’t matter because “nothing changed” or “we didn’t trade.” But under CAMA 2020, the CAC can flag or delist any company that fails to file returns for 10 consecutive years. In fact, over 300,000 companies have been delisted in the last three years for non-compliance.
Even before that 10-year mark, penalties begin to pile up. A four-year delay, for instance, can attract cumulative fines that make reinstatement painfully expensive (not to mention the reputational damage when potential partners or banks see your “inactive” status).
Avoid it: File every year, even if your company didn’t trade. It’s a small cost compared to the consequences of neglect.
2. Duplicated or Incorrect PSC Records
This is one of the most damaging but least understood CAC mistakes.
A single duplicated or outdated Person with Significant Control (PSC) record can halt your annual return filing and attract heavy daily penalties against your company, directors, and secretary.
We once handled a client’s case where a ₦5,000 PSC correction fee turned into ₦19.75 million in accumulated penalties over three years because the issue was left unresolved. That’s not a hypothetical; it’s a real case that shows how quickly “small details” can become financial disasters.
Avoid it: Always review your PSC section before filing returns. Correct duplicates or outdated details immediately.
Read also: Why You Must Fix PSC Issues Before Filing Your Annual Returns
3. Outdated Company Information
Your company’s registered address, business nature, directors, and secretary must always reflect current reality.
Yet, many businesses move offices, change directors, or modify shareholding structures without updating CAC records. This creates discrepancies that can delay filings, affect due diligence checks, and trigger compliance flags.
When your CAC profile says you’re operating from an old address, or lists directors who left years ago, it raises questions about how seriously you manage your business.
Avoid it: Update every corporate change (no matter how small) through official CAC filings. Address changes, director appointments, resignations: file them all promptly.
4. Unfiled Share Transfers or Allotments
When ownership changes, the shareholding structure and PSC information must be updated with the CAC. Many businesses forget to file these changes, leading to ownership confusion, disputes, and compliance gaps.
If someone sells their shares but the CAC still shows them as a major shareholder, it creates a mismatch between legal records and reality. And that mismatch can come back to haunt you during due diligence or regulatory reviews.
Avoid it: File every share transfer or allotment with the CAC within the required time frame (typically within 7 days of the transaction).
5. Missing or Outdated Company Secretary Information
Every Nigerian company must have a company secretary, and that secretary’s details must be valid and updated on your CAC profile.
Omitting or using an inactive secretary in your filings can invalidate submissions. If your listed secretary is no longer reachable (or worse, deceased), it creates administrative complications that can delay important filings.
Avoid it: Keep your secretary information current and ensure they’re aware of ongoing compliance obligations. If your secretary resigns, appoint a replacement immediately and update the CAC.
6. Incorrect Share Capital Reflected in Filings
Sometimes, the share capital declared during registration doesn’t match what appears in subsequent filings or bank documents. This inconsistency can raise red flags with both the CAC and financial institutions.
For example, if your incorporation documents say ₦1 million in share capital but your annual returns reflect ₦500,000, auditors and regulators will want an explanation. And if you can’t provide one, it suggests poor record-keeping or intentional misrepresentation.
Avoid it: Cross-check your share capital figures during each filing cycle to ensure consistency across all platforms: CAC, FIRS, and banking records.
7. Using the Wrong Business Name for Filings
It’s common for businesses that operate multiple names or brand variations to accidentally use a trading name in place of their registered entity.
This might seem minor, but it can cause confusion in corporate verifications, especially when applying for contracts or bank accounts. Your trading name might be “SwiftPay Solutions,” but if your registered company name is “SwiftPay Technologies Limited,” using the wrong one on official documents creates verification delays.
Avoid it: Always use your official registered company name on all CAC filings and legal documents. Reserve your trading names for marketing, not compliance.
8. Failure to File Changes in Directors or Shareholders Promptly
When directors resign, pass away, or new ones are appointed, the changes must be reflected officially with the CAC.
Leaving outdated names on your CAC profile can result in legal complications, especially if former directors are still listed as “active” and are being held liable for company decisions they no longer participate in.
We’ve seen cases where businesses couldn’t proceed with important transactions because a former director (who had resigned years earlier) couldn’t be reached to sign documents, simply because the resignation was never filed.
Avoid it: File Form CAC 7 (for changes in particulars of directors) immediately after any directorship change happens. Don’t wait until your next annual return.
9. Neglecting to Obtain or Maintain a Tax Identification Number (TIN)
While the TIN isn’t directly managed by the CAC, your compliance profile links to it through the Federal Inland Revenue Service (FIRS).
Having mismatched or missing tax details can create verification issues and cause delays in CAC or government-related transactions. Banks, government agencies, and corporate partners now cross-check CAC and FIRS records routinely; inconsistencies raise immediate red flags.
Avoid it: Ensure your CAC, FIRS, and bank details align perfectly. If your TIN information changed, update it across all platforms.
10. Not Verifying Your Status Regularly on the CAC Portal
Many business owners assume their company is “active” just because it was once registered.
Unfortunately, the CAC portal often reflects “inactive” status for companies with overdue filings, uncorrected errors, or pending changes. And you might not discover this until you’re trying to submit a bid, open a bank account, or secure funding.
By then, the damage is done. Reactivating an inactive company takes time, money, and often forces you to miss the opportunity you were chasing.
Avoid it: Check your company’s CAC profile periodically (at least once every quarter). Act fast when you notice red flags or pending issues.
The Real Cost of Non-Compliance
Compliance mistakes rarely seem serious until they block your next big opportunity.
An “inactive” CAC status can disqualify your company from government contracts or funding opportunities. A missing PSC update can attract multi-million naira penalties that accumulate daily. Outdated information can weaken your due diligence profile before investors or partners even meet you.
Each of these issues chips away at your credibility and, eventually, your ability to grow. In Nigeria’s increasingly regulated business environment, clean compliance records aren’t optional. They’re essential.
How Qrafteq Helps You Stay Clean and Compliant
At Qrafteq, we specialize in helping Nigerian businesses stay compliant without the headache.
Whether it’s reconciling PSC data, updating old records, or managing multi-year filings, we help you file once and file right. Our team reviews your entire CAC profile to ensure every record (from directors to PSCs to share capital) aligns perfectly.
We don’t just file forms. We audit your compliance standing, identify gaps, and fix them before they become penalties. Because compliance isn’t just about avoiding fines. It’s about protecting your reputation, your eligibility, and your future growth.
If you’re unsure about your current CAC status or haven’t filed in years, it’s worth getting a professional review. Sometimes, the problem is smaller than you think, but the risk of ignoring it is far bigger than it looks.
Read Also:
- Why You Must Fix PSC Issues Before Filing Your Annual Returns
- 10 Common PSC Issues That Could Jeopardize Your Business Compliance in Nigeria
- Understanding the PSC Requirement in Nigeria: Why It Matters for Every Business
External Reference:
Read more on CAC’s official compliance and company regulation guidelines
Qrafteq helps Nigerian businesses stay compliant, confident, and ready for growth. If your CAC profile needs a professional review or you’re behind on filings, talk to us — and get compliant the right way.
