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The corporate business environment is regulated by certain requirements to be met for the effective operation of its business in Nigeria. When the necessary corporate compliance is adhered to by companies, it brings sustainable development to that organization. The major statute that imposed various compliance on companies is the Companies and Allied Matters Act 2020 (CAMA).
These various corporate compliances in Nigeria will be discussed below.
There are also post incorporation compliances to be met by Companies registered with the CAC, they are also to comply with the requirement of filing annual returns at the CAC. It is statutory compliance that all registered companies must submit their annual returns yearly to the CAC, to enable the commission to have up-to-date records of the company. The annual returns are yearly statements evidencing the performance of the company for the year and its financial position.
Apart from incorporation and post-incorporation, there are other several statutory compliances imposed by the virtue of CAMA and Companies Regulations. Some of these compliances include statutory meetings of the companies, filing of company resolutions with the CAC among others.
Furthermore, another corporate compliance to be adhered to by companies in Nigeria is the Employee Compensation Scheme.
In the determination of the contributions to be made to the Fund, all employees including those who work part-time and temporary employees are included in the assessment. Also, all allowances and entitlements paid to such employees within or outside Nigeria are calculated when considering the total payroll of an employer.
The IDTF Act further imposes a duty on employers to provide training for their indigenous staff to improve their job-related skills. It also provides that the Fund's Council may make a refund of up to 50% of the amount paid by an employer where it is satisfied that its training program is adequate.
Failure to comply and make contributions within the stipulated period in a calendar year attracts a penalty of five per cent (5%) of the amount unpaid for each month or part of a month after the date on which payments should have been made.
Companies that fail to comply with the various requirements that regulate a company in Nigeria face the risk of being sanctioned by the relevant authorities regulating it. Sanctions for non-compliance of companies could be in form of fines and penalties which could, in turn, affect the revenue made by the defaulting company; it can also have a negative impact on the cash flow of the company and disruption of the business activities of the company.
Non- compliance can also bring bad publicity to the company, thereby affecting the brand integrity of the defaulting company. It can also lead to revocation and withdrawal of the license, permits, or grants issued by relevant authorities in the applicable sector of the company.
Regulatory compliance is an intentional function that forms an integral part of the way business is operated by companies in Nigeria. For companies to operate in Nigeria without any or reduced management risk, it must comply with the above-highlighted statutory provisions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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