Wale and Chioma have finally gotten their fashion startup incorporated with DIYLaw. It was a breeze, thankfully. Now they have started operations and are about taking the fashion market by the storm.
Chioma came across a term called “post-incorporation” on a WhatsApp group for entrepreneurs that she is a member of. She isn’t exactly sure if there are still any more legal obligations she and Wale have to meet after incorporation.
Thankfully, we always bring the right legal information at the nick of time.
Major post-incorporation obligations that Chioma and every entrepreneur should know about are:
1. Filing of Annual Returns
According to the Companies and Allied Matters Act (CAMA), every company is required to make and deliver to the Corporate Affairs Commission (CAC), its annual returns in the prescribed form.
The company’s financial statement is to be submitted to the CAC when filing the annual returns.
The importance of filing annual returns is to notify CAC that your company is still in operation. The CAC will oftentimes not allow you file other post-incorporation changes without your annual returns being up to date.
The first annual returns of an incorporated company must be filed 18 months after the company’s incorporation and within 42 days after the first annual general meeting for the year.
Annual returns need not be filed for a business name for the first year of registration. For subsequent years, the annual returns need to be filed not later than the 30th of June of every year.
For incorporated trustees, the annual returns must be filed between the 30th of June and the 31st of December every year other than the year of incorporation.
Noncompliance with filing your annual returns attracts a penalty and the risk of having your company being struck off the CAC’s companies register.
2. Increase/Decrease of Share Capital
Where your company needs to increase or decrease its share capital, you will need to notify the CAC in the prescribed manner.
3. Appointment/Removal of Directors
According to CAMA, a company is required to always have at least two directors.
Where your company decides to remove existing directors and appoint new directors, the CAC has to be notified.
4. Allotment of Shares to New Shareholders/ Transfer of Shares
Where your company issues shares to investors or anyone who indicates interest in purchasing the shares of your company, the CAC has to be notified of this.
Also, if a shareholder in your company decides to transfer all or part of his shares in the company to anyone, the CAC has to be notified.
5. Change of Company Secretary
Every company is required by CAMA to have a company secretary. The CAC has to be informed where the company secretary is removed or a new one is appointed.
6. Change of Registered Address
The CAC also has to be notified where you change the registered address of your company.
You can engage the lawyers on our DIYENGAGE platform where your company needs to fulfil any of these post-incorporation obligations.