In this article, we will tell you why your business may be (publicly) tagged “Inactive” on the CAC public search results, how to fix it. We would also tell you every other thing you need to know about the CAC annual return.

More and more business owners are getting oblivious of the CAC annual return and to make matters worse, only a very few are aware of their (publicly displayed) status on the CAC Corporate Registry. 

In fact, according to data collected from a reliable source, a considerable proportion of these registrants are registering their businesses only because the CAC Certificate is mandated by banks as a condition for opening a Corporate Bank Account for their business. 

Of those that are aware, some simply disregard this notice based on the opinion that it is not possible for their business or company to be de-registered since they had already registered it, coupled with the lack of education on this subject.

Why Your Business Status Shows “Inactive” On The CAC Registry

This is because you have not filed your Annual Return.

It is compulsory for every registered business to file their annual returns with the Corporate Affairs Commission not later than 30th of June every year. This is the only way to let the Commission know that your company is still operating. 

If you don’t file your annual returns over a long period, the Commission may de-register or delist your business name or company from the Corporate Registry. As a consequence, you may be unable to open a new corporate account or access corporate bank loans. 

The filing fee is relatively cheap but if you don’t file your annual return within the stipulated period, you will incur an additional fee as a penalty, which is typically higher than the filing fee.

The rest of this article would attempt to satisfy some curiosities surrounding the filing of annual returns by answering a few important questions viz.:

• What is an annual return?
• Who is to file an annual return?
• Disadvantages of not filing annual return
• Advantages of filing annual return
• Conclusion

What is the CAC annual return?

Like the name implies, “annual return”, is a document or a payment that is filed at once a year. 

CAC annual return is a report that businesses or companies must send to the government each year by giving particular details, for example, the name of the business owner, name of company directors, address, and details of assets and shares.

Annual return is what will make CAC understand that the business still exists. CAC annual return is filled once every year.

Who is to file an annual return?

The filing of annual returns with the CAC is not for individuals. It is not for all businesses or companies. 

CAC annual return is only for those who have a registered entity with the Corporate Affairs Commission. So, If you have a business, company, incorporated trustee, or religious organization registered with CAC, it is mandatory for you to file your annual return. Annual return is not optional, it is compulsory for all registered entities.

Disadvantages of not filing CAC annual return

You might be wondering, what might actually be the disadvantages of not filing your CAC annual return. There are some disadvantages attached to not filing it which are;

1. According to the Company and Allied Matters Act as amended 2020 (CAMA 2020), failure to file an annual return for a consecutive period of 10 years is a ground for “striking off” the name of such an entity from the CAC corporate register. The commission will believe that such a business or company does not exist anymore. Hence, the commission will strike off the name which means the certificate becomes void and no longer useful.
2. The commission will notify the general public by publishing those names in at least 3 national newspapers that the said entity has been struck off and nobody should engage in whatsoever businesses or transactions with them again.
3. There is a late penalty for not filling it at the right time. It must not be delayed. It must be done at least once a year.
4. The name won’t be available for registration after it has been struck off. i.e. the proprietor won’t be able to register such a name again unless the annual return is filled up to date.
5. It will be a disgrace to the entity for not filing annual returns and allowing CAC to strike it off.

Advantages of filing annual return

What added benefits do you enjoy when you regularly file your annual return?  Below are some of the advantages.

1. It portrays you as a law-abiding citizen
2. It helps the commission to understand that such an entity still exists.
3. It allows you to have access to some government benefits such as survival funds, corporate loans, contracts, and many more.
4. It saves time whenever such an entity wants to do any post-incorporation. Post incorporation is any registration that is done after an entity has been registered. For example, upgrading from a business name to a Limited Liability Company or Non-Governmental Organization.
5. When the annual return is paid at the right time, you won’t pay a penalty fee, in other words, it means you’ll pay comparatively less than those who have defaulted.

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Conclusion

In conclusion, filing of annual returns is good for your registered entity; it allows the CAC to determine your consistency in business. Once filed, you’re safe. If you default for 10 years, your business entity would be struck off. Finally, remember, the CAC annual return is to be filed once a year. 

We think that the CAC should do more to enlighten the public on annual return filing and its advantages, especially on TV.

For your business and/or company registrations and Brand Advisory, please send us a message.

The post Here Is Why Your Business Is Tagged “Inactive” On The CAC Registry appeared first on Branditechture.

The Relationship Between Shoprite Holdings and Investors of Shoprite Nigeria

The move means Shoprite Holdings will sell its entity in its entirety to another investor, who will continue to run the business, thereby preserving the brand’s existing name and goodwill. In other words, it means that despite an imminent change of hands, the brand, “Shoprite” would still continue to exist in Nigeria.

Nigeria is one of 15 Shoprite countries in Africa. In Nigeria, Shoprite operates around 26 supermarkets across the country, with an estimated 1,900 Nigerians on their payroll. 

The company claimed that they had taken the decision to leave “following approaches from various potential investors”.  The group also confirms that the decision is in accordance with its plans to re-evaluate its operating model in Nigeria.

Shoprite also disclosed in their latest operational and voluntary trading update that an official process to sell its entire stake had begun.

Why Did Shoprite Leave Nigeria?

The true reason behind Shoprite’s decision to exit the Nigerian market is still unclear, but it is likely due to the current economic situation of the country —  but there could be more to it.

Firstly, Nigeria, despite its huge population, is a highly competitive space; Retail business is all about the survival of the fittest. 

Shoprite disrupted the Nigerian retail ecosystem when it made its entry into the country in the year 2005. But its position as Nigeria’s leading retail brand was not going to last forever. 

Previous retail outlets like Park ‘n’ Shop rebranded and injected a significant amount of funds into their brand strategy and business expansion efforts. 

The rebranding of Park ‘n’ Shop happened in 2010, when Artee Group, the owners of Park n’’ Shop, took a bold step in 2010 when it decided to merge with SPAR International to secure the master license for Nigerian operations. Since then, all the new Park ‘n’ Shop outlets were launched under the SPAR banner.

With rife competition from homegrown retail outlets like Ebeano, Citydia, and Adiba, it only made sense for them to divest, having held on to the Nigerian operations for seventeen good years.

There are also several challenger retail brands in Nigeria’s commercial capital cities posing a serious threat to Shoprite’s market share. 

For some reason, Shoprite does not publish revenues generated from its Nigerian operations, so I wouldn’t be able to quote actual figures.

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Shoprite Failed To Leverage e-Commerce

Local competitors like SPAR and Ebeano additionally offer their shoppers an online shopping experience, in which goods are delivered to their doorsteps. However, Shoprite’s business is modelled around physical store visits. 

A Shoprite Outlet in Kano, Nigeria. Credit: AFP PHOTO

Unfortunately, this has remained unchanged for almost two decades, despite the exponential increase in the number of internet users in Nigeria over the past ten years.

As internet services become faster and cheaper, more and more Nigerians would be moved towards leveraging the convenience of e-commerce to meet their shopping needs. Shoprite was leaving a lot of profit on the table by underestimating the power of e-commerce, but the management was perhaps not ready to make that change. 

The Xenophobic Riots & Shoprite Nigeria

In September 2019, Shoprite and MTN Nigeria were among the South African brands targeted by angry protesters demonstrating their disapproval of the Xenophobic attacks in South Africa. 

While some users subtly boycotted the two South African brands for their alleged quietness on the issue, some more violent groups attacked several retail outlets nationwide. 

They’re destroying Shoprite😩💔 pic.twitter.com/vH4x66PMjF

— 𝐍𝐰𝐚𝐧𝐞𝐫𝐢 𝐅. 𝐎𝐥𝐮𝐜𝐡𝐢 (@FirstLove04_) September 3, 2019

Shoprite was the worst hit; For example, a Shoprite outlet at Circle Mall, Jakande, was razed down by fire after being looted dry. A few Shoprite outlets also suffered what seemed like a nationwide loot. 

Lekki CIRCLE MALL (SHOPRITE),Jakande is reportedly burnt over night by hoodlum… 11/20/20#NIGERIAPREVAIL #WhereIsBuhari #EndSARS #EndBadGoveranceInNigeria pic.twitter.com/klBKWTHngT

— LEEREEKs the STYLIST (@LEEREEKss) October 22, 2020

Since Shoprite Nigeria does not publicly publish its financial reports, we are unable to determine the true financial damage suffered by the company, but it was an obvious setback. 

The Covid -19 Pandemic

As mentioned earlier in this article, Shoprite’s business model is built around physical store visits. As the Covid-19 awareness heightened across various African states, it was almost the end of the era of brick-and-mortar retail. 

After several weeks of stay-at-home orders by the government, you’d be forced to ask “what really is the future of physical retail stores?”

Shoprite has dominated the retail market since the mid-2000s, but with the advent of the internet era, a whole new paradigm of sales and marketing changed the retail industry completely. Shoprite was still struggling to integrate this to its business model when the Covid-19 pandemic came, giving it a couple low jabs and upper-cuts.

Nigeria’s current unforgiving operating environment is also another difficult confrontation that Shoprite has quietly faced. 

The Muhammadu Buhari-led administration has claimed that it is focusing on “supporting” locally made goods by placing a ban on forex availability for the importation of local alternatives. 

This has negatively impacted the number and variety of products Shoprite can feature on their shelves.

Taxes became higher and since Shoprite Nigeria makes money in Naira, they must first convert to dollars before converting back to Rands. As a matter of fact, Naira’s susceptibility to exchange rate devaluation continued to pose a major challenge to the brand. 

Two years into the present administration, Nigeria faced a currency crisis. Shoprite narrated that it had about 2.3 billion South African rands (2.3bn ZAR) in cash locked up in Nigeria and Angola due to currency restrictions. 

Many foreign-owned businesses in Nigeria occasionally face the same “restriction” which is attributed to limited liquidity in the Nigerian Autonomous Foreign EXchange Rate Fixing (NAFEX)  window.

In the light of all the challenges discussed above, I think this exit was inevitable. 

Shoprite finally bids Nigeria farewell

On the 1st day of June 2021, Ketron Investment Limited — a group of investors under the leadership of Tayo Amusan, who also runs The Palms, completed the acquisition of Shoprite operations in Nigeria, after winning a long bidding war involving three other suitors.

According to Amusan, the Federal Competition and Consumer Protection Commission (FCCPC) has approved a change of ownership, which will now operate a franchise model.

The post Why Shoprite Finally Decided To Leave Nigeria appeared first on Branditechture.