When directors must approve and circulate the accounts
The CAMA 2020 timetable for laying a Nigerian company's financial statements at a general meeting, who signs the balance sheet and when members get copies.
By Achekam · · 5 min read · For Running a business businesses in Nigeria
In many owner-managed Nigerian companies, "the accounts" are something the accountant prepares for the tax return, and the general meeting is a formality held, if at all, whenever the directors next meet. The Companies and Allied Matters Act, 2020 (CAMA) sees it differently. It sets a timetable for putting the financial statements before the members, says who must sign them and how long members must have them before the meeting, and ties the whole process to the company's annual return.
This article walks through that timetable as the Act sets it out, and how directors can run it without a last-minute rush.
The first meeting within 18 months, then every year
Under CAMA, section 388, the directors must lay the company's financial statements before a general meeting not later than 18 months after incorporation, and then at least once every year.
"Lay before" means present to the members at a general meeting. A new company therefore has a little longer for its first set; after that, the cycle is annual. Missing a year is not a small slip: under section 389, each director is liable to a penalty set in the Commission's regulations for non-compliance.
Statements no more than nine months old
The same section says the statements laid must be made up to a date not more than nine months before the meeting. That rule sets the real deadline.
In words: a company with a 31 December year end must hold the meeting at which those statements are laid within nine months of that date, so by the end of September. Statements made up to an older date cannot be laid at that meeting. If the accounts and any audit are still unfinished as the ninth month approaches, the statements cannot be laid in time. Plan backwards from the meeting date: the audit, the board's approval and the circulation to members all have to fit before it.
Two directors sign the balance sheet
Under section 386, the balance sheet laid or delivered must be signed on behalf of the board by two directors. A company with a sole director will need to look at how this applies to it with its company secretary or lawyer; for most companies, it means choosing two directors who will be available when the statements are ready.
Copies to members at least 21 days ahead
Under section 387, copies go to members and debenture holders at least 21 days before the meeting. That is a hard working-back point: the statements must be signed and ready to send three weeks before the meeting date, not on the day.
The annual return to CAC
Laying the statements is one half of the duty. Section 388 also requires the directors to deliver a copy of the balance sheet, profit and loss account and notes with the annual return to the Corporate Affairs Commission. Under the Act, every company must deliver an annual return at least once every year, though not in its year of incorporation, completed and signed by a director and the secretary. A company may apply to the Commission for an extension of time to file its annual return for a given year. The return itself is covered in the CAC company annual return.
Some companies do not need an audit. Under CAMA, a company is exempt from the Act's audit requirements for a financial year if it has not carried on any business since its incorporation, or if it is a small company within the meaning of section 394, unless at any time in that year it was an insurance company, a bank or another company prescribed by the Commission. Exempt from audit is not exempt from laying statements: the timetable above still applies. The full text of these sections is in the CAC's published copy of CAMA 2020, which also covers small companies, the audit exemption and annual returns.
Signing and circulating electronically
Getting two directors' signatures used to mean couriering paper between offices. In Achekam, any document can be sent for electronic signature with signature and initials fields placed on it, signers in order or all at once, an expiry and reminders. The signed PDF and a completion certificate are filed back into Documents. Two directors can sign the balance sheet from wherever they are, in a set order if the board wants the chair to sign second.
Know one limit before you rely on it. The signing completion certificate always describes the signatures under South Africa's Electronic Communications and Transactions Act, whatever the workspace's country. A Nigerian company should take its own advice on electronic signatures for its statutory documents, and keep that certificate in mind if the signed statements will be shown to a third party.
The firm preparing the statements can work in your books directly. A business appoints its accounting firm by the firm's Achekam address or firm code, as accountant, auditor or adviser, with an access level, and the firm accepts or declines. During the year, Achekam's management accounts show an income statement for a chosen period beside the period before, and a balance sheet at period end, so the board sees the year forming before the final statements are drawn up. How firms handle directors' electronic signatures is discussed in directors signing statements electronically.
A board calendar for the year
For a 31 December year end, working back from a meeting in September:
- January to March: books closed for the year; accountant and, where required, auditor appointed and briefed.
- By mid-year: draft statements reviewed by the board.
- At least 21 days before the meeting: statements approved, balance sheet signed by two directors, copies sent to members and debenture holders.
- The meeting: no later than nine months after the year end.
- After the meeting: annual return filed with CAC, with the balance sheet, profit and loss account and notes.
Agree the meeting date at the start of the year, and every other date falls into place behind it.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
