TITLE:
Causes and Effects of Failure to File Annual Returns in Developing Countries Based on the Theory of Planned Behavior and Economic Deterrence Theory
AUTHORS:
Kelvin Seta, Jackson Phiri
KEYWORDS:
Annual Return, Limited by Guarantee, Post Incorporation and Filing
JOURNAL NAME:
Open Journal of Business and Management,
Vol.7 No.4,
August
7,
2019
ABSTRACT: Companies are required by the Companies Act No. 10 of 2018 to file annual
returns with the Registrar of companies within ninety (90) days following the
year end. However, most companies do not comply with this requirement.
Therefore, this study is aimed at determining the causes and effects of failure
by companies limited by guarantee to file annual returns with Patents and Companies
Registration Agency (PACRA). The research study used a case study in a
descriptive form to get in-depth and detailed information on the causes and
effects of failure to file annual returns with PACRA by companies limited by
Guarantee. The study had a total sample size of 151 respondents with 121 from
companies limited by guarantee selected within Lusaka district and 30 PACRA
employees from the head office in Lusaka. The study was both qualitative and
quantitative using primary and secondary data. The primary data were collected using structured questionnaires using a simple random sampling
technique. The analysis was done both qualitatively and quantitatively using
the statistical package SPSS. The study findings revealed that, failure to file
annual returns by companies limited by guarantee was caused by a number of
reasons such as: weak or non-existent penalties, complicated filing process, lack of
understanding of the companies’ post incorporation obligations and limited
sensitization on the filing requirements for companies. Based on these results,
the study made the following recommendations: PACRA
should streamline the filing of annual return process to make it easier for the
clients to file. Additionally, the penalties for non-compliance should be more
punitive in order to deter any form of non-compliance. There is also a need
for PACRA to restructure their sensitization programs to ensure that all their
target groups are covered.