Are you an entrepreneur filing your annual accounts for the first time?
The annual financial statements include various documents: the income statement, the balance sheet for your business and, if necessary, additional documents .
The latter must be carried out at the end of each financial year , in line with inventory entries and other accounting records.
Finally, these accounts must be audited by a chartered accountant who can certify their validity.
Even though this step may seem simple, it does involve a certain amount of information.
Today, we focus on the filing of a company's annual financial statements, to shed light on all the grey areas!
The annual financial statements must be filed with the Registrar of the Commercial Court within one month of their approval.
It's a legal obligation, but for whom?
This filing of accounts is in fact mandatory only for "commercial" companies.
Non-trading or liberal companies are exempt.
This includes :
- Joint stock companies such as SA, SAS or SCA
- Limited liability companies, like SARLs and EURLs
- Limited partnerships
Guide to the 3-step procedure for approving annual financial statements, and description of documents to be provided !
Organizing the Annual General Meeting
In order to hold a successful AGM, all stakeholders must be present.
The way in which such an event is convened depends on what is stipulated in the company's articles of association. The notice of meeting must be sent together with the management report, the statutory auditor's report (if available), the text of the resolutions and the annual financial statements themselves.
At the AGM, shareholders or associates- depending on the legal form of the company - give their opinion on the management of the company, and also distribute any dividends.
It is this AGM that will guide the director in the decisions to be taken, in order to avoid potential penal sanctions in the event of a breach of his obligations.
This must be organized within 6 months of the end of the previous financial year.
Preparing the file
Following approval of the accounts at the AGM, and in preparation for filing the annual accounts with the Registrar of the Commercial Court, a number of documents need to be prepared. Firstly, the Minutes of the Annual General Meeting, which constitute the only proof of approval or rejection of the accounts, must be drawn up.
The management report, already drafted at the time of the AGM, is also a document that needs to be completed for inclusion in the filing package.
These must be accompanied by the financial statements, the AGM attendance sheet, the proposed appropriation of earnings then submitted to the AGM, and potential appendices.
If you don't feel comfortable drafting such legal documents, you can leave it to the professionals.
Filing annual financial statements with the Registrar of the Commercial Court
In order for the annual financial statements to be validated, the minutes and financial statements must be submitted to the Registrar of the Commercial Court within 2 months of the Annual General Meeting.
It is then possible to request that your accounts not be published, if and only if your company meets the necessary eligibility criteria.
Finally, a confidentiality agreement concerning the annual accounts must be added.
Finally, sanctions may be applied if you fail to file your annual financial statements.
It is important to know that the possibility of asking the Commercial Court to issue an injunction against a company to file its annual accounts, if this has not yet been done, is open to any interested party, as well as to the Public Prosecutor and finally to the President of the Commercial Court himself.
Please note that such an injunction procedure concerns your last 5 financial years.
If the latter is not complied with within one month of the injunction, the Chairman may take action to obtain accurate information about the financial and economic health of the company in question.
Failure to comply with the injunction may result in a fine of €1,500, or €3,000 in the event of a repeat offence.
In conclusion, the procedure for approving and filing annual financial statements must be strictly adhered to, because it is mandatory and to avoid any penalties.
Written by our expert Quentin Moyon
May 22, 2018
