Are you fulfilling your obligations in relation to the Commercial Register? Even small companies face hundreds of fines!
The Act on Public Registers is relatively new, but it concerns the obligations of the entities that were already in place before the recodification of the Private Law. Although the new widespread rules have been in force for two years, not everyone has already identified with them. Many companies have not yet realised the importance of the explicitly expressed deadlines for statements and are unnecessarily exposed to the risk of significant sanctions.
The obligation to include financial statements was already contained in the original legal regulation, in the Commercial Code. A list of documents obligatorily was published in the Commercial Register, but there was no exact date of publication. A fixed interpretation following other legislation was interpreted as “by the deadline of the next statement”, generally by the end of next year. However, by law, the obligation to include the statements in the Commercial Register was, in essence, not more widely controlled or enforced by the registration courts, because of the vague legal regulation. The amendment to the Act on Accounting brought light to the issue of publication. The deadline for publication is explicitly expressed as follows:
- Compulsorily audited entities within 30 days after the auditor’s audit and approval by the competent body of the company, no later than 12 months after date of the balance sheet (although not approved)
- Other entities are required to publish within 30 days of approval by the competent authority, but no later than 12 months after the date of balance sheet (irrespective of approval)
- The consolidated financial statements have the same rules for publishing as the statutory audited entities
I would also like to highlight the need to update the content of the financial statements. The amendment to the Act on Accounting and the related implementing regulations also brought new accounting statements, which were first applied for 2016, as well as the content of the annexes to the accounting statements. I am still confronted with redundant information, especially in the annexes to the accounts.
The financial offices recently became interested in the publication of the statements in the register. During controls or an investigation carried out by the tax administrator, we are faced with the fact that the tax inspector warns one against a breach of duty. The Act on Accounting contains provisions on the consequences of a breach in the obligatory publishing of the statements and imposing a fine. The amount of the fine may, in case of non-publication of the financial statements, amount to up to 3% of the value of the assets, respectively, 3% of the value of the consolidated assets.
Although this is a breach of duty in relation to a public register, the procedure for imposing the fine will be made by the local tax office. That is why I recommend one to fulfil the duties in relation to the register as soon as possible, not only for the current period of 2017, but for the past years also.
Correct scope and method of publication
- Small and micro entities that are not required to get an auditor to audit the statement publish the balance sheet and the annex to the financial statements and may prepare a balance sheet in a shortened form
- Small and micro entities that have the auditor’s obligation to audit the financial statement publish the balance sheet, profit and loss account and the annex in full scope and the annual report* and the auditor’s report
- Mid-sized entities publish the balance sheet, the profit and loss account, the annex to the financial statements, the cash flow statement, the statement of changes in equity capital, the annual report* and the auditor’s report.
- Large entities publish the balance sheet, the profit and loss account, the attachment to the financial statements, the cash flow statement, the statement of changes in equity capital, the annual report*, the auditor’s report and the payment report.
- In addition, the controlled or managed entities must compile and publish a report on the relationships.
- Accounting entities keeping simple accounting publish an overview of the assets and liabilities.
- The consolidated financial statements, the consolidated annual report* and the consolidated payment report are published by the consolidating entity.
* An obligatory part of the annual report is the financial statement, so it is not necessary to publish it separately.
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