If the annual accounts are not filed with the Commercial Registry, the company's record must be closed, and no further actions can be registered. There are one exception: appointing liquidators, revoking powers of attorney, dissolving the company, or removing directors.
One of the most basic obligations of company administrators is to prepare and file the annual accounts in the Commercial Registry in the month following their approval by the general meeting.
This obligation has controversial aspects and vicissitudes. To begin with, we must discuss the consequences of non-compliance.
This closure occurs when one year has passed since the obligation to deposit ends, that is, one year from the end of the fiscal year.
We can avoid closure in two ways: depositing the outstanding annual accounts, or those of the last 3 years, or even presenting a certificate of impossibility of deposit because they have not been approved.
Sanctions
The other consequence we must bear in mind is that failure to file these accounts entails a financial penalty imposed by the ICAC (Spanish Accounting and Auditing Institute). In this regard, a sanctioning procedure is initiated for non-compliance with the obligation to file annual accounts, and the objective of these sanctioning procedures is to encourage companies to submit their annual accounts, given the disregard that has sometimes occurred in the commercial history of our country.
The penalty can range from €1,200 to €60,000, or up to €300,000 if sales exceed €6 million. Penalties will be calculated as a percentage of the assets reported in the last corporate tax return.
This offense has a statute of limitations of 3 years.
The aim of these regulations is to improve corporate transparency and protect the interests of third parties. It's important to note that the existing annual accounts system in Spain is designed to allow companies to decide whether or not to enter into contracts with other companies—that is, whether or not to trust the creditworthiness of the counterparty. At the same time, credit insurers are responsible for validating transactions, and they will do so based on accounting and tax documentation.
We must keep in mind that many credit transactions are carried out through the delivery of goods or services, with payment due weeks later, or even months later. Some goods transactions are delivered and paid for in 90 days, which implies trusting the receiving business. For this reason, the seller can insure the transaction with a credit insurance company; these companies will only insure the transaction if the recipient has properly maintained, filed, and organized accounting records.
Losses that reduce equity to less than half of share capital
On another note, it's important to consider that if losses reduce equity to less than half of the share capital, debts can be claimed from the directors who allowed this to happen. However, there is a presumption of liability against the director if the accounts are not filed. This puts pressure on directors to perform their duties properly.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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