With the close of the fiscal year and major tax obligations either met or in progress—like Form 347 in February or Corporation Tax in July—financial managers, advisors, and accountants are now focusing on one of the year’s key processes: the preparation and deposit of annual accounts and the legalization of accounting books at the Commercial Registry.
Below, we review the deadlines, steps, and consequences of non-compliance with these obligations, with fully updated information for the 2025 fiscal year.
Documents Administrators Must Prepare
Company administrators are obliged to prepare the following documents within three months following the end of the fiscal year:
- Annual accounts
- Management report (including non-financial information statement, if applicable)
- Proposal for the appropriation of profit or loss
- If applicable, consolidated accounts and consolidated management report
Generally, if the fiscal year coincides with the calendar year, the deadline for preparation will be March 31, 2025, as established by Article 253 of the Capital Companies Act (LSC).
Legalization of Accounting Books: Deadlines and Purpose
Once the accounts are prepared, the next step is to legalize the mandatory accounting books: the daily ledger, the inventory and annual accounts ledger, and, if applicable, the minutes book and other corporate books.
What is the deadline for legalization?
This must be done within a maximum of four months following the end of the fiscal year. For fiscal years ending on December 31, 2024, the deadline is April 30, 2025.
Why are books legalized?
The purpose of legalization is to ensure that accounting entries cannot be altered afterward, granting them probative value before courts or inspections. This legalization must be done electronically through the Commercial Registry’s online portal.
Approval and Deposit of Annual Accounts
Once prepared, the annual accounts must be approved by the Ordinary General Meeting of partners or shareholders, which must be held within the first six months of the fiscal year. This means before June 30, 2025, if the fiscal year coincides with the calendar year.
When is the deposit of annual accounts made?
The deposit of annual accounts must be made within one month following their approval, and always at the Commercial Registry corresponding to the company’s registered address. This deadline is counted from date to date. For example, if the accounts are approved on June 30, they must be deposited by July 30.
The deposit includes:
- Balance Sheet
- Profit and Loss Account
- Statement of Changes in Equity
- Cash Flow Statement (for companies applying the normal model)
- Notes to the Financial Statements (Memoria)
- Certification of the approval agreement
What happens if the annual accounts are not approved?
If the accounts are not approved, administrators must reformulate them for presentation at a future meeting. However, the registry will not be provisionally closed if this circumstance is duly accredited by:
- A certificate with legalized signatures from the administrative body
- A notarial deed of the meeting stating the non-approval
It’s important to highlight that repeated failure to approve accounts can lead to a loss of confidence in the governing bodies, potentially requiring the administrator to resign if they cannot secure account approval.
Consequences of Not Legalizing Books or Not Submitting Accounts
Late Legalization
Although it does not entail a direct penalty, the Commercial Registry will record the non-compliance in the book’s endorsement. This information can negatively affect the company’s image with third parties.
Failure to Deposit Annual Accounts
If a year passes from the end of the fiscal year without the deposit of annual accounts, the Registry will proceed with the provisional closure of the company’s registration sheet (Art. 378.1 of the Commercial Registry Regulations), preventing the registration of new acts such as capital increases, mergers, or appointments.
Possible Economic Sanctions
The failure to deposit annual accounts can be sanctioned by the Institute of Accounting and Auditing of Accounts (ICAC) with fines ranging from €1,200 to €60,000. For companies with turnover exceeding €6 million, the penalty can reach €300,000 for each undeposited fiscal year (Art. 283 LSC).
Administrator’s Liability
Not submitting the annual accounts implies a lack of diligence according to Article 225 of the LSC. In insolvency situations, it could even lead to personal liability for the administrator if it is considered that they contributed to the worsening of the situation, as contemplated in current insolvency legislation.
Frequently Asked Questions (FAQs)
- Can I submit the deposit of annual accounts if they haven’t been approved yet? No. Only accounts previously approved by the General Meeting can be deposited. Otherwise, a certificate can be submitted to attest to the non-approval, but it will not be considered an effective deposit.
- Is it mandatory to legalize accounting books if my company had no activity? Yes. Even if there have been no accounting movements, the company must legalize its mandatory books, indicating this circumstance. It is a formal obligation that does not depend on the volume of activity.
- Where is the deposit of annual accounts made? The deposit is made electronically through the portal of the Commercial Registry corresponding to the company’s registered office. It is advisable to have a digital certificate and all documentation scanned and electronically signed.
Complying with the preparation, legalization, and deposit of annual accounts is not only a legal obligation but also a reflection of transparency and good business management. Avoiding sanctions, ensuring registry operations, and guaranteeing access to financing or public tenders largely depend on this formal compliance.If your company hasn’t started these procedures yet, now is the ideal time to get up to date and avoid unnecessary risks.
You can also contact us directly through this contact Form for us to call you, or if you prefer, you can schedule a free consultation or write to us on WhatsApp. We’re here to make the process easier for you!
