It should be recalled that the company’s director is obliged to prepare and make, within a maximum period of 3 months from the end of the fiscal year, the deposit of annual accounts. They should also prepare the management report, which will include, where appropriate, the statement of non-financial information and the proposal for the application of the result. As well as, where appropriate, the consolidated accounts and management report (Art. 253 of the Ley de Sociedades de Capital).
Therefore, generally, the deadline will be March 31st of each year, except in those cases in which the fiscal year does not coincide with the calendar year.
With almost all the tax obligations of the previous year fulfilled, given that only Form 347 will remain to be presented in February (Form 415 for taxpayers of the Canary Islands) and the Corporate Tax on July 25, the accountants, chiefs accountants, advisors, and financial directors, who have not already closed the accounts of their companies, will dedicate a very important part of their efforts to carry out the close their accounts, in order to be able to prepare them, approve them, legalize their accounting books and make the deposit in the commercial register.
For the legalization of the accounting books and the deposit of the annual accounts, it is crucial that we are well-versed on the following 7 points:
1. Attention to the deadlines
The legalization of accounting books must be carried out within a maximum of four months after the end of the fiscal year, so the deadline would be April 30.
The annual accounts must be approved by the ordinary general meeting, which must have been previously called for this purpose within the first 6 months of the fiscal year and, if appropriate, approve the management of the company, the accounts of the previous fiscal year and discuss the application of the result.
Once approved, the deposit of annual accounts will be made in the Mercantile Registry of the company’s registered office, within a period of one month from their approval. The one-month term is counted from date to date, i.e., if they are approved on June 30, they are deposited on July 30.
2. Why is necessary the legalization of accounting books?
The reason why the legalization of accounting books is so important and also mandatory is that the accounting notes cannot be altered after this process, therefore their value is probative before courts or public entities. Once the books are legalized, their custody is the responsibility of the administrator.
3. Consequences of not legalizing the accounting books or doing it after the deadline
In the event that the legalization of accounting books is requested outside the legal term, the registrar will state so in the record of the book and in the corresponding entry on the legalization files book.
However, failing to request the legalization of accounting books does not bring sanctions, so unless the books are required by an interested party in a lawsuit, not legalizing them may not have any consequences for the company. However, as it is a mercantile obligation, it is advisable to comply with the regulations and proceed with their legalization.
4. What happens if the annual accounts are not approved?
If the annual accounts are approved on the first call, they will be submitted for their deposit in the Mercantile Registry, but if they are not approved, the administrators will prepare other annual accounts with the appropriate adjustments for their approval.
In the event that there is no approval of the accounts, Art. 378.5 of the Regulations of the Mercantile Registry establishes that “if the annual accounts have not been deposited because they are not approved by the general meeting, the registration closure will not proceed, nor the responsibility of the administrators, and provided that this situation is accredited by certification of the administrative body with legitimized signatures or by means of the notarial deed of the general meeting in which the non-approval is recorded”.
In any case, the non-approval of the annual accounts puts the administrator in a difficult situation, since if they do not get the accounts approved, they should resign their position.
5. Consequences of not submitting the deposit of annual accounts in the Mercantile Registry
If one year elapses from the closing date of the fiscal year without the deposit of annual accounts being submitted, the Mercantile Registry will proceed to the provisional closure of the registration sheet, with which no document may be registered in the registry, except titles related to the cessation or resignation of administrators, managers, general directors or liquidators, the revocation or resignation of powers, the dissolution of the company, the appointment of liquidators and the entries ordered by judicial or administrative authorities (Art. 378.1 on the Regulations of the Mercantile Registry).
6. Can a company be sanctioned for not submitting the deposit of annual accounts?
Not submitting the deposit of annual accounts can be sanctioned by the Institute of Accounting and Audit of Accounts, which is dependent on the Ministry of Economy and Business.
The fines can range between 1,200 and 60,000 euros, and since there is no balance sheet, they will be calculated based on the registered share capital. If the company or group of companies has an annual turnover of more than 6,000,000 euros, the limit of the fine for each year of delay can be raised to 300,000 euros (Art. 283 LSC).
7. Implications of the administrator in case of not submitting the deposit of annual accounts
Not submitting the deposit of annual accounts supposes that the administrator has not acted with the due diligence of an ethical businessman (Art. 225 LSC) and, consequently, if some damage is caused to the company, both the company itself, the partners or a third party can claim the damages were caused by them.
If the company is in a situation of insolvency, the lack of diligence in the actions of the administrator in not submitting the accounts may mean that they have to answer for the debts of the company, given that the Bankruptcy Law establishes as an assumption of guilty bankruptcy the non-preparation of annual accounts, not submitting them to audit if required, or the failure to deposit them in the Mercantile Registry in any of the last three years prior to the declaration of bankruptcy.
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