The 2023 financial statements: file in time to avoid liability!

Dear business owners, the new year 2025 is fast approaching and with it the deadline for filing the 2023 financial statements. Be sure to do so in a timely manner to avoid (potential) liability. Should you fail to meet the December 31, 2024 deadline, be sure to file as soon as possible to minimize liability risks.

Preparation

The preparation of financial statements is the process by which the board of a company collects and records all the financial data for the past year. This involves the board identifying all income, expenses, assets and liabilities. The goal is to create a clear and organized document that shows how the company is doing financially. Make sure all board members sign the financial statements. Is a signature missing? If so, explain it in the financial statements.

The board must prepare financial statements within five months of the end of the fiscal year. This deadline can be extended by up to five months by the general meeting in special cases. Officially, therefore, the financial statements must be prepared no later than ten months after the end of the fiscal year.

Adoption and filing

The adoption of the financial statements is done at the general meeting. In this meeting, the financial statements and financial results are discussed. Shareholders can ask questions and the General Meeting must give official approval for the annual accounts to be adopted. This must be no later than 2 months after the financial statements have been prepared.

Filing means that the adopted annual accounts are officially filed with the Chamber of Commerce. This is mandatory and ensures that the financial statements are publicly available to others, such as customers, suppliers and banks. This step allows people to see how the company is doing financially.

What is the deadline?

No later than 12 months after the fiscal year ends, the financial statements must be filed with the trade register. For most legal entities, the fiscal year and calendar year run concurrently. Exceeding this deadline carries major consequences. At first glance, the fact that exceeding the deadline is considered an economic crime is particularly annoying, but in practice the liability risk in case of bankruptcy is much more far-reaching.

In bankruptcy, the trustee always looks at the filings. Are these missing or are the financial statements filed late with the Chamber of Commerce? Then this increases the chance of directors’ liability. The trustee may then assume, based on the legal presumption of evidence, that you as director are personally liable. It is then up to you to prove that another cause caused the bankruptcy, whereby the late filing was not a cause of the bankruptcy. For example, the corona debts you are still carrying, or a fire that brought your business down. In any case, this other circumstance must not be your fault!

Insignificant failure to file

Given the far-reaching consequences of not filing on time, the “sharp edges” of this rule have been taken off. If there is a delay of only a few days or for good reason, judges often rule that the delay does not automatically lead to a reversal of the burden of proof. Depending on the circumstances of the case, insignificant omission up to two weeks after the filing date can be assumed relatively easily, but after four weeks, it is not readily possible. For larger overruns of several weeks to months, extenuating circumstances may also exist. However, the longer the delay, the better the reason must be to invoke the extenuating circumstances!

Bookkeeper or accountant liable?

In practice, it sometimes happens that directors and shareholders have taken all the steps for timely filing, but the documents remain with the bookkeeper, accountant or administrator causing the deadline to lapse. If this does not result in an insignificant omission, the bookkeeper may be liable for the director’s losses.

Conclusion

The timely and accurate preparation, adoption and filing of financial statements is critical to your business. The consequences of non-compliance can be severe, especially if your company is struggling financially. Our attorneys are ready to assist you in navigating this process and ensuring that you meet all legal obligations. But even if you are already late in filing or found liable, we can assist you. Please do not hesitate to contact us for professional advice and support.