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Ensuring compliance with the obligation to file annual accounts: legal consequences and enforcement measures
According to article L 123-12 of the Commercial Code, it is compulsory for all traders to draw up annual accounts at the end of the financial year. With regard to commercial companies, the obligation to keep annual accounts is specified in Article L. 232-1 of the Commercial Code. These annual accounts generally include the balance sheet, the income statement and an appendix. These documents must be accurate, sincere and give a faithful representation of the company’s assets, financial situation and results. The annual accounts must be approved at a general meeting which must be held within 6 months of the closing date of the financial year. The business manager bears the costs of filing the annual accounts.If you need help with these formalities,
Obligation to file annual accounts: –
Failure to comply with these requirements may result in penalties as provided for by the Commercial Code. According to Article L. 611-2 II, if the managers do not file their annual accounts within the time limits set, the president of the court may order them to do so promptly, under pain of a sanction. In practice, the president of the commercial court issues an order enjoining the company’s legal representative to file the annual accounts within one month of the notification or service of the order, under pain of a fine.
The clerk of the Commercial Court then notifies the order to the legal representative of the company. If the injunction is not followed, the president of the court is competent to execute the penalty payment, thus ordering the corporate officer to pay the fine.
Compliance Enforcement: –
In a recent judgment, the Court of Cassation specified that “when the president of a commercial court, having ordered the legal representative of a legal person to file the annual accounts, under penalty, notes the non-performance and lifts the penalty, the judicial authority representing is condemned in a personal capacity…” (Court of Cassation – Commercial Chamber – May 7, 2019 – No. 17-21.047). Thus, in the event of failure to file the annual accounts, the personal liability of the corporate officer is engaged. They will be condemned individually and will have to pay the fine out of their own funds. The corporate officer will then receive a receipt from the Direction Générale des Finances Publiques, responsible for collecting the penalty payment. It is usually not possible to challenge the court order imposing the penalty.
This order must be sent by registered mail with acknowledgment of receipt. However, in practice, these decisions are not always sent in this way, and sometimes not even served by a bailiff. In such cases, our law firm in Nice can assist you in challenging recovery titles on the basis of fines imposed periodically, which often raises questions about their validity.
In conclusion, the legal obligation to file annual accounts has important consequences. Failure to comply may engage the personal liability of the corporate officer, who may be convicted and required to personally pay the fine. Our dedicated team of lawyers in Nice is available to advise and represent you in these matters, ensuring compliance with legal requirements and protecting your interests .
