In today's article from the Compliance series, as every year, due to the approaching deadline for approval of annual reports of entities registered in the National Court Register whose tax year coincides with the calendar year, we would like to remind you about the reporting obligations incumbent on companies, and also connect this issue with the issue of liability related to company law, with the responsibility for proper bookkeeping.
Pursuant to the Accounting Act, a financial report must be prepared as of the closing date of the accounts. For entities registered in the National Court Register (KRS) whose tax year coincides with the calendar year, the deadline for preparing and signing the report is the end of the first quarter of the year, i.e., March 31st of the current year. This report must be approved by resolution by June 30th and filed with the KRS by July 15th.
The obligation to prepare reports stems from the Accounting Act. Financial documents are intended not only for internal purposes but are also submitted to the National Court Register and tax authorities. Thanks to the Ministry of Justice portal, all interested parties have access to these reports. A company's annual financial reports are a source of information regarding its financial condition.
All companies registered in the National Court Register (KRS) are required to file financial reports. The exceptions are partners in general partnerships of individuals and professional partnerships whose net revenues for the previous fiscal year do not exceed the equivalent of EUR 2,000,000 or which do not maintain accounting records. Such companies must submit a declaration of exemption from the obligation to prepare and file an annual financial report, which must be filed within six months of the end of the fiscal year.
For a financial report to be complete, in accordance with the provisions of the Act, it must be signed by all persons responsible for bookkeeping and by the entity's manager. However, certain simplifications have been in effect since January 2022. Pursuant to Article 52, paragraph 2b, "If an entity is managed by a multi-person body, the financial statements may be signed by at least one person from that body, after the remaining members of that body have submitted declarations that the financial statements meet the requirements of the Accounting Act or have refused to submit such declarations."
Such statements should be attached to the report for a given year.
The financial report must then be approved and sent to the appropriate court register.
Pursuant to Article 53 of the Accounting Act, an entity's annual financial statements must be approved by an approving body no later than six months from the balance sheet date. This will most often be June 30 (for companies with the same financial and calendar years). Approval of the statements must be in writing to ensure their validity.
The consequences of failing to comply with financial reporting obligations are severe, and can include fines or even imprisonment. Responsibility for these obligations rests not only with members of the management board but also with members of supervisory boards or other oversight bodies.
By law, failure to comply with financial reporting obligations has serious consequences, both in terms of delays in preparation and failure to submit the report to the appropriate place. Pursuant to Article 77, Section 2 of the Accounting Act, failure to prepare financial statements or activity reports, or their incorrect disclosure, is punishable by a fine or imprisonment for up to two years, or both. Furthermore, pursuant to Article 79 of the Accounting Act, penalties or restrictions apply to those who fail to comply with regulations concerning, among other things, the audit of financial reports by a certified auditor, the disclosure of documents, or the filing of reports in the appropriate register.
Failure to comply with these obligations is also subject to sanctions under the Commercial Companies Code, for example, a fine of up to PLN 20,000 for members of the company's management board who fail to convene a shareholders' meeting. Additionally, in the event of delay in submitting the required documents, the registry court may impose a fine, and in the event of continued failure, liquidation proceedings may be initiated. The Fiscal Penal Code also provides penalties for those who fail to timely submit the required financial report or audit report to the tax authority. It is worth emphasizing that reporting obligations apply not only to members of the management board but also to members of supervisory boards or other supervisory bodies, who are responsible for ensuring that all reports meet the requirements of the Accounting Act. In the event of damage resulting from failure to meet these obligations, members of the supervisory board and the management board are jointly liable to the company.
If you have any questions regarding the above or other matters relating to the corporate obligations of companies, please contact our Law Firm directly – we will be happy to answer all your questions.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 15, 2024
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