Filing annual accounts with the Chamber of Commerce (update 4 May 2020)

As this is a lengthy memo, we advise you to include it here pdf-format.

The Civil Code requires organisations to publish their annual accounts each year by filing them with the Chamber of Commerce (KvK).

This version of the memorandum includes the temporary exemptions from the rules governing the preparation and filing of annual accounts, which were introduced in response to the coronavirus crisis. These exemptions are shown in italics.

Who?

The obligation to file the annual accounts is based, amongst other things, on:

• Public limited companies (NV) and private limited companies (BV);
• co-operative societies;
• mutual insurance companies;
• general partnerships (VOF) and limited partnerships (CV), in which all managing partners are foreign shareholders.
• foundations and associations that run a business and have an annual turnover of at least €6 million;
• foreign legal entities with an establishment in the Netherlands, which are also required to publish in their country of origin;

The following are exempt from the obligation to publish:

• a subsidiary for which the parent company issues a statement of liability (“403 error message”);
• pension and severance pay limited companies in the micro or small category, which are not profit-making (they must file an auditor’s report).

Deadline

The process relating to the annual accounts of a private limited company comprises the following steps:

1. format of the annual accounts;
2. submit To the shareholders;
3. determine by the shareholders;
4. file with the Chamber of Commerce.

1. Preparation of the annual accounts

Main rule: indoors 5 months At the end of the financial year, the board of the legal entity must prepare the annual accounts and submit them to the shareholders[1].

Exception: if there are special circumstances, the shareholders (the General Meeting) the board a maximum of 5 months to grant an extension for the preparation of the annual accounts. In most cases, the granting of this extension is formalised in the minutes of a General Meeting.

The annual accounts are finalised once they have been signed by all directors.

In light of the coronavirus crisis, the power to decide to defer the preparation of the annual accounts has also been temporarily granted to the board of the private limited company[2]. The board is not required to cite special circumstances in order to grant a postponement.

If the board takes this decision, the General Meeting will have no option to extend the term.

2. Submission

The annual accounts are presented to the shareholders by issuing a General Meeting at which the approval of the annual accounts is on the agenda.

3. Adoption of the annual accounts

Once the board has drawn up and submitted the annual accounts, the shareholders must approve them within 2 months approve. In most cases, the approval of the annual accounts is formalised in the minutes of a General Meeting[3].

4. Filing

The filing of the annual accounts involves submitting them to the Chamber of Commerce, with a request for them to be made public. Filing must take place within 8 days once the annual accounts have been approved at the General Meeting[4], provided that the annual accounts must in any event have been filed within 12 months after the end of the financial year[5][6].

These deadlines in the schedules, provided that the financial year coincides with the calendar year.

Schedule 1: Drawing up without delay

Diagram 2: Deferred settlement

REMEMBER: if all shareholders are also directors or supervisory directors of the company, the signing of the annual accounts also constitutes their adoption. In that case, the two-month period available to the shareholders for adopting the annual accounts is waived.

The articles of association may provide for a deviation from this rule, in which case the two-month period for the adoption of the annual accounts does apply (Schedules 1 and 2).

Table 3: All shareholders are also directors or supervisory board members; no deferral

Diagram 4: All shareholders are also directors or supervisory directors; deferral

Sanction

Failure to file the annual accounts, or failure to file them on time, may result in the following two penalties.

1. If the company goes into liquidation, it is easier for the company’s directors to be held personally liable for the legal entity’s debts (directors’ liability).[7]
2. The Tax and Customs Administration’s Economic Enforcement Agency may launch an investigation, which could lead to criminal prosecution. If an economic offence is established, fines of several thousand euros may be imposed.

Failure to publish the approved annual accounts (in a timely manner) does not constitute a manifestly improper performance of duties by the board if[8]:

• due to the postponement of a general meeting or
• due to other causes,

which are a consequence of COVID-19.

This also applies if, as a result of the virus, the annual accounts cannot be prepared or audited by the auditor.

Despite COVID-19, the company’s board is still required to comply with its accounting obligations.[9]

What?

The information that must be filed with the Chamber of Commerce depends on the size of the company. In the case of a micro-enterprise A brief balance sheet will suffice. A small business must publish an abridged balance sheet with limited notes.

Retrieved from medium-sized and large enterprises This entails an obligation to disclose a more comprehensive set of information.

Your accountant can tell you exactly which category your business falls into and what information you must and must not include in the disclosure documents.

How?

Micro-enterprises and small businesses file their annual accounts with the Chamber of Commerce electronically. This can be done via an online service on the Chamber of Commerce’s website (www.kvk.nl) or using suitable financial software.

Medium-sized and large companies submit their returns using suitable financial software (SBR).

The purpose of this note is to outline a scheme. For the sake of readability, matters have therefore been simplified. VWG is therefore not liable for the consequences of actions taken or not taken as a result of this memorandum.

[1] Article 2:210 of the Dutch Civil Code.

[2] This is laid down in the Temporary Act on COVID-19: Justice and Security. This Act will (largely) expire on 1 September 2020, but this date may be extended by two months at a time.

[3] The Temporary Act on COVID-19: Justice and Security contains provisions under which a General Meeting may be held online. We do not describe these rules in this memorandum.

[4] Article 2:394(1) of the Civil Code.

[5] Article 2:394(3) of the Dutch Civil Code.

[6] The Temporary Act on COVID-19: Justice and Security does not (for the time being) amend the rule that the annual accounts must be published no later than 12 months after the end of the financial year.

[7] Article 2:248(2) of the Dutch Civil Code.

[8] Article 22 of the Temporary Act on COVID-19: Justice and Security.

[9] Article 2:10 of the Dutch Civil Code.