Every company is obliged to present its Annual Accounts to the Mercantile Registry, one month from the holding of the Annual Meeting. These obligations aim to boost and provide transparency to the economic system.

Until now, the no-submission was followed by the only sanction of Companie´s registry closure, which prevented it from deposit new documents such as administrator changes, address changes, etc. Nonetheless, with the new regulation, the Spanish ICAC (Instituto de Contabilidad y Auditoría de Cuentas) has begun to sanction those companies that don’t meet the deadlines.

The sanctions are regulated by the 283. article of the Law on Corporations, ranging from 1.200 to 300.000 euros, up to raise to 300.000 euros per each year of non-compliance.
These sort of sanctions and punishes have been unusual within the context of the ICAC, so far. The unique possible consequence of the no-submission of documentation in the Mercantile Registry was the prospective derivation of administrative liability against the administrative body from partners and third parties that could have the chance to reclaim damages for this reason.

The deadline for depositing the annual accounts in the Mercantile Registry is one month from the holding of the general meeting, which usually takes place in May and June.

Article 282.1 provides that “failure by the management body to comply with the obligation to deposit, within the established period, the documents referred to in this chapter shall not result in the inscription in the Mercantile Register of any document referring to the company while the non-compliance persists “.

The annual accounts shall comprise the balance sheet, the profit and loss account, a statement of changes in equity for the year, a statement of cash flows and the report.

Method employed

According to the letters, the method used to scale the sanctions is based on the fact that the penalty is 0.5% of the total amount of the asset items, plus 0.5% of the entity’s sales figure of the last statement to the Treasury, whose original must be presented in the inspection carried out by the ICAC.

If the sanctioned company does not provide the required tax return, the penalty is quantified at 2% of the share capital according to the data in the Commercial Registry.

In the event that the tax return is provided and the penalty resulting from applying the aforementioned percentages to the sum of the items of the asset and to the sales is greater than 2% of the capital, the latter is reduced by 10%. This latest downgrade, as commented by the sources consulted in the Register of Accounting Economists, is applied in this way “we assume that to take into account that has fulfilled the duty to provide the data.” Article 378.5 of the Regulations of the Commercial Registry establishes that it is not necessary to close the Registry when the accounts have not been deposited because they were not approved by the General Meeting, provided that “this circumstance is accredited by certification of the administrative body with legitimate signatures or Authorized copy of the notarial deed of the General Meeting, stating the non-approval of the annual accounts “.

“Every six months, society must reiterate the existence of the lack of approval through certifications and minutes that are registered and published in the Official Gazette of the Mercantile Registry (Borme),” explained the sources consulted.

Less compliance

Record statistics indicate that after the apparent return to the growth path in 2010, where there was a rebound of 8.39% over the previous year (returning to pre-crisis figures) and that in 2011 these managed to remain relatively stable (â? (0.9%) compared to the previous year, as from 2012, there are slight decreases ranging from 1,7% in 2012, 1,39% in 2013 and 1,11 in 2014. In 2015, Decrease is more moderate, around 0.44% over 2014.

In absolute figures, 1,105,635 deposits were presented last year, of which 83.42%, that is, 922,310 corresponded to fiscal year 2014 and the rest to previous year.

As for the deposits of consolidated accounts of business groups presented in the Mercantile Registries, in 2015 there were accounts of 3,182 groups, representing a decrease of 8.38% over the previous year.

These deposits account for only 0.28% of the total deposited but are of particular interest for the study of the Spanish business network.