Filing annual reports: deadlines, fines and exclusion from the Business Register
With the latest extensive amendments to the Commercial Code and the new Commercial Register Act, the annual report deadline remains unchanged: it is still six months from the end of the fiscal year – that is, for most companies, June 30.
It should be borne in mind that the Commercial Register may, without warning, impose a fine on a legal entity for failing to submit a report on time, and that it may be imposed repeatedly, before fulfilling the obligation to submit a report.
When determining the amount of the fine for a failure to submit a timely report, the frequency of the violation, the term of the violation and other circumstances are taken into account. Fine can be assigned to the board, and if there is no board, and to shareholders or shareholders.
In addition, if the report is not submitted by the deadline, the Commercial Register may issue an automatic notice of the exclusion of the legal entity from the register, and three months after the deadline for submission of the report, the company may be removed from the register. The simplified procedure for exclusion from the registry also applies when the legal person fails to fulfil the obligation to appoint a contact person, if such a duty exists. In such a case, it is necessary that the legal entity has no unfinished judicial proceedings, enforcement proceedings and claims on the part of state authorities.
After three years from the date of exclusion from the Business Register, the legal entity can be restored by submitting the necessary documents and data (reports, decisions of the General Meeting, data on appointment of a contact person, etc.). Restoration is also possible for additional liquidation – if, for example, after the exclusion it is found that an undistributed property is assigned to a legal person.
If the general meeting of the legal entity has decided to terminate the activity, instead of the annual report it is necessary to submit the liquidation, compiled at the time of the decision on liquidation. The Act also provides for the possibility of extending the last economic year to 18 months. From the moment of the decision on liquidation begins a new business year, and if liquidation is not completed within 12 months, the legal entity is obliged to submit every year interim reports according to the accounting rules, and, upon completion of the liquidation, a final report. Failure to submit reports by a legal entity in liquidation shall be punished in the same way as in the case of an acting legal entity.
The Joint Stock Company may require the Registrar to remove himself from the Business Register if he or she has not started his or her business, and this is confirmed by all members of the Board and all shareholders. For other forms of business partnerships, the law does not provide for this possibility.
Various options for submitting an annual report to an Estonian company
The portal can submit an annual report by filling in certain forms or uploading the XBRL file to the server if the accounting software used by the company supports this function. In some cases, a PDF file can also be used during the transition period.
Completion of the annual report form
Commercial partnerships, non-profit associations and target institutions can fill in certain forms on the portal, who prepare an annual report in accordance with the accounting customs of the Republic of Estonia and whose reporting period begins on or after 1 January 2009. The entry person must select the main reports and can select additional reports, in accordance with the Accounting Act and the instructions of the Accounting Working Group (Raamatupidamise Toimkond). You should fill in all selected reporting forms in turn. The summation and verification functions assist in the compilation of the report. You can also fill out the board’s declaration and activity report. The cover sheet of the report has already been filled in advance. The portal will then compose the final report file, along with the table of contents and page numbers.
Uploading the XBRL file to the server
The advantage of uploading the XBRL file to the server is that it is created in the accounting software used by the company. Instead of manually entering data into the forms, you can upload it to the server in a ready-made form from your own computer. When uploading the XBRL file to the server, the selected forms will be filled out automatically. Once the records are uploaded to the server, corrections and additions can be made to all the forms thus completed, and a final report can be issued.
Who can report in PDF file
During the transition period, branches, IFRS users, users submitting consolidated reports, users submitting balance sheets, credit institutions, insurers, investment companies, fund managers, users can upload the report to the server in the PDF file, filing liquidation and closing reports and business partnerships, with the beginning of the period of the financial year until 01.01.2009. Their reporting forms may differ from the standard ones and therefore do not need to report on the portal. It is allowed to create a report outside the portal and upload it to the portal server in the PDF file.
How can I report through a notary
During a one-year transition period, the report can be submitted through a notary. The notary should provide the corresponding new forms and the signed report on paper or on electronic media. Then the notary will submit a report to the Commercial Register for the accountable person. For this action, a notarial fee is charged.
Within six months after the end of the financial year, each company registered in Estonia shall submit an annual report to the Commercial Register. The annual report shall be drawn up in Estonian and in the official currency of Estonia (Euro).
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