Dossiers thématiques
File of the month
The minutes of general meetings for approval of the annual accounts of commercial companies
Once a year, the annual accounts for the last financial year, i.e., the balance sheet, the profit and loss statement and the notes, must be approved of the Annual General Meeting. More specifically, in most commercial companies (SA, SAS, SNC, SCS, SA, SARL etc. ), the members of the executive bodies are liable to heavy criminal and civil sanctions for management error, if they breach the obligation to submit annual accounts for approval by the partners or shareholders. For this reason, the members of these executive bodies must demonstrate that they have indeed submitted the company's annual accounts for the preceding financial year for approval by the partners or shareholders, who generally meet in Annual General Meeting, by drawing up minutes of the general meeting. The approval of the annual accounts is therefore strictly regulated. By approving these annual accounts, these partners or shareholders implicitly demonstrate that the documents concerned contain data that has been prepared on a true and sincere basis. They also presume that, as of the closing date of each financial year, these annual accounts reflect a faithful picture of the assets, the financial position and the book profit (or loss) for the companies' business. More generally, the approval of the annual accounts represent the indispensable tool to provide a minimum of information on the main accounting parameters, financial management and operations of commercial companies. They are therefore an essential decision making tool aiding the diverse interests of any interested person (directors; shareholders; investors; government authorities; creditors, such as bankers, suppliers; customers; competitors; commercial courts and potentially other judicial authorities, responsible for preventing and dealing with companies in difficulty) near or far, through access to the company's business data as well as by their financial, accounting and management position. For all these reasons, it is vital that the annual accounts must be approved in strict compliance with the statutory requirements.
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The obligation of commercial companies to prepare annual accounts
In practice, annual accounts are indispensable to provide a minimum level of information on the main accounting, financial management parameters and operations of commercial companies. The annual accounts are also intended to present, as of the closing date of each financial year, a faithful picture of the assets, the financial situation and the accounting profits of the companies' business activities. By comparing this data from these documents, from one period to the next, you can assess, at least in numerical terms, development over time. They are therefore an essential decision-making tool aiding the diverse interests of any interested party (directors; shareholders; investors; government authorities; creditors, such as bankers, suppliers; customers; competitors; commercial courts and potentially other judicial authorities, responsible for preventing and dealing with companies in difficulty) near or far through access to the company's business data as well as their financial, accounting and management situation. Taken in isolation, the annual accounts essentially contain several sets of simple indicators of accounting levels. They therefore appear to be insufficient to understand whether or not the company is managed effectively under their dynamic aspect. These documents are not capable of showing the root causes of the reported amounts and their possible developments over the short, medium or long term. This is particularly the case when it comes to re-positioning the parameters of companies' financial and accounting position in the most general context of their operations, with respect to developing their internal capacities (management effectiveness, adaptability of employees etc. ) and their external environment (customers, suppliers, investors etc. ). This is why the annual accounts must be accompanied by significant additional documents, including, primarily, the annual financial review (or management report).
Notice to pay, a credit recovery procedure
The order for payment procedure, through a legal formality and at less cost, allows a creditor of a sum of money to order the debtor to make payment, in a unilateral and rapid manner (on average, in under two months).
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