When to submit annual accounts: What is the deadline?
Submission of annual accounts: A comprehensive guide for Danish companies
Submitting an annual report is a critical part of running a business in Denmark. It is not only a legal requirement, but also an opportunity to show the company's financial health and future prospects. This guide will help you navigate the process, understand the deadlines and avoid potential pitfalls.
Deadlines for submission of annual accounts
For most companies in Denmark, the annual accounts must be submitted no later than six months after the end of the financial year. This gives companies time to gather all the necessary information and prepare an adequate account. However, there are exceptions for certain types of companies. Listed companies and state-owned limited liability companies have a shorter deadline of four months after the end of the financial year. This shorter deadline is due to the need for quick and transparent information to investors and the public.
It is important to note that these deadlines are absolute. The Danish Business Authority sends reminders via the companies' digital mailbox approximately six weeks before the deadline expires. This gives companies one last chance to make sure everything is in place before final submission. It is therefore crucial to keep an eye on the digital mailbox and respond promptly to these reminders.
For personally owned businesses, the rules are slightly different. These companies are not required to submit an annual report. However, it can still be a good idea to prepare an internal account to keep track of the company's finances and development. If a sole proprietorship chooses to file an annual report, they will be subject to the same rules and deadlines as other types of business.
Contents of the annual accounts
An annual report is more than just numbers. It is a comprehensive report on the company's financial condition and performance over the previous year. The mandatory parts of an annual report include:
1. BALANCE: This is a snapshot of the company's assets, liabilities and equity at the end of the financial year.
2. Income statement: This part shows the company's income and expenses over the financial year, resulting in either a profit or a loss.
3. Management report: Here the management gives an overview of the company's development, special conditions and future prospects.
For smaller companies, some parts of the annual accounts may be optional. For example, detailed notes to the financial statements may be optional for small businesses. However, it may still be a good idea to include these as they provide valuable insight into the company's operations and can be useful to both internal and external stakeholders.
Larger companies and companies in specific industries may be subject to additional requirements. For example, listed companies may be required to include a more detailed statement of corporate governance or a sustainability report.
Consequences of late submission
Meeting the deadline for submitting annual accounts is not just a formality – it is a legal obligation with serious consequences for non-compliance. The penalties for late submission are designed to be both dissuasive and progressive.
For each month that the accounts are late, the fines increase. Management members may risk having to pay up to DKK 3.000 each in fines. This means that for a company with a board of five members, the total fine can quickly rise to DKK 15.000 per month.
It is important to understand that the responsibility for timely submission lies with the company's management. This includes directors, board members and others who have a management responsibility in the company. Each of these persons may be subject to individual fines.
In extreme cases, where a company does not submit the annual accounts within four weeks of the expiry of the deadline, the Danish Business Authority can take steps to forcibly dissolve the company. This is a serious consequence that effectively means that the company ceases to exist as a legal entity.
In order to avoid these serious consequences, it is crucial to have systems and processes in place that ensure the timely preparation and submission of the annual accounts. This may include setting internal deadlines that are ahead of the official deadline, having a dedicated person or team responsible for the process, and considering engaging professional help in the form of an accountant or bookkeeper.
Benefits of using a chartered accountant
While it is possible for many companies to prepare and file their own annual accounts, there can be significant benefits to engaging a chartered accountant. A 2018 study found that companies that use certified public accountants generally make fewer mistakes in their annual accounts.
Accountants bring a number of advantages to the table:
1. Expertise: Accountants are specialists in accounting and auditing. They keep up to date with the latest changes in legislation and accounting standards.
2. Troubleshooting: With their experience and training, accountants are able to identify and correct errors that others might overlook.
3. Counseling: In addition to preparing the financial statements themselves, accountants can provide valuable advice on financial planning and strategies to improve the financial health of the business.
4. Credibility: An account that has been reviewed and approved by an authorized accountant can provide increased credibility with banks, investors and other stakeholders.
5. Time saving: By leaving the accounting work to a professional, business owners and managers can focus their time and energy on the core business.
When choosing an accountant, it is important to find someone who has experience with companies of your type and size. It may be a good idea to talk to several accountants before making a decision. You can find contact information for local auditors on the Association of Accountants' website or through networks such as Dansk Revision.
Danish Audit and other accounting services
Companies such as Dansk Revision offer comprehensive accounting services that can be particularly valuable for small and medium-sized businesses. Their services include not only the preparation and submission of annual accounts, but also ongoing bookkeeping, VAT settlement, and strategic financial advice.
Dansk Revision is part of GGI (Geneva Group International), a global alliance of independent auditing, accounting and law firms. This international connection gives them access to a wide range of expertise, which can be particularly useful for companies with international ambitions or connections.
Services from companies such as Dansk Revision typically include:
1. Preparation of annual accounts in accordance with Danish accounting standards and legislation.
2. Advice on tax implications and optimization.
3. Assistance with budgeting and financial management.
4. Help implement and maintain internal control systems.
5. Advice on company structure and strategy.
By using such services, companies can not only ensure compliance with legal requirements, but also gain valuable insight into their financial situation and opportunities for improvement.
conclusion
Submitting correct and timely annual accounts is a critical part of running a business in Denmark. By understanding the deadlines, content requirements, and the consequences of late submission, business owners and managers can better navigate this important process. Using professional help, such as certified public accountants or services such as Dansk Revision, can lighten the burden and minimize the risk of error.
Remember that well-executed annual accounts are not only a legal obligation, but also a tool for understanding and improving your company's financial health. By taking the process seriously and seeking the right help, you can ensure that your annual accounts become a strength rather than a burden for your company.
link:
[1] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/29949287/0cde88d0-fddd-4f43-8262-5860dffdef97/paste.txt
[2] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/29949287/8575991c-eab0-44c1-b7e7-87d572b2c271/paste-2.txt
[3] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/29949287/104c09a9-5d51-40f4-943c-d56557534918/paste-3.txt
[4] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/29949287/790cdccf-8686-412b-93f6-b2f05bb624bd/paste-4.txt
