Everyone occasionally falls behind with a deadline, such as filing financial statements, but what happens if you fail to file them? Read on for the answer.
It is perfectly reasonable to ask this question given the importance of this document. The financial statements not only inform stakeholders of the company’s financial position, but also, in the case of sustainability reports or non-financial reporting, of the social and environmental impact generated.
In addition to representing an opportunity to strengthen the company’s reputation and strengthen relations with stakeholders, it should be remembered that filing financial statements is a legal obligation, subject to an administrative fine in the event of non-compliance.
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To understand what happens if the financial statements are not filed, it is first necessary to remember the deadlines.
Normally in companies, it is the directors who are responsible for drawing up the financial statements. Once finalised, the financial statements must be submitted to the shareholders’ meeting, in most cases, or to the supervisory board, in the case of public limited companies adopting a two-tier system, for approval within 120 days of the end of the fiscal year.Subsequently, within 30 days of the shareholders’ decision to approve the financial statements, a copy of the approved financial statements must be filed with the Companies Registry.
In addition to this time frame, which applies to most companies, there are special cases in which the deadline may vary or coincide with a specific date. For example, consortia are required to file their financial statements within two months of the end of the fiscal year, while special companies and institutions of local authorities must file by 31 May each year.
Although filing of financial statements is subject to strict deadlines, filing may be neglected due to inadvertent forgetfulness or a conscious decision.
Whatever the cause, this is always entails payment of a fine. The amount due, however, depends on the time elapsed between the statutory deadline and the actual filing date.
If the balance sheet is filed up to to one month late, the penalty is between €45.78 and €458.67. The exact amount is decided by the Chamber of Commerce based on various criteria such as the number of days overdue and the company’s legal form.
Admittedly, this is a relatively insignificant amount, however, it is still an additional cost that the company can avoid by filing its financial statements on time. It should also be noted that this concession is not applicable if the delay exceeds one month.
Delay of over a month
Missing the deadline for filing the financial statements is a mistake that can happen to anyone, but delaying by more than a month is a serious offence, which is why it is punished more severely.
The fine for those who file the financial statements more than one month late is higher than the penalty discussed above. In this case, the amount to be paid is set out in Article 2630 of the Italian Civil Code: “Anyone who, being obliged to do so by law because of the duties they hold in a company or in a consortium, fails to make, within the prescribed time limits, reports, communications or filings with the Companies Registry, or fails to provide in deeds, correspondence and in the telematic network the information prescribed by Article 2250 first, second, third and fourth paragraphs, shall be punished with a pecuniary administrative sanction ranging from €103 to €1,032.”
In both cases, the fine applies to those who are responsible for filing the financial statements: the members of the board of directors, the statutory auditor, if appointed, or the liquidator.
In general, the penalty can be paid with an F23 form and the receipt should be forwarded to the relevant Chamber of Commerce.
Failure to file financial statements has consequences not only in terms of costs and penalties, but also in terms of reputation. A delay in meeting this obligation suggests that the company is not well organised or, worse still, that it has something to hide.
The best way to avoid misunderstandings with stakeholders and to demonstrate reliability is therefore to file financial statements in a timely manner, allowing anyone with an interest in the company to freely consult them.
Consulting financial statements is customary for a variety of entities, and it can provide several benefits, such as strengthening brand awareness among employees, generating new partnerships or attracting new investments.
This is why making the financial statements available in other languages through a professional translation service is a strategic choice to maximise the benefits of timely filing of the document.
Way2Global is a translation agency based in Milan, with correspondent offices on three continents and global coverage. Financial translations are our core business and every year we translate over 200 reports of all types: financial, social, sustainability, environmental and many others.
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