The closure and approval of the accounts comprises the following steps:
Annual report and accounts
The management report should contain, at least, a true and clear progress account of the business, the company’s performance and its current standing, as well as a description of the main risks and uncertainties that the company faces.
The management report, the accounts, and financial statements, prepared by the board should, as a general rule, be presented and reviewed within three months of the last day of the fiscal year. They should, in addition be made available to all members at the company headquarters during business hours; starting on the day the general assembly is convened to review the referenced documents.
Annual general meeting
The general meeting must meet within three months of the close of the financial year, or within five months of the same date in the case of companies required to present consolidated accounts or applying the equity method, with the purpose of:
- Ratifying the annual report and accounts for the financial year;
- Approve the proposed appropriation of income;
- Performing a general appraisal of the company´s management and supervision and, if necessary and even if such items do not form part of the meeting´s business, removing the management from office, within the scope of its powers, or stating its vote of no-confidence in the same;
- Performing the elections under its jurisdiction.
The general assembly is waived when all members are also managers and all of then sign, without reservation, the annual report, accounts and proposed appropriation of income and handling of losses, except when the company is subject to a statutory audit of the accounts.
Registration of accounts
All duly approved account approval documents must be deposited in the Company Registry Office, thereby placing them in the public domain.
The application for registration of the accounts must be made until the 15th July.
Failure to comply with the registration of the accounts, precludes the registration of any facts about the company, except the appointment and removal from office of directors and supervision, for any reason other than the passage of time, administrative authority decisions, court actions, decisions, procedures and provisional measures, including seizure, pledge of shares or quotas or other rights over them, and other acts or measures affecting the free disposal and any other deposit registrations.
Companies that, for two consecutive years, fail to comply with the registration of accounts, are subject to an administrative procedure of dissolution and liquidation of the company.