Entrepreneurs, don’t miss the deadline for your annual report, as the new regulation penalises delays

2023 - 05 - 31
Article by: Heili Haabu

The commercial register has previously not applied any significant sanctions to businesses for submitting their annual reports late. Therefore, timely reporting has not been a priority for businesses. This year, however, the rules have changed.

Faster supervision proceedings and higher fines

The Commercial Register Act, which entered into force on 1 February 2023, gives the register increased powers to penalise delays. Unlike before, the register can now start applying sanctions as soon as the deadline for submitting the report has passed. Also, the entrepreneur no longer needs to be warned before being fined, and the fine has gone up from 200 euros to 3,200 euros. In addition, the fine may be applied repeatedly until the report is submitted.

The register can fine both the company and the management board members who have the duty to submit the report. Management board members cannot rely on the excuse that the report is pending approval by shareholders. In such a case, the management board must submit a non-confirmed report to the register with a note that the report is pending approval.

Deletion from the register

If a company does not submit its annual report to the commercial register within the additional (at least three-month) deadline, the registrar may delete the company from the register. Deletion is possible on the condition that the company has no registered assets, does not participate in judicial, criminal or enforcement proceedings, and has no tax arrears. Deleting a company from the register does not exempt the entrepreneur from paying fines.

Therefore, entrepreneurs whose financial year is the calendar year must submit their reports to the commercial register by 30 June. Unlike in the past, delaying the submission of the report can result in a fine already in July, and the company can be deleted from the commercial register in October. The same applies to non-profit associations and foundations.