Approval of Financial Statements 2024: Deadlines and Procedures for Limited Liability Companies and Corporations

Every year, Limited Liability Companies and Corporations must submit the accounts of their administrators to their partners/shareholders for approval.

Considering that (i) the fiscal year of companies generally ends on the last day of each year and (ii) by law, companies must have their accounts approved within 4 months of the end of their fiscal year, the month of April is typically a very busy month for administrators and partners/shareholders, since the accounts must be approved by April 30th of each year.

What is the importance of the approval of the financial statements of the directors of Limited Liability Companies and Corporations?

This annual approval is crucial for transparency between the administrators and partners/shareholders of the companies, especially because the non-approval of the accounts can cause operational difficulties, restrictions in obtaining credit, hinder the attraction of investors, and prevent participation in public tenders.

Furthermore, from the administrators’ perspective, as long as the company’s accounts are approved, they are personally liable for the actions taken by the company.

Specific Rules

• Limited Liability Companies:

• Approval takes place at a meeting or assembly of partners, depending on the number of partners.

• The agenda should include:

• Approval of the administrators’ accounts and financial statements.

• Limited Liability Companies:

• Approval takes place at an Ordinary General Meeting.

• The  agenda should include:

• Approval of the administrators’ accounts and financial statements.

• Decision regarding the allocation of profits and distribution of dividends, when applicable.

It is worth noting that publicly traded companies must always publish their accounts at least 5 days prior to the Annual General Meeting and that, depending on their revenue, the publication may have to comply with specific procedures.

If you have any questions, our team can assist you in the process of preparing corporate documents and also help with publication and legal registration.