Electronic disclosure of balance sheets - fines threatened

Two years ago, on 1 January 2007, the "Law on Electronic Commercial Registers and Registers of Cooperatives as well as the Business Register" (EHUG of 10 November 2006, BGBl I p. 2553) came into force. Since then, the commercial registers in Germany are no longer kept in paper form, but electronically. At the same time, an electronic company register was set up at www.unternehmensregister.de. Here, all essential company data (e.g. commercial register entries, annual financial statements, announcements under company law) are centrally available to everyone for online retrieval. The EHUG has not brought any new obligations to the business community, but it is serious about enforcing publicity obligations and ensures real transparency in accounting through a modern form of data storage and publication.

The possibility of retrieving company information on the internet, introduced in 2007, has led to an improvement in transparency in business life. With the electronic business register, a central place was created where all essential company data is bundled and available for retrieval ("one stop shopping").

Online access provides inexpensive and equally easy access for any interested party from Germany and abroad to important information on companies entered in the commercial register, register of cooperatives or register of partnerships.

Since 2007, corporations, especially GmbHs, GmbH & Co. KG and stock corporations, have also had to publish their annual financial statement documents in the electronic Federal Gazette and in the Business Register. Anyone can view them there free of charge. This applied to the 2006 business year for the first time. In the meantime, the annual financial statements for the 2006 and 2007 business years can be accessed free of charge via the internet for the majority of companies in Germany subject to disclosure requirements.

Before the new regulations came into force, the companies were informed about their new obligations through a broad publicity campaign with advertisements, circulars, brochures and a specially set up hotline. After the closing date, companies have a maximum of 12 months to submit their annual financial statements. If they do not comply with their obligation in time, they will receive a penalty notice from the Federal Office of Justice. They can then submit the documents within a further six weeks and in this case only have to pay the procedural costs of 53.50 euros. Only if no disclosure has been made within the six-week grace period can an administrative fine be imposed.

For the 2006 business year, more than 907,000 companies have fulfilled their disclosure obligation so far. This means that a disclosure rate of approx. 80% has been achieved. However, only about 527,000 companies, i.e. about 46% of the companies obliged to disclose, had made the disclosure before the Federal Office of Justice began initiating administrative fine proceedings in February 2008. 68% of the companies that were then threatened with an administrative fine subsequently submitted the documents within the deadline of six weeks and thus avoided the imposition of an administrative fine.

For the 2007 business year, more than 749,000 companies have already fulfilled their disclosure obligations and thus achieved a disclosure rate of at least 68% before any administrative fine proceedings were initiated. The number of administrative fine proceedings for the 2007 business year will thus be significantly lower than for the 2006 business year. A further increase in the disclosure rate is also to be expected.

Defaulting companies can still submit their annual financial statements for the 2007 business year and thus avoid administrative fine proceedings. The annual financial statements must be submitted electronically to the Bundesanzeiger Verlag. Exceptionally, the documents to be submitted can still be submitted in paper form until 31 December 2009. However, this is more expensive for the company because of the conversion effort. The information platform introduced in 2007 is used extensively. For example, tens of thousands of accesses to published annual financial statements are made daily via http://www.ebundesanzeiger.de/ or http://www.unternehmensregister.de/.


Source: Press release of the Federal Ministry of Justice of 5.3.2009


Goldberg Rechtsanwälte -Lawyer Michael Ullrich, LL.M. (Information Law)

Specialist lawyer for information technology law

E-mail: m.ullrich@goldberg.de