Two years ago, on January 1, 2007, the “Act on Electronic Commercial and Cooperative Registers and the Company Register” (EHUG of november 10, 2006, Federal Law Gazette I p. 2553) came into force. Since then, commercial registers in Germany have been maintained electronically rather than in paper form. Concurrently, an electronic company register was established at www.unternehmensregister.de. Here, all essential company data (e.g., commercial register entries, annual financial statements, corporate announcements) are centrally available for online retrieval by anyone. The EHUG did not introduce new obligations for businesses; however, it rigorously enforces publicity requirements and ensures genuine transparency in financial reporting through a modern form of data management and publication.
The ability to retrieve company information online, introduced in 2007, has led to improved transparency in economic life. The electronic company register created a central hub where all essential company data is consolidated and available for retrieval (“one-stop shopping”).
Online access provides an inexpensive and equally straightforward way for any interested party, both domestic and international, to access crucial information about companies registered in the commercial, cooperative, or partnership registers.
Since 2007, capital companies, particularly GmbHs, GmbH & Co. KGs, and Aktiengesellschaften (stock corporations), have also been required to publish their annual financial statements in the electronic Federal Gazette and the Company Register. There, anyone can view them free of charge. This requirement first applied to the fiscal year 2006. For the majority of companies subject to disclosure requirements in Germany, annual financial statements for the fiscal years 2006 and 2007 can now be retrieved free of charge via the internet.
Prior to the new regulations coming into force, companies were initially informed about their new obligations through a broad public awareness campaign involving advertisements, circulars, brochures, and a dedicated hotline. After the balance sheet date, companies have a maximum of 12 months to submit their annual financial statements. If they fail to comply with their obligation on time, they will receive a warning of a penalty payment from the Federal Office of Justice. They can then submit the documents within a further six weeks and, in this case, only bear the procedural costs of 53.50 Euros. Only if no disclosure is made within the six-week grace period can a penalty payment be imposed.
For the fiscal year 2006, over 907,000 companies have so far complied with their publication obligation. This represents a disclosure rate of approximately 80%. However, only about 527,000 companies, or approximately 46% of those subject to disclosure, had made the publication before the Federal Office of Justice initiated penalty proceedings in February 2008. 68% of the companies subsequently threatened with a penalty payment submitted the documents within the six-week period, thereby avoiding the imposition of a penalty.
For the fiscal year 2007, over 749,000 companies have already fulfilled their publication obligation, achieving a disclosure rate of at least 68% even before any penalty proceedings were initiated. Consequently, the number of penalty proceedings for the fiscal year 2007 will be significantly lower than for the fiscal year 2006. Furthermore, a rising disclosure rate is expected.
Delinquent companies can still submit their annual financial statements for the fiscal year 2007 and thus avoid penalty proceedings. The annual financial statements must be submitted electronically to Bundesanzeiger Verlag. Exceptionally, the documents to be submitted can still be filed in paper form until December 31, 2009. However, due to the conversion effort, this option is more expensive for the company. The information platform introduced in 2007 is being extensively utilized. Tens of thousands of daily accesses to published annual financial statements occur via http://www.ebundesanzeiger.de/ or http://www.unternehmensregister.de/.
Source: Press release of the Federal Ministry of Justice dated March 5, 2009
Goldberg Attorneys-at-Law - Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Attorney for Information Technology Law
E-mail: m.ullrich@goldberg.de
