Companies can request that the results of their financial year not be disclosed by making a declaration of confidentiality of the annual accounts when they are filed with the Registrar. In a ruling handed down on June 6, 2023, the Paris Court of Appeal reiterated the importance of the date on which this declaration is filed.
What is the confidentiality option for annual financial statements?
The option to keep annual accounts confidential allows companies not to publish the accounts they file.
However, some companies are not eligible. These include companies belonging to a group, listed companies, credit institutions and finance companies, and insurance and reinsurance companies.
In accordance witharticle L 123-16 of the French Commercial Code, confidentiality applies to :
- full set of annual accounts for micro-businesses (companies not exceeding two of these three thresholds: 350 euro balance sheet total, 700,000 euro sales, 10 employees)
- income statement only for small companies (companies not exceeding two of these three thresholds: 6 million euros balance sheet total, 12 million euros sales, 50 employees)
When it is effective, only government departments, judicial authorities and the Banque de France have access to this information.
Declaration of confidentiality for annual financial statements: the filing date is important
The declaration of confidentiality for annual financial statements should not be filed at any time .
This was reiterated by the Paris Court of Appeal in a ruling dated June 6, 2023. In this case, a société par actions simplifiée (simplified joint-stock company) operating in the electrical contracting and installation sector had taken legal action to have its income statements for the years ended December 31, 2017, September 30, 2020 and September 30, 2021 made confidential.
The judge responsible for overseeing the trade and companies register initially rejected her request, pointing out that the declaration of confidentiality must be made when the annual accounts are filed.
The SAS appealed the decision, arguing that the law does not prohibit making the company's financial statements confidential after they have been filed and published.
However, the Paris Court of Appeal did not rule in its favor. It confirms that the confidentiality declaration must be made at the same time as the annual financial statements are filed, and that the law does not provide for any right of withdrawal.
With this ruling, the Court reiterates the importance of controlled accounting, particularly with regard to the date of filing of the declaration of confidentiality of annual accounts. This may be the case for many companies, particularly those with negative accounts, whose situation has not yet stabilized, or who do not wish to make their accounting movements accessible to competitors and business partners.