Micro-business annual account privacy statement

Which companies are required to file annual financial statements?

When closing their financial year, several categories of companies are required to file their annual financial statements and related documents with the clerk of the commercial court.

This formality enables the commercial court to take note of the financial situation of companies, and to estimate their solvency from one year to the next. Filing annual accounts also enables investors, creditors, suppliers and customers to obtain indications of a company's solidity and stability.

The following companies are required to file annual financial statements:

• Joint-stock companies, i.e. sociétés anonymes (SA), sociétés par actions simplifiées (SAS), sociétés par actions simplifiées unipersonnelles (SASU), and sociétés en commandite par actions (SCA);
• Liberal practice companies, including sociétés d'exercice libéral à forme anonyme (SELAFA), par actions simplifiées (SELAS), à responsabilité limitée (SELARL) and en commandite par actions (SELCA);
• Partnerships, in particular general partnerships (SNC), unless one of the partners is a natural person, and limited partnerships;
• Limited liability companies, whether they have at least 2 partners like SARLs or a single partner like EURLs;
• Companies headquartered abroad but with branches in France;
• Certain agricultural cooperatives.

Sole proprietorships, including micro-businesses, are not required to file their annual accounts, with the exception of sole proprietorships with limited liability, whose accounts must be filed with the same register as their declaration of assets and liabilities.

However, sole proprietorships and micro-businesses, even if not subject to this obligation, may choose to file their annual accounts and request confidentiality.

Why make an annual account confidentiality statement?

Article L232-25 of the French Commercial Code specifies that " companies meeting the definition of micro-enterprises [...] may declare that the annual accounts they file will not be made public ".

To ensure that the annual financial statements of companies are not made public, whether they are micro-businesses or companies, they must enclose a declaration of confidentiality with their annual financial statements.

For a company, keeping its accounts confidential can have a number of benefits. Firstly, annual accounts contain a great deal of key information, which a company may not want to show to its competitors. A company's annual accounts contain the following information:

• Its balance sheet, i.e. all its resources and how it uses them;
• Its income statement, which lists all the company's income and expenses, and shows its net income;
• Various accounting appendices, including a table of payables and receivables and the due dates of any debts.

So it's understandable that a company would choose to keep this information confidential, and not expose it to anyone who might have access to it, from customers and suppliers to banks and competitors.

Asking for confidentiality of annual accounts also enables you to retain greater negotiating power with customers and suppliers, and avoid worrying partners in the event of negative results. What's more, the accounts of some young, fast-growing companies do not yet reflect their full potential, which could wrongly discourage potential partners.

What are the criteria for filing an annual account confidentiality statement?

The confidentiality option is subject to thresholds in terms of balance sheet, sales and number of employees.

To be able to attach a confidentiality statement to their annual accounts, microenterprises must meet at least 2 of the following criteria:

• Less than 10 employees
• Net sales under 700,000 euros
• A balance sheet of less than 350,000 euros

For small companies, confidentiality applies only to the income statement. Balance sheet assets and liabilities remain public in all cases. To benefit from this partial confidentiality, they must meet at least 2 of the following criteria:

• Less than 50 employees
• Net sales of less than 12 million euros
• A balance sheet of less than 6 million euros

Finally, in the case of medium-sized companies, we can't really speak of confidentiality, but rather of simplified presentation of the annual accounts, balance sheet and notes. To achieve this, 2 of the following criteria must be met:

• Less than 250 employees
• Net sales under €40 million
• Balance sheet under €20 million

Please note: some companies, regardless of their size and results, are not allowed to file a declaration of confidentiality for their annual financial statements. These companies are

• Credit and financing institutions
• Small and medium-sized companies belonging to a group
• Companies listed on a regulated market
• Insurance companies, mutuals and pension funds
• Microenterprises managing securities and equity investments

The declaration of confidentiality for annual accounts contains different information depending on whether it is filed by a micro, small or medium-sized enterprise.

The pre-filled template for micro-businesses must be completed with the name or corporate name of the legal entity, the company registration number, the identity and capacity of the signing legal representative, the year-end date, the place and date on which the declaration is completed, and the signature of the company director.

Download a sample declaration of confidentiality of annual accounts for micro-businesses

False declaration of annual account confidentiality is punishable by fine and imprisonment.