Date and deadline for approval of annual reports in 2021

What is the deadline for approving annual accounting reports for 2021?

As a general rule, the annual accounting (financial) statements of JSCs and LLCs are approved at the annual general meeting of shareholders (clause 11, clause 1, article 48 of the Federal Law “On Joint Stock Companies” dated December 26, 1995 No. 208-FZ (hereinafter referred to as Law No. 208- Federal Law) or the next general meeting of LLC participants (clause 6, clause 2, article 33 of the Federal Law of 02/08/1998 N 14-FZ “On Limited Liability Companies” (hereinafter referred to as Law No. 14-FZ). Conduct a
meeting to approve the annual Accounting is required within the following deadlines:

• from March 1 to June 30 of the year following the reporting year - for joint-stock companies (clause 1, article 47 of Law No. 208-FZ);
• from March 1 to April 30 of the year following the reporting year - for LLC (Article 34 of Law No. 14-FZ).

But in 2021, these deadlines were extended by Federal Law No. 115-FZ dated 04/07/2020 “On amendments to certain legislative acts of the Russian Federation in terms of unifying the content of annual reports of state corporations (companies), public law companies, as well as in terms of establishing features of the regulation of corporate relations in 2021 and the suspension of the provisions of certain legislative acts of the Russian Federation.”

They found that in 2021:

• the annual general meeting of shareholders is held within the time frame determined by the board of directors (supervisory board) of the joint-stock company, but no earlier than 2 months and no later than 9 months after the end of the reporting year;
• the next general meeting of LLC participants is held no earlier than 2 months and no later than 9 months after the end of the financial year.

Therefore, the annual accounting (financial) statements for 2021 must be approved no later than September 30, 2020.

The procedure for approving annual reports in a joint-stock company

A different system for approving financial statements has been developed for joint-stock companies; it consists of several stages and is regulated by the provisions of Law No. 208-FZ of December 26, 1995 “On Joint-Stock Companies.” The deadline for approval of the balance sheet is set in the range of 2 and no later than 6 months after the end of the reporting year, i.e. from March 1 to June 30. First, the accuracy of the data in the reports is confirmed by the audit commission, then (30 days before the day of convening the meeting of shareholders) the reporting package is approved by the board of directors.

If there is no such body in the JSC, the reporting is approved by the head of the company. And only after completion of all the listed stages is a general meeting of shareholders convened. True, approval of reporting may also fall within the competence of the board of directors if such a provision is enshrined in the company’s Charter (Article of Law No. 208-FZ).

For both LLC and JSC, approval of reporting is documented in the minutes of the general meeting.

The conditions for the duration of the period for convening a meeting of shareholders were adjusted in 2021 by the above-mentioned legislative norms, i.e. the deadline for approving the balance sheet and reporting of the joint-stock company has been increased and falls on the period from March 1 to September 30.

How is the annual accounting statement approved?

Approval of the annual financial statements is documented in the minutes of the general meeting of shareholders or participants of the LLC. If there is only one participant in the LLC, the approval of the annual financial statements is formalized by the decision of the LLC participant.

Legislative requirements for the procedure for drawing up minutes of the general meeting of shareholders and participants of an LLC were approved, respectively, clause 2 of Art. 63 of Law No. 208-FZ and Art. 181.2 of the Civil Code.

The minutes of the general meeting of shareholders indicate:

• place and time of the general meeting of shareholders;
• the total number of votes possessed by shareholders - owners of voting shares of the company;
• the number of votes held by shareholders participating in the meeting;
• chairman (presidium) and secretary of the meeting;
• meeting agenda.

The minutes of the general meeting of LLC participants must indicate:

• date, time and place of the meeting;
• information about persons who took part in the meeting;
• voting results for each item on the agenda;
• information about the persons who carried out the vote count;
• information about persons who voted against the meeting’s decision and demanded that this be recorded in the minutes.

However, in addition to the above requirements, one more thing has been established - the decision of the general meeting of participants must be notarized (clause 3 of Article 67.1 of the Civil Code of the Russian Federation). This requirement applies to solutions:

• non-public joint-stock company;
• OOO.

But notarization of decisions of participants of a non-public JSC or LLC is not necessary if the charter of these organizations establishes a rule on an alternative method of certifying the decision.

For a non-public JSC, an alternative is to certify the decision by the registrar who maintains the JSC register and performs the functions of the counting commission.

For an LLC, an alternative method is:

• signing of the protocol by all participants (or part of the participants);
• or the use of technical means that make it possible to reliably establish the fact of a decision being made, for example, using a video recording of a meeting;
• or using another method that does not contradict the law.

At the same time, the very decision of the general meeting of participants of a non-public JSC or LLC, according to which an alternative method of confirmation will be applied to the decisions of the company, also requires notarization (clause 2 of the Review of judicial practice on certain issues of application of legislation on business companies (approved by the Presidium of the Supreme Courts of the Russian Federation 12/25/2019)).

This rule that an alternative method of confirmation must be notarized applies as of December 26, 2019.

If, before December 26, 2021, the organization had already decided on an alternative method of certifying the meeting’s decision, then, in the opinion of the Federal Notary Chamber, it should also be notarized (FNP letter dated January 15, 2020 No. 121/03-16-3).

Date of approval of statements in the balance sheet: what to put

Since 2021, all enterprises, except for SMEs, submit their reports to the Federal Tax Service in electronic format. The title page of the electronic version of the balance sheet contains not only a line to indicate the date of preparation of the report, but also a field “Date of approval of statements.” In this line, the company enters the date of approval, if before the reporting was submitted to the Federal Tax Service, a general meeting was held, the reporting was approved and the result was recorded.

But since legislators allow more time for approval of balance sheets and statements than for submitting reports to the Federal Tax Service (until March 31), companies often do not have time to approve the results. In 2021, the deadline for submitting accounting reports for most companies is 05/06/2020, and the deadline for approval of LLC and JSC reports, as is already known, has been extended until September 30. If the reports have not yet been approved before submission to the regulatory authority, then the “Date of balance sheet approval” field is not filled in.

And one more nuance: starting from 2021, the minutes of general meetings of an LLC with any decision made must be notarized, since now they can be declared invalid and decisions canceled. This became clear from the “Review of judicial practice on the application of legislation on business companies”, approved by the Presidium of the Supreme Court of the Russian Federation on December 25, 2019.

From the conclusions given in this document, it follows that every decision of the general meeting of the LLC, including those for which an alternative confirmation method is used, requires notarization. This condition also applies to LLCs with a single participant (clause 3 of Article 67.1 of the Civil Code of the Russian Federation). Taking into account this position of the Supreme Court, the LLC will have to notarize each decision or amend the charter in terms of the possibility of using alternative methods of confirming decisions.

What about the sole participants of JSC and LLC?

From December 26, 2021, all the considered rules on notarization apply to organizations consisting of one participant. The Federal Chamber of Notaries also agreed with this position of the Supreme Court.

Thus, the previously applied position on this issue has been changed. Let us recall that previously the FNP’s point of view was as follows: for JSCs and LLCs consisting of one participant, the provisions of Art. 67.1 of the Civil Code do not apply (clause 2.3 of the Manual for certifying by a notary the adoption by a general meeting of participants of a business company of a decision and the composition of the company participants present at its adoption, sent by letter of the Federal Tax Service of September 1, 2014 N 2405/03-16-3).

Don't forget about estimated liabilities

Companies that do not have the right to use simplified accounting methods must remember to reflect estimated liabilities in their accounting records (clause 3 of PBU 8/2010). Let us recall that an estimated obligation is an obligation, the amount or deadline for fulfillment of which is unknown, which arose with the company in accordance with the terms of concluded contracts, legal norms, etc. (clauses 4 and 5 of PBU 8/2010).

The estimated liability is reflected in account 96 “Reserves for future expenses” in correspondence with the account for expenses or assets (clause 8 of PBU 8/2010). The amount of the estimated liability is determined by the organization independently and requires documentary justification (section III of PBU 8/2010).

Example 3: “Krepysh” issues a guarantee that “Malysh” will fulfill his obligations

JSC "Krepysh" on 04/02/2016 issued to a third party an independent irrevocable guarantee (Articles 368, 371 of the Civil Code of the Russian Federation) that LLC "Malysh" will fulfill its obligations to pay for products supplied by a third party in the amount of 10 million rubles until 03/30/2017. On December 30, 2016, Malysh LLC filed a petition for bankruptcy.

According to the calculations of Krepysh JSC, after payment of funds under the guarantee, the JSC will not be able to collect this debt from Malysh LLC in bankruptcy proceedings. 12/31/2016 JSC "Krepysh" reflects the estimated liability for the issued guarantee (attachment to the letter of the Ministry of Finance of Russia dated 01/22/2016 No. 07-04-09/2355), see the entries in table. 3.

Table 3. Reflection of estimated liabilities in the accounting of JSC "Krepysh" under the guarantee issued by LLC "Malysh"

What can you do to avoid going to the notary every year?

If the charter of the LLC does not contain provisions that decisions of the general meeting of LLC participants are certified by one of the provided alternative methods, then you should:

• or make appropriate changes to the charter of the LLC;
• or gather the LLC participants and unanimously decide to establish an alternative method.

The decision to amend the statute or the decision of the general meeting of participants must be notarized. But in this case, you will no longer need to go to the notary to approve the annual accounting reports.

Previously on the topic:

New dates for annual meetings of LLCs and JSCs in 2021

We simplify accounting and reporting

In mid-2021, amendments were made to a number of PBUs (Order of the Ministry of Finance of Russia dated May 16, 2016 No. 64n). They significantly simplify accounting and reporting for legal entities that have the right to use simplified accounting methods (clause 4, article 6 of the Federal Law of December 6, 2011 No. 402-FZ). They can be applied to the whole of 2021 if appropriate changes are made to the accounting policy for accounting purposes at least in December (clause 12 of PBU 1/2008; Information message of the Ministry of Finance of Russia dated June 24, 2016 No. IS-accounting-3). Check whether these amendments were applied to the company’s accounting and reporting for 2016. Let's briefly list them:

• companies can accept purchased inventories and fixed assets for accounting at the supplier’s price (price of the contract). At the same time, all other costs directly related to the acquisition (creation) of inventories and fixed assets are written off as expenses in full in the period in which they were incurred (clause 13.1 of PBU 5/01, clause 8.1 of PBU 6/01);
• micro-enterprises (and other companies whose nature of activity does not imply the presence of significant balances of inventories) can write off the cost of inventories as expenses in full as they are acquired, without waiting for their release into production or operation (clause 13.2 of PBU 5/01);
• companies can write off as expenses inventories intended for management needs (stationery, etc.), as well as intangible assets in full amount upon acquisition (clause 13.3 of PBU 5/01, clause 3.1 of PBU 14/2007);
• companies may not create a reserve for reducing the cost of inventories (clause 25 of PBU 5/01);
• companies can accrue the annual amount of depreciation of fixed assets at a time as of December 31 of the reporting year or periodically during the reporting year for independently established periods, and for production and business equipment reflected in the fixed assets, accrue 100% depreciation at a time at the time such property is accepted for accounting (clause 19 PBU 6/01);
• companies can write off R&D expenses as expenses in full in the period such expenses are incurred (clause 14 of PBU 17/02).

The procedure for correcting errors in annual accounting depends, firstly, on when they were identified: before or after approval of the statements. Secondly, if errors are identified after the statements have been approved, it depends on whether the company is simplified and how significant the identified error is

Approval of annual financial statements of LLC sample

The decision of the sole founder of a limited liability company to approve the annual report and annual balance sheet

[place of decision] [day, month, year]

I, [last name, first name, patronymic of the only participant], being the only participant of the Society, and, guided by Art. 34 of the Federal Law “On Limited Liability Companies”, adopted the following decisions:

1. Approve the annual report for [value] year.

2. Approve the annual balance sheet for [value] year.

[Last name, first name, patronymic, personal signature of the founder]

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An approximate form of the decision of the sole founder of a limited liability company to approve the annual report and annual balance sheet

Developed: September 2010

Minutes of the general meeting of company participants on the issue of approval of annual reports and distribution of net profit

The minutes of the meeting of founders, containing the decision on the distribution of profits, are drawn up according to a standard template and signed by the secretary and chairman. The document reflects all the issues on the agenda and the results of the debate on them - the number of supporters, dissenters and abstentions.

LLC profit distribution protocol: sample 2021

Net profit is the part of the balance sheet that remains at the disposal of the enterprise after paying taxes. The amount is calculated based on accounting reports. In some cases, the calculation takes into account the company's future expenses.

The protocol reflecting the decision on the distribution of net profit must be certified by a notary.

A sample protocol may contain a decision on the distribution of profits from previous years. The regulatory authorities recognize this right of companies, but draw attention to the fact that dividends from the profits of previous years can only be distributed if these funds were not allocated to the fixed assets of the enterprise.

Protocol for approval of the annual report of LLC

The approval of the annual financial statements, as well as the distribution of the enterprise’s profits, falls within the powers of the general meeting of founders. According to Article 34 of the Federal Law “On LLC”, the protocol for approving the annual report must be drawn up between March 1 and the end of April. The specific date is indicated in the company's charter.

Please note: company members must be notified 30 days in advance of the upcoming meeting. Along with the invitation, all founders of the company must provide an annual report, the conclusion of the audit commission and auditor, and additional materials.

A well-written financial report includes the following data:

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• balance sheet;
• the size of costs and profits;
• information about the movement of finances;
• audit results;
• explanatory note.

You can download a sample of the minutes of the meeting on the issue of the annual report and distribution of net profit along with the accompanying documents - notifications, bulletins. Experienced lawyers are working on the preparation of templates, so you can rest assured that the documents comply with the norms of the current legislation of the Russian Federation.