Trader's accounting obligations
Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)
The trader, whether a natural or a legal person, has to keep an accounting. It must be registered in the Commercial and businesses Register (CBN), the National companies Register (RNE: titleContent) and subject to a real taxation regime. He must respect the rules of the accounting plan. Its accounting obligations are different depending on the size and accounting regime chosen.
SME
The trader must establish a regular (in accordance with legal regulations), honest (in good faith) and faithful to the reality of the company.
The company can keep its own books. On the other hand, when it decides to entrust it to a professional, it has to go to an accountant listed in the table of the order.
Only a member of the College of Accountants may perform maintenance, verification, appraisal, supervision or adjustment of accounts on behalf of third parties.
Who shall I contact
Holding false or incorrect accounting records is punishable by a fine of €500 000 and 5 years imprisonment.
The trader, or his accountant, shall:
- Record transactions (purchases, sales, etc.) of the company's assets
- Establish billing in some cases
- Conduct an inventory, at least once a year, to physically monitor the existence and value of the assets and liabilities of the company's assets and liabilities as of the year-end date
- Prepare the annual accounts at the end of each financial year on the basis of the accounting records and the inventory (balance sheet, profit and loss account and annexe)
- Hold a bank account either in a credit institution or in a post office
- Keep, at least 10 years after year-end, all accounting entries (journal ledger, general ledger, purchase order, delivery or receipt, customer and vendor invoice, etc.)
- If it is constituted as a business, proceed annually to the annual accounts tabled on the website of the companies formalities office or at the office of the commercial or judicial court
The annual accounts (or social accounts) shall include the following documents:
- Balance which presents the assets and liabilities of the company, and shows, separately, the equity
- Result Account which brings together the proceeds (sales, interest on invested capital, etc.) and expenses (purchases, wages, taxes, etc.), and shows the profit or loss of the financial year, after deduction of depreciation and provisions
- Annexe which comments and completes the balance sheet and income statement (e.g. accounting methods used, pension amounts and pension supplements)
Mandatory entries in the Annexe vary according to the size of the company.
The accounts must appear in the following documents, in electronic or paper form:
- Log Book, which consists of a chronological record (transaction by transaction and day by day) of all transactions affecting the company's assets: purchases, sales, etc.
- General ledger which brings together all the accounts (the journal entries are carried on the general ledger and broken down according to the accounting plan).
If they are in electronic format, these documents no longer need to be numbered from the moment they are drawn up, but simply identified and dated.
Every accounting record shall specify the origin, content and imputation of each data, the references of the supporting document.
Warning
For years opened since January 2016, the inventory book that collected the inventory data is no longer required. For prior years, it must be retained for 10 years following the end of the year.
Natural or legal persons subject to the simplified effective taxation regime may adopt a simplified presentation of the annual accounts.
The simplified accounting regime consists of recording receivables and debts only at the end of the financial year.
Traders who meet 2 of the following criteria can simplify accounting: simplified balance sheet and income statement. In addition, micro-companies are not required to establish an annexe.
Micro companies | Small companies | Medium companies | |
|---|---|---|---|
Balance sheet total less than | €350 000 | €6 000 000 | €20 000 000 |
Revenue below | €700 000 | €12 000 000 | €40 000 000 |
Average number of permanent employees | 10 | 50 | 250 |
Simplification | - Simplified balance sheet and income statement - Exemption from the Annexe | Simplified balance sheet and income statement | Simplified balance sheet and income statement |
The simplified balance sheet shall include the following information:
- Fixed assets (e.g. commercial funds, computer equipment, real estate)
- Current assets (outstanding stocks, prepayments made to order, receivables on customers, etc.)
- Equity
- Advance charges and revenue
- Accruals
- Debts (borrowings, advances and prepayments on outstanding orders, suppliers)
The simplified profit and loss account must include operating expenses (taxes, salaries, etc.) and operating income (sales made, for example).
By exception, certain categories of companies do not qualify for these concessions: banking institutions, insurance and mutual companies, listed businesses and public generosity organisations, etc.
The micro-entrepreneur benefiting from the micro-company tax system must hold a lean accounting.
Companies with at least 300 employees and a minimum of €18 million
The trader must establish a regular (in accordance with legal regulations), honest (in good faith) and faithful to the reality of the company.
The company can keep its own books. On the other hand, when it decides to entrust it to a professional, it has to go to an accountant listed in the table of the order.
Only a member of the College of Accountants may perform maintenance, verification, appraisal, supervision or adjustment of accounts on behalf of third parties.
Who shall I contact
Holding false or incorrect accounting records is punishable by a fine of €500 000 and 5 years imprisonment.
The trader or his accountant must:
- Record transactions (purchases, sales, etc.) of the company's assets
- Establish billing in some cases
- Conduct an inventory, at least once a year, to physically monitor the existence and value of the assets and liabilities of the company's assets and liabilities as of the year-end date
- Prepare the annual accounts at the end of each financial year on the basis of the accounting records and the inventory (balance sheet, profit and loss account and annexe)
- Hold a bank account either in a credit institution or in a post office
- Preserveat least 10 years after year-end, all accounting entries (journal ledger, general ledger, purchase order, delivery or receipt, customer and vendor invoice, etc.)
- If it is constituted as a business, proceed annually to the annual accounts tabled on the website of the companies formalities office or at the office of the commercial or judicial court
The annual accounts (or social accounts) shall include the following documents:
- Balance which presents the assets and liabilities of the company, and shows, separately, the equity
- Result Account which brings together the proceeds (sales, interest on invested capital, etc.) and expenses (purchases, wages, taxes, etc.), and shows the profit or loss of the financial year, after deduction of depreciation and provisions
- Annexe which comments and completes the balance sheet and income statement (e.g. accounting methods used, pension amounts and pension supplements)
Mandatory entries in the Annexe vary according to the size of the company.
The accounts must appear in the following documents, in electronic or paper form:
- Log Book which consists of a chronological record (transaction by transaction and day by day) of all transactions affecting the company's assets: purchases, sales, etc.,
- General ledger which brings together all the accounts (the journal entries are carried on the general ledger and broken down according to the accounting plan).
If they are in electronic format, these documents no longer need to be numbered from the moment they are drawn up, but simply identified and dated.
Every accounting record shall specify the origin, content and imputation of each data, the references of the supporting document.
Warning
for years opened since january 2016, the inventory book that collected the inventory data is no longer required. For prior years, it must be retained for 10 years following the end of the year.
The company shall have:
- Actuable and available assets and liabilities due
- Company Gains and Losses Projected Earnings Account
- Funding table and annual balance sheet
- Projected funding plan.
Business groups (a parent company that controls more than one subsidiary) must have:
- Consolidated accounts (the accounts of all businesses are grouped as one company)
- Group management report.
The consolidated accounts include the balance sheet, the consolidated income statement and an annexe, which are inseparable.
They may be drawn up at a different date than the annual accounts of the parent business.
The management report must specify the following information:
- Situation of the group and its foreseeable development
- Significant events that occurred between the consolidation year's closing date
- Existing company Branches
- The date on which the consolidated accounts are completed
- Group research and development activities
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Speak with an advisor on Place des Entreprises- Trade Code: Articles L121-1 to L153-10General obligations
- Trade Code: Item L123-24Requirement to hold a bank account
- Trade Code: Articles L123-25 to L123-28Small business specific accounting obligations
- Trade Code: Item L232-1Management Report
- Trade Code: Articles L233-16 to L233-28Consolidated accounts
- Trade Code: Items R123-172 to R123-177Mandatory Accounting Documents
- Trade Code: Items D123-200 to R123-202Simplified Accounting Overview
- General Tax Code: Article 1743Sanctions
- Order of 28 December 2010 approving Regulation No. 2010-10 of the Accounting Standards Authority