Limited liability companies of any size doing business in the EU must draw up and keep annual accounts and financial statements, which must be filed with the relevant national business register.
Listed companies
Listed companies - whose securities are traded on a regulated market - must prepare their consolidated financial statements in accordance with a single set of international standards called International Financial Reporting Standards (IFRS).
These standards are developed by an independent accounting body, the International Accounting Standards Board (IASB) and then adopted by the EU.
Other companies with limited liability
As a general rule, non-listed companies do not have to follow International Financial Reporting Standards (IFRS). However, most EU countries allow the use of IFRS for the consolidated accounts of these entities. In addition, some EU countries allow or require the use of IFRS for individual financial statements of some non-listed companies: find here an overview of accounting options per EU country.
Although accounting rules differ depending on the size of your company, all financial statements must include at least the following:
- the balance sheets
- the profit and loss account
- explanatory notes
SMEs are subject to a simplified reporting regime; micro-businesses may follow a separate extra-light regime depending on the EU country where they are based.
Find out if you can benefit from simplified rules
Check here if your company can benefit from the simplified or the extra-light reporting regime.
How many people do you employ?
How big is your balance sheet?
How big is your annual turnover?
You run a micro-business.
If you chose to create a company to run your business, you may be able to follow a separate extra-light regime depending on the EU country where your company is established.
Check with an accountant or another qualified advisor which reporting structure is best suited to your business.
Warning
Warning: certain options or exchange rates may influence the result.
Depending on the EU country where your company is established, the extra-simple rules for micro-companies may vary, and feature one or all of the following:
- Reduced information in the accounting notes
- Simplified publication of your accounts, which may only need to be sent to one national authority - such as the tax authority - who will publish them on your behalf
- Simplified layout for the balance sheet and profit and loss statement
- No obligation to assess year-end accruals and prepayments, except for costs of raw materials and consumables, staff, value adjustments and tax
You run a small business.
Your business is subject to a simplified reporting regime.
Check with an accountant or another qualified advisor which reporting structure is best suited to your business.
Warning
Warning: certain options or exchange rates may influence the result.
Some EU countries may require your company to appoint a statutory auditor and to publish a management report annually.
You run a medium-sized or large business.
Your business is subject to a simplified reporting regime.
Check with an accountant or another qualified advisor which reporting structure is best suited to your business.
Warning
Warning: certain options or exchange rates may influence the result.
Comprehensive information must be provided in the accounting notes. Statutory audit and management reports are mandatory.
Self-employed and unlimited liability companies
If you are self-employed, or if you run an unlimited liability company, such as a sole-proprietorship or a general partnership, your business is not regulated by EU rules.
In these cases, you should check the national rules with the authorities in the EU country where your business is established.