All limited liability companies and branches must, after their financial year end, file the annual report of their company with the relevant authority. To a degree, we could consider this the most essential filing for your entity after its establishment, as akin to a heartbeat it confirms to the authorities that your company is in good working order.
The deadlines vary between each country, but the average is 6 months after the financial year closes. Whether you have a limited liability company or a branch, you must file your annual report in time, or risk facing some hefty consequences. These consequences range from fines to the possible forced liquidation of your entity.
Branch
While both types of legal entity (as well as others) must file the financial statements with the competent authority, the annual reporting obligation for a branch carries some nuances worth highlighting.
Since a branch is not an independent legal entity, but rather an extension of a foreign company, it is generally required to file the annual report of its parent company. While this may seem straightforward, complications often arise when the language of the parent company’s report does not align with local authority requirements.
Furthermore, depending on the type of the parent company, the Nordic jurisdiction of the branch, and its country of incorporation, a branch may also be required to submit a separate financial report for its own operations. It’s also worth noting that a branch may be subject to its own audit obligations.
In summation: while filing for a branch may appear simpler than for a limited company, the devil is in the details and these can quickly complicate your legal compliance if not properly addressed.
Auditor
While the annual legal compliance does require both competent accounting and legal experts, the process can be further complicated by the necessity of having an external auditor. Said auditor’s main task is to independently review the company’s financial statements and ensure they reflect a true and fair view of the business. Any company can appoint an external auditor should they wish to do so, however should a company meet the requisites as determined by each jurisdiction, it would be legally obligated to do so.
The requirements for this obligation naturally vary from country to country, but they are nevertheless rather similar:
Sweden (AB)
Audit required if 2 of 3 criteria are met for two consecutive years:
• More than 3 employees
• Balance sheet total > SEK 1.5 million
• Net revenue > SEK 3 million
Finland (Oy)
Audit required if 2 of 3 criteria are met:
• More than 3 employees
• Balance sheet total > EUR 100,000
• Turnover > EUR 200,000
Norway (AS)
Audit required if the company exceeds any of the following:
• Turnover > NOK 6 million
• Balance sheet total > NOK 23 million
• More than 10 employees
Denmark (ApS)
Audit required unless the company stays below 2 of 3 thresholds:
• Turnover < DKK 4 million
• Balance sheet total < DKK 4 million
• Fewer than 12 employees
We at Nordic GEM have extensive experience in preparing the necessary documentation, assisting our clients in proper execution of all documents, and when required coordinating with their auditors. Our team has been tried and tested and has always managed to keep our clients happy and compliant.
Should you be requiring assistance with this years filing, please do not hesitate to reach out! We would more than happy to be of assistance.
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