In 2021, approximately 60% of the companies liable to pay have chosen to keep their corporate accounts confidential. This reality worries the players of inter-company credit for whom the disclosure of corporate accounts is the key element of trust in business relationships.
By making the publication of its corporate accounts confidential, the company chooses not to expose its economic situation. Confidentiality has been facilitated by the Pacte law. The three most representative sectors of activity in the publication of corporate accounts in confidentiality:
- 58.91% of the companies in the trade, repair of motor vehicles and motorcycles sector have published confidential reports. This sector represents more than 21% of the total number of balance sheets published in 2021,
- 63.33% of the companies in the construction sector published in confidential. This sector represents more than 13.6% of the total balance sheets published in 2021,
- 63.47% of the companies in the specialized, scientific and technical activities sector have published in confidential. This sector represents more than 12.75% of all balance sheets published in 2021.
Impacts and interests of the publication of corporate accounts in confidentiality
In these times of pandemic, the publication of corporate accounts allows to consolidate the confidence in the credit that companies grant to each other. This principle of transparency has the virtue of giving partners, suppliers or customers, a visibility on the economic situation of the companies with which they will enter or continue their relationship.
Choosing confidentiality is often detrimental to the company. This position can be interpreted as a signal that the company is not doing well. Indeed, when the annual accounts of a company are not good, the latter may want to keep this information confidential, or even not to publish its accounts. In fact, activating this confidentiality (or even non-publication) option can scare off potential suppliers, partners and customers, as this voluntary lack of transparency sows doubts about the company's reliability.
However, the publication of confidential accounts can also be justified, either in a highly competitive environment or a sensitive activity, or in start-up situations where the accounts are not very readable and do not yet reflect the company's potential.
Thus, publishing in confidence must be carefully thought out because doing so can cast doubt on the solvency and sustainability of the company, and can create obstacles to its development. Moreover, one should not forget that the confidentiality of annual accounts is never total. Tax and social security authorities, banks or credit insurers, as well as company information companies such as Ellisphere can, at any time, take cognizance of the company accounts, even if they are published in confidence. Of course, this balance sheet information must remain confidential and cannot be published by these different actors.
Rules for filing annual financial statements and confidentiality
The filing of annual accounts with the clerk of the commercial court is a mandatory formality for most commercial companies, in order to guarantee the principle of transparency. This filing gives access to a lot of information about the company and its solvency. The deadline for filing the accounts at the clerk's office is the month following the holding of the ordinary general meeting. This filing requires that the corporate accounts be approved beforehand by a general meeting within six months of their closing, by the legal representative or by the auditor when authorized to do so.
In case of failure to file, the offence can be sanctioned by a fine of € 1,500. In addition, if the directors of a commercial company do not file the annual accounts within the deadline, the president of the commercial court can issue an injunction to do so within a short period of time (under penalty).
Depending on their size (micro-enterprise, small or medium-sized enterprise), some companies may decide that all or part of their accounts will not be made public by choosing the confidentiality option. This option is governed by three criteria: total balance sheet, turnover and number of employees, according to specific thresholds. However, some companies, even if they meet these thresholds, cannot benefit from this confidentiality option, such as companies that belong to a group, that are listed on a regulated market, or that are an entity that appeals to public generosity.
Table showing the rules of the annual accounts confidentiality option by category of company required to meet at least 2 of the 3 following criteria:
| Criteria | Micro-enterprises | Small businesses | Medium-sized companies |
| Balance sheet total | Less than 700 000€. | Less than € 6 million | Less than €20 million |
| Net annual sales | Less than 350 000 €. | Less than €12 million | Less than €40 million |
| Workforce | Less than 10 employees | Less than 50 employees | |
| Type of privacy | Total confidentiality | Confidentiality of the income statement | Option of simplified publication of their annual accounts, balance sheet and notes, |
| The confidentiality option does not apply in the following cases: - Small and medium-sized enterprises belonging to a group - Credit institutions and finance companies - Insurance and reinsurance companies, pension funds, mutual companies, etc. - Companies listed on a regulated market - Micro-enterprises whose activity consists in managing equity and securities (holding companies) - Entities that appeal to public generosity |
|||
What are annual accounts? What are they used for?
In France, annual accounts are part of the accounting obligations of companies. Companies must prepare annual accounts once a year and send them to the tax authorities and to the clerk of the commercial courts. The documents that make up the annual accounts are the balance sheet, the income statement and the accounting notes. They are used to analyze the evolution of a company from one year to the next. The purpose of this examination is also to assess the short-, medium- and long-term solvency of a company, and thus to measure its financial soundness.
The analysis of the balance sheet makes it possible to assess two important financial indicators of a company's financial health, namely working capital (WC) and working capital requirements (WCR).
- Negative working capital means that the company is undercapitalized,
- A WCR greater than working capital means that the operating cycle is not self-financing. The company must find external financial resources to finance this need,
- A WCR lower than the working capital means that the company is financing its operating cycle.
The income statement highlights the turnover (CA) achieved by the company, and its profitability (profit or loss) over the past year. It allows, by comparison with the previous years, to analyze the evolution of the company, in particular on their gross operating surplus (GOS), their economic profitability indicator of the intermediate management balances (IMB). It measures the level of wealth generated by the company through its operating cycle alone. If the EBITDA is positive, it means that the company is profitable through its activity.
The purpose of the accounting notes is to explain the balance sheet and the income statement by providing additional information. Depending on the type of company, there are two types of information in the notes to the accounts: mandatory information and information of significant importance. This information can explain an accounting method used by the company or the reason for a decrease in the value of an asset, for example.
Inter-company credit is based on transparency and trust between partners
Inter-company credit is a source of short-term financing essential to the survival of companies. It represents in France approximately 700 billion €, and is born at the time of commercial exchanges between the companies. It is made up of credits granted and credits received that companies grant each other in the context of their commercial relations, and corresponds to payment terms. In this context of credit between companies, trust is essential because late payments, and even more seriously unpaid payments, can cause cash flow problems and even compromise the viability of companies.
The purpose of filing and publishing corporate accounts is to inform the business partners of a company. In this sense, choosing the confidentiality option may simply be detrimental to business relationships.
