Preparing and filing annual reports is a management board responsibility. At the time of this original article, the rules required every board member to sign the report.
Reports could be signed digitally or on paper and submitted through the register's reporting environment. What if all signatures could not be obtained?
The version of section 25 of the Accounting Act discussed here required board members to sign and date the report promptly after approval by the relevant body, confirming the accuracy of its information.
Practical obstacles could include serious illness, travel to a remote location or refusal to sign because a member disagreed with the report.
An earlier version of the Act permitted a written explanation where a member could not sign or refused. The version discussed in this article did not provide that option and emphasised the report's importance as a principal public source of financial information and the members' personal responsibility. The article therefore concluded that all members in office when it was completed had to sign.
The requirement had already eased compared with an earlier rule also requiring supervisory board signatures. A further amendment was being prepared to allow one board member to sign on behalf of the board after its collective approval.
Failure to file on time could, after warning, lead to fines, deletion from the register or compulsory dissolution. To avoid this, the board should cooperate with the registrar and explain obstacles and measures taken to obtain signatures.
If the obstacle could be overcome, such as recovery from illness, return from travel or resolution of disagreement, the explanation should substantiate that.
The registrar might nevertheless reject the reason. Where the obstacle could not be resolved, removal of the member might be considered. If that was not reasonably possible, for example under a shareholders' agreement, the company might seek a judgment establishing the duty to sign and ordering the declaration. A favourable judgment would replace the member's declaration otherwise expressed by a signature.
The article was published on Raamatupidaja.ee. It describes the rules and proposed changes at its original publication date.