If you are an administrator of a company that has closed the year with poor results you are interested to continue reading …

Closing the exercise, it is time to take stock. We know that the annual accounts are formulated within the first quarter of the following year but it is advisable that the managers of the companies do not wait to that moment and they already value the obtained results.

Despite the fact that, according to all indicators, the crisis has been overcome, it is certain that in more than one company the economic results are still bad. And beware, if in 2016 your company has generated losses perhaps the time has come to make decisions.

Companies with losses … red alert !:

Under commercial law, the annual accounts for 2016, which, as in most cases, are closed on 31 December, must be made by the directors of the company before 31 March 2017 and submitted for Approval to the General Meeting of Members, before June 30, 2017.

But the deadline for approval until the end of June 2017 does not mean that up to that time the administrators of the company should not make decisions.

On the other hand, if we close the year with accumulated losses, the company may be subject to dissolution, with the directors obliged to call a meeting to take action to remove this cause (for example an increase or reduction of capital) or to agree on the dissolution of the Company, with the opening of the liquidation phase.

In addition, if the insolvency situation is concurred with the dissolution case (understood as a general breach of its payment obligations), the administrator is directly obliged to request the voluntary competition of the company.

Maximum requirement for the administrator:

In these cases of insolvency or cause of dissolution, the obligation to request the call or call a meeting must be made within a maximum period of two months after the Administrator knows this situation.

And, be careful, in those cases where the losses are significant, it can be presumed that the manager knows the situation at the end of the year.

The Law penalizes the defaulting administrator …

If the administrator does not request the competition or convenes the Board within that two-month period, he may be declared personally responsible for the company’s debts.

And it will not be an excuse to avoid this responsibility that the accounts are not yet approved by the partners …

In conclusion, if the company is in a difficult situation, managers must comply with all the legal obligations. For this the company must have a correct legal advice to help you make timely decisions.