Balance Sheet & Annual Financial Statements: What Every Business Owner Should Know

What Annual Financial Statements Include

The financial statements a business prepares at the end of each financial year generally include:

• The Balance Sheet (or Statement of Financial Position)
• The Income Statement
• The Notes to the financial statements (explanatory notes)
• The Management Report of the manager or board of directors (for EPE/IKE/SA companies)

The exact content varies according to the entity’s size — very small businesses prepare simplified statements, while larger businesses add further items such as a Cash Flow Statement and Statement of Changes in Equity.

See also our guide to choosing the right business legal form and when converting a sole proprietorship to an IKE is worthwhile.

Entity Categories: Where Your Business Belongs

Businesses are classified as very small, small, medium-sized and large entities based on criteria such as turnover, total assets and number of employees. A business’s category determines both the level of detail required in its financial statements and the level of penalties for non-compliance.

NSTAX services for businesses cover the preparation and monitoring of these obligations.

Publication Deadlines

For capital companies (IKE, EPE and SA), the law requires annual financial statements to be published within three months of the end of the financial year, both with GEMI and on the company’s website where the company has one. Failure to complete both publications within the deadline constitutes a violation.

What Changes with the New GEMI Penalties

From 1 January 2026, penalties for failing to publish financial statements have increased significantly and are scaled according to business size — from several thousand euros for small entities to €100,000 for large and listed companies. The new framework makes timely and accurate preparation of financial statements more important than ever.