2018 Review and Financial Statement Plan 2019

September is a time of homecoming from holiday and the beginning of next year’s budgeting, but in any case, we should not forget to finish all legislative obligations associated with fiscal year 2018. So ask yourself one more time if:

• The General Meeting approved the financial statements for the year 2018. If so, great! This obligation must be met within 6 months of the end of the reporting period. In the case of negative equity, directors should also consider the obligation of §182 of the Corporations Act: “The Director shall convene the General Meeting without undue delay after finding that the Company is threatened with bankruptcy under another legal regulation or for other serious reasons, in particular if the objective pursued by the Company is jeopardized, and shall propose to the General Meeting unless another law provides otherwise." If the directors fail to do so, they expose themselves to a breach of the duty of care of a due manager pursuant to §1411 of the Civil Code: “The foreign asset manager performs its powers and performs duties with the care of a proper manager.”
  
  
• You have submitted the financial statements for 2018 to the Collection of Deeds. You are obligated to submit the financial statements within 12 months from the end of the accounting period. Failure to do so will result in penalties of up to 3 % of your total assets under §37 of the Accounting Act.
  
  
• You have also submitted the consolidated financial statements for 2018 to the Collection of Deeds, if you have the consolidation obligation. In particular, I would like to draw your attention to the requirement of the Accounting Act if you use the exception from consolidation under §22aa. Keep in mind that even if you are not consolidating yourself, you are still obligated to publish the consolidated financial statements in the Czech language (please see the §22aa (2) c)

However, in addition to the above, you should also start planning the 2019 financial statements. In particular you should:

• Start planning the physical stock count
• Start planning the physical inventory of assets
• Ask the Company's top body to approve the statutory auditor for 2019 if your company has a statutory audit obligation (without this nomination, your company audit is considered a voluntary audit and you fail to have a statutory audit under the Accounting Act).

Please do not hesitate to contact me if you have any questions about compliance with the statutory audit and accounting requirements.