But what if a company fails to submit an annual report?

As we know, companies must submit their annual reports within 6 months after the end of the financial year. But what happens if a private limited company, public limited company, non-profit or commercial association, foundation, general partnership, or a limited partnership with at least one legal owner fails to submit their annual report to the registrar within this period of time?

This question is responded by the county court registration department. In such cases, if the annual report is not submitted within the determined period of at least the following six months, a warning is filed to the company by the registrar regarding deletion of the company from the register.

Let’s use an example to examine the situation

Companies usually set the end of the year, i.e., December 31, as the end of their financial year. Thus, the annual report must be submitted to the registrar by June 30 at the latest. Even though a penalty can also be imposed if the annual report is not submitted on time, let us presume that, in our example, this has also not proven futile. After another 6 months, i.e., in January the year after, the registrar starts issuing deletion warnings and a regulation is issued to the company stating that the report must be submitted within the next 6 months. When this deadline has also passed and the annual report still has not been submitted, a respective announcement is published in the Official Announcements. The announcement calls the creditors of the company to report their claims against the company and apply for execution of a liquidation procedure within the following six months. The period of six months commences from the date of publishing the announcement. A warning is also published along with the announcement stating that the company may be deleted from the register even without no claims from the creditors being received – without a liquidation procedure. If claims are received from the creditors, the case is handed over by the registrar to a court, which appoints a person in charge of the compulsory liquidation procedure and makes a decision over the compulsory liquidation of the company. If no such claims are received, the registrar files an inquiry to the Tax and Customs Board regarding the compulsory liquidation. If no response is received from the Tax and Customs Board (the Board responds if they object to deletion of the company), the deletion entry is executed by the assistant judge and also delivered to the company. After delivery of this deletion entry to the company, the final deletion entry is executed by the company.

All of the above mentioned procedures may also not provide a solution

Thus, putting together all of the above mentioned deadlines, it appears that the liquidation procedure may take as much as 2 years. But even this may not be the end of the issue – if the company has not submitted an annual report, but the Tax and Customs Board does not consent to the liquidation procedure, such company may (and, in practice, often does) end up figuring in the register for years and years.