What are the mandatory books for a commercial company?

In other articles of this blog we have talked about the obligatory commercial books for a company: the Minutes Book and the Partners’ Register Book. However, these are not the only book obligations that commercial companies have to comply with. In addition to the mercantile books, it is necessary for them to have a series of accounting and tax books.

Compulsory Accounting Books

The accounting books are used so that a company or a self-employed person can keep an orderly accounting that allows them to follow chronologically all their mercantile and administrative activities. They can be obligatory or voluntary. The obligatory books, in which we are going to stop next, are the Diary Book and the Book of Inventory and Annual Accounts. On the other hand, the voluntary books are the General Ledger and other auxiliary books, such as the Cash Book, the Book of Warehouse Entries and Exits, the Bank Book or the Auxiliary Book of Maturities.

Journal

All transactions related to the economic activity are recorded in the journal. This record must be kept on a daily or chronological basis. The recording of these transactions must be done in an accounting format and nomenclature. This requires a certain degree of accounting knowledge to keep it and also to interpret it.

The journal is prepared for each fiscal year, which usually coincides with the calendar year.
It begins with a record of the initial situation of the company (opening entry), records the operations of the year, and finally closes with a record of the final situation of the year (closing entry).

Inventory and Annual Accounts Book

The purpose of this is to keep a record of the evolution of the company’s situation. First, a record is made of the initial situation. Afterwards, the evolution is registered in determined periods of time. These periods can never exceed three months.
The evolution is carried out by means of balance sheets, the final inventory of the company and, in addition, a set of accounting reports called “Annual Accounts”.

The Annual Accounts include the following accounting reports:

• BalanceSheet: report on the company’s assets and liabilities.
• Profit and Loss Statement: report on income, expenses and final result.
• Statement of changes in equity: report on changes in equity.
• AnnualReport: explanation and detail of the previous ones.
• Statement of cash flows (only for some companies).

In addition to these obligatory books, we have to talk about the General Ledger. This is necessary for the company’s accounting to comply with both the Commercial Code and the General Accounting Plan. Although this book is not obligatory to legalize it, since it gathers the same information that the daily book but in different format, if that it is considered necessary to have it.

Mandatory Tax Books

These books are mandatory for the companies that have to declare the Value Added Tax (VAT). In these books the economic actions of the company throughout the financial year will be registered. When the time comes to file the tax, it must be done taking into account what is stipulated in these books. The obligatory tax books are: Book of invoices issued, Book of invoices received, Book of investment goods, Book of intra-community operations (if any).

What is the legalization of the obligatory books?

All the minutes of the meetings of the collegiate bodies of the mercantile companies must be reflected in electronic support. This obligation also applies if there is only one partner and one administrator. When it comes to legalize this record of the minutes, we have to take into account that, since 2013, this is done telematically.
Therefore, the minute books must be presented for their legalization in this format, and within four months following the closing of the corporate year.

In each fiscal year, the minutes of the preceding fiscal year must be legalized. This book may be a single book for the minutes of all the company’s collegiate bodies, or also a book for each of the collegiate bodies.
The opening and closing dates of the fiscal year must be recorded in each of these books.

When are the accounting books prepared, legalized and deposited?

The legislation establishes specific deadlines for the preparation, legalization and deposit of the obligatory accounting books:

Preparation of accounting books: there is a deadline of three months after the close of the fiscal year for the closing of the accounting and the preparation of the accounting books.
As for most of the companies the accounting year coincides with the calendar year, the closing of the accounting year would be December 31, and the deadline for the preparation of books would be March 30 of the following year.

Legalization of official books: up to four months from the close of the accounting year (April 30 in the case of a calendar year).
If it is presented after this date, the expression “out of term” will appear, but it does not entail any penalty.

Deposit of the Annual Accounts: up to one month from their approval at the Ordinary General Meeting of Shareholders.
This Meeting must be held within six months of the end of the financial year, so, in order to make the deadline shorter, the deposit can be made up to July 30 for the financial years that coincide with the calendar year.

Outsource your accounting with Vasalto

At Vasalto, we have been helping companies with a comprehensive service for more than 30 years. We offer both payroll outsourcing services and advice on your accounting. During these years we have worked hand in hand with a large number of clients who are leaders in their respective sectors, which gives us a great deal of experience in the sector.

We are present in several countries, with headquarters in Madrid, Barcelona, Porto and Bordeaux, and we have clients all over the world, as well as collaborators in more than fifty countries. Moreover, Vasalto is a purely technological company. We believe in putting technology at the service of talent.
That is why we have a series of proprietary computer systems that allow us to manage more than 35,000 payrolls every month and automate most of our clients’ accounting procedures.

Thanks to Valanza, Vasalto’s legal office, we also have a team of lawyers specialised in the areas of commercial, civil, labour and administrative law, among others.
We count on them to provide the best legal assistance possible, always working towards comprehensive service.

If you are interested in learning more about payroll outsourcing, at Vasalto we will be happy to assist you. Contact us to get to know us and see how we can help your company.