Estonia might remove companies that miss reporting deadlines from Business Register
Nearly 67,000 Estonian companies have yet to file their annual reports, but officials say those that are only a few months late are not at immediate risk of being removed from the Business Register.
The deadline for filing annual reports was June 30. All companies, large and small, as well as foundations and nonprofit organizations, are required to file a report every year. Companies that had no economic activity must also file a report.
As of Tuesday, nearly 67,000 companies had failed to file their annual reports, accounting for 24 percent of those required to do so.
The Business Register is administered by the registration department of Tartu County Court. According to the court, both larger and smaller companies have encountered problems. Larger organizations may have difficulties with audits, while smaller ones simply forget or wait for a warning, Tartu County Court spokesperson Siim Saavik said.
Business owners often tell the court that they did not receive a warning or that the court never sent one to the organization. "In the digital world, there is a record of such actions. The warning was indeed sent, but amid the hectic pace of life, it went unnoticed. Organizations should check whether their contact information is up to date and whether they are able to receive notifications," Saavik said.
Three years ago, at the beginning of 2023, a law took effect giving the registrar greater powers to bring late filers into compliance. For example, late filers can be fined repeatedly, with fines of up to €3,200.
Risk of being struck from the register
The law allows companies that have failed to file their annual reports to be removed from the Business Register three months after the filing deadline. That three-month period expires October 1.
Justice and Digital Affairs Minister Liisa Pakosta explained that this does not mean all companies that have failed to file their reports will be removed from the register on October 1. Tartu County Court also confirmed that companies whose reports are only a couple of months overdue are not at risk of being removed. Companies whose reports have been overdue for longer and that have previously received a warning of removal may face being struck from the register.
Pakosta stressed that companies cannot be removed if they have outstanding debts to individuals or the Tax and Customs Board or if they are involved in ongoing court proceedings.
Pakosta said the state has made several changes aimed at improving compliance with reporting requirements.
"There have been several changes, so there isn't really a clear timeline we can lay out. By now, the approach is one that places more responsibility on the market itself. If an annual report has not been filed, the state has the right to impose sanctions, but it is not required to do so. For example, it can issue a fine or remove a legal entity from the register. But again, it is not required to do so," Pakosta said.
Pakosta said companies that fail to file their reports make themselves appear unreliable, meaning it is also in their own interests to meet the deadlines.
"Filing a report late actually affects a company's ability to operate in the market or in society. That's certainly the case for a potential partner deciding whether to buy something from the company or enter into a contract with it. If its annual report isn't available, that's a major risk. The purpose of making annual reports public is precisely so that market participants know who they should do business with and who they shouldn't," Pakosta added.
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Editor: Marcus Turovski
