A Need to print Annual Report?

Is there a legal obligation to produce a paper copy of your Annual Report?

There is still a lot of confusion about what format is legally required for stock listed companies to publish their Annual Report in. I took this as an opportunity to research some regulations in main online reporting markets. I see this as an ongoing post and would love to add more findings coming in through my readers! So please go ahead and post your comments correcting my findings or/and adding requirements in different markets.

The Netherlands

Act on the Supervision of Financial reporting [Wet toezicht financiële verslaggeving] (Wtfv) from 31 December 2006.

Companies have to submit their annual reports and annual accounts to the Authority for the Financial Markets (AFM) within eights days of the annual accounts being adopted. Companies can submit the data as a hard copy or in digital form.

http://www.afm.nl/en/professionals/afm-voor/effectenuitgevende-ondernemingen/financiele-verslaggeving.aspx

Conclusion

No obligation to produce or send out printed Annual Reports in the Netherlands.

United Kingdom

The distribution of Annual Reports is governed by the Companies Act 2006. Every company must send a copy of its annual Report and Accounts to all members (Clause 423).

A company is permitted to send the Annual Report by electronic means if the member does not opt-in to receive a paper copy, and they must be given the opportunity to opt-in by being sent an appropriate form. This is normally done when a member becomes a shareholder and can be done at any later date in addition—if there is no response then the member is assumed to have consented to electronic delivery.

http://www.sharesoc.org/annual_reports.html
http://www.legislation.gov.uk/ukpga/2006/46/part/15/chapter/7

Conclusion

For me it looks like large UK companies have to produce a printed copy as there will always be some shareholders demanding to receive a paper copy.

Germany

According to the Financial Supervisory Authority (BaFin) there is no regulation on the format how the Annual Report has to be made public. They explicitly state, that this equally can be digital.

(links points to a webpage in german) http://www.bafin.de

Conclusion

No need to print nor send out an Annual Report in Germany.

USA

By law, any corporation that holds an annual meeting for stockholders or security holders is required to issue an annual report. Regulations set down by the Securities and Exchange Commission (SEC) specify in detail what information the report must include about the corporation’s finances, markets, and management. The rules are strict: the SEC can levy stiff penalties if corporations fail to comply.
http://legal-dictionary.thefreedictionary.com/Annual+Report

SEC states need for EDGAR filing no force to print:
Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. These reports are available to the public through the SEC’s EDGAR database.
http://www.sec.gov/about/laws.shtml

Conclusion

I don’t see a legal obligation to print an Annual Report for companies (listed) in the USA.

Companies Articles

Many large, stock listed companies defined their obligation to produce and send out a printed Annual Reports in their Companies Articles. These need to be checked and changed if considering to stop printing Annual Reports.

Other aspects

Beside the legal aspects, here is an intersting discussion launched by Mikael Wegmüller in the Corporate Communication group on LinkedIn
http://www.reportwatch.net/report-essentials/the-printed-annual-report-obsolete-or-not/28/

Ah, and of course there is no regulation for how a printed Annual Report has to be layed out. Some companies – as an extreme – might just send out a print off from their annual report website?

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