At least once a year, provided that you’ve had a regular business year without any restructurings etc. you ought to prepare and present an annual report for presenting your company’s performance to the public (or at least authorities who may make it public for a certain fee).
An annual report is a document which normally includes following sections (note that they may be presented in another order depending on how your local regulation sees the form of an annual report should be and it may include other sections as well depending on your local requirements):
- Management report giving an overview of how the company did during the period including information not necessarily present from the financial statements.
- Financial statements, namely balance sheet, income statement, statement of cash flows and statement of changes within owner’s equity.
- Notes to the financial statements and more precisely to the financial statement line items, like for an example a detailed note for Inventories showing the contents of the account in subgroups like Raw materials, Work in progress etc.
- Notes to the financial statements not tied to main financial statements, but with additional information not directly connected to financial statements, like information about contingent liabilities, assets and so on.
- Proposal on how to distribute the profit or a proposal on how to cover for the loss.
There are countries with regulators who can file for a deletion of an entity from their systems should this company fail to present its annual report repeatedly, so we suggest having this written down as something you have to do once a year and the more routine it becomes, the more basis you’ve got built up for it, the easier the process.