The use of a (qualified) digital signature for annual financial statements - is permitted?
In the context of increasing digitalisation, the question that arises in many fields is whether or not digital signatures can be used on official documents - thus also when preparing annual financial statements. The conditions that apply for this are discussed in the following section.
Signing of annual financial statements
According to Section 245 of the Commercial Code (Handelsgesetzbuch, HGB), annual financial statements have to be signed. There is however uncertainty over whether this means solely a handwritten signature or also an electronic signature. In the specialist literature it has been explained that annual financial statements may also be signed electronically, thus the use of the so-called qualified electronic signature is permitted. However, the wording of the HGB provision does not make this completely clear.
Planned changes to the HGB within the framework of the transposition of the CSRD
An amendment to Section 245 HGB is intended to provide a remedy and clarity. The respective draft legislation for the transposition of the European Corporate Sustainability Reporting Directive (CSRD) provides for an amendment to the provision on the signing of the annual financial statements. Instead of the heading hitherto for Section 245 HGB of “Signature”, from now on, this will be overwritten with the word “Form”. Furthermore, in the future, annual financial statements will need to be prepared “in writing”.
Under Section 126 of the German Civil Code - which stipulates the written form - a handwritten signature can thus be replaced by the electronic form. If the handwritten signature is to be replaced then this has to be done by means of a so-called qualified electronic signature. The requirements for such a signature are stipulated in the Regulation on electronic identification, authentication, and trust services (eIDAS). According to this, the signature generally has to be certificate-based, uniquely assigned to the signatory and identify them.
The qualified electronic signature has to be created using electronic signature creation data, which the signatory can use with a high level of trust under their sole control; this signature has to be linked to the data signed in such a way that a subsequent change in the data can be identified. Furthermore, there is a requirement to use a qualified electronic signature creation device and one that is based on a qualified certificate.
The planned legislative amendment is intended to create legal certainty in this regard. The aforementioned legislative draft has however not yet entered into force, which is why it remains to be seen when the Directive (CSRD) will be transposed into national law, or whether the amendment to Section 245 HGB will be separated out from the legislative proposal.
Authorised signatories
According to the wording of the legislation, a business person has to sign the annual financial statements. A distinction has to be made according to the legal form:
- In the case of a partnership, all the personally liable partners have to sign the annual financial statements.
- In the case of a corporation, the annual financial statements have to be signed by all the managing directors of a GmbH [German private limited company] and all the members of the executive board of an AG [German public limited company].
- In the case of a Kapital & Co company (a partnership with a limited company as the sole general partner), the prevailing view is that all of the board members and managing directors of the corporation have to sign. However, according to a minority view, the signing of the annual financial statements by a sufficient number of managing directors of the corporation should be adequate for the required representation of the Co. company. The reason given to justify this view is that the obligation for all the managing directors to sign only applies to the corporation itself, but not to the Co. company. This minority opinion has been criticised to the effect that signing by just a certain number of managing directors has no basis in the law and that in the case of a KGaA [a partnership limited by shares] all the personally liable partners need to sign the annual financial statements, too.
Legal consequences
If on the annual financial statements the signature of an authorised signatory is missing then this would not result in the financial statements being null and void. However, a missing signature could constitute a regulatory offence that may be punished by the imposition of a fine of up to €50,000.
