Business Accounting: Complete Legal Obligations

Introduction

The maintenance of accounting records constitutes an essential pillar of business management in France. Whether a micro-enterprise, SME, or sole trader, each structure is subject to strict accounting obligations defined by the Commercial Code, the General Accounting Plan (PCG) and the General Tax Code. These obligations are not limited to simple accounting entry: they encompass the retention of supporting documents, the maintenance of mandatory registers, the issuance of compliant invoices and the production of annual financial statements. This comprehensive guide details all applicable rules, key thresholds and best practices to legally secure your activity whilst optimising your financial management.

1. Mandatory accounting records

Article L. 123-12 of the Commercial Code requires every trader to maintain three fundamental registers: the journal, the general ledger and the inventory record (the latter abolished for financial years opened since 2016, but the inventory document remains mandatory). The journal chronologically records all transactions affecting the company's assets, whilst the general ledger breaks down these entries by account.

For micro-entrepreneurs, the regime is simplified: only a revenue book is required, supplemented by a purchase register for goods sales activities (article 50-0 of the CGI). These registers must be maintained without blanks or alterations, and may now be digitalised in accordance with the decree of 22 March 2017, provided that the authenticity, integrity and readability of the data are guaranteed throughout the entire legal retention period.

Negligence in maintaining these registers can result in rejection of accounts by the tax authorities, with serious consequences: arbitrary assessment, penalties and surcharges.

2. Invoices and supporting documents: compliance and retention

Every invoice issued must comply with the mandatory details listed in article 242 nonies A of annex II of the CGI and article L. 441-9 of the Commercial Code: identification of parties, SIREN number, VAT identification number, precise description of goods or services, VAT rate and amount, payment terms and late payment penalties.

Since the Sapin II law (law no. 2016-1691) and as part of the e-invoicing reform provided for by ordinance no. 2021-1190, French companies will progressively move towards mandatory e-invoicing via the Chorus Pro platform or partner digitalisation platforms (PDP) between 2026 and 2027.

Supporting documents (invoices, contracts, bank statements, delivery notes) must be retained for 10 years from the close of the financial year (article L. 123-22 of the Commercial Code), and 6 years for tax documents (article L. 102 B of the LPF). A missing supporting document can invalidate an accounting entry and render a deduction inadmissible.

3. Accounting entry and applicable standards

Accounting entry must comply with the General Accounting Plan (ANC regulation no. 2014-03) which defines the account nomenclature and valuation rules. SMEs exceeding two of the following three thresholds (€4M balance sheet, €8M turnover, 50 employees) must produce complete annual accounts: balance sheet, profit and loss account and notes.

Listed groups or those making a public appeal for savings apply IAS/IFRS standards in accordance with EU regulation no. 1606/2002. Although SMEs are not directly affected, those operating with international partners or seeking fundraising should familiarise themselves with them.

Entry must be recorded according to the double-entry principle, with a reliable audit trail (article L. 13-0 C of the LPF). Accounting software used must comply with the FEC format (Accounting Entries File) required in the event of a tax inspection.

4. Specific obligations according to status

Micro-enterprises benefit from ultra-simplified accounting but must invoice with the statement "VAT not applicable, art. 293 B of the CGI" below the exemption thresholds. Sole traders on the standard regime must maintain complete commercial accounts. SMEs in corporate form (SARL, SAS) must also file their annual accounts at the business court registry within a month of their approval (article L. 232-23 of the Commercial Code).