Commercial Books
Explanation
The law requires every person, whether natural or legal, who has the capacity of a merchant to keep commercial books. These books can be kept manually or through a secure digital application whose characteristics match standards specified by a decree. Keeping books digitally has become mandatory two years after the issuance of the amended law.
The required documents include the journal (livre-journal) and the general ledger (grand livre). The merchant records their financial operations in the journal day by day as a minimum. If the nature of the work prevents daily recording, the results can be recorded monthly, provided that all documents allowing for a day-by-day audit are kept. As for the general ledger, it is dedicated to opening and tracking accounts.
The merchant has the obligation (l'obligation) to conduct an annual inventory (inventaire annuel) of all the elements of their enterprise. They must close all accounts in order to prepare the balance sheet (bilan) and the income statement (compte de résultat). The documents related to this inventory must also be organized and kept.
Mandatory commercial books are subject to strict formal conditions. They must be organized by date. The law prohibits leaving any blank space or gap in them. It also prohibits marginal additions, interlineations, or erasures.
If the merchant chooses to keep their books manually, they must be numbered. It is required that they be initialed and signed by the president of the court of first instance in the cities where it convenes. Finally, the merchant is required to keep their books for ten years after they are closed.
Official legal articles
replace · 1968-05-09: Open the official text
amend · 1968-05-09: Open the official text
extend · 1977-06-30: Open the official text
replace · 2019-04-01: Open the official text
replace · 2019-04-01: Open the official text
Think deeper
How does the law balance facilitating the work of a merchant who cannot record their operations daily with ensuring strict oversight of them?
Flashcards
Who is legally obligated to keep commercial books?
Every natural or legal person who has the capacity of a merchant (Article 16).
What are the commercial books that the law explicitly requires a merchant to keep?
The journal and the general ledger (Article 16).
When may a merchant record the results of their financial operations monthly in the journal?
If the nature of the work prevents daily recording, provided that all documents enabling a day-by-day audit are kept.
What are the formal prohibitions when recording information in commercial books?
Blank spaces, gaps, marginal additions, interlineations, and erasures are prohibited.
Who is the competent authority to sign manually kept commercial books?
The president of the court of first instance in the cities where this court convenes.
What is the mandatory legal period for keeping commercial books?
Ten years after they are closed.
When does keeping commercial books via a digital application become mandatory according to the latest legal amendment?
It becomes mandatory two years after the date of issuance of the amending law (Article 16).
Practice questions
Which of the following persons is subject to the obligation of keeping commercial books?
The law requires every natural or legal person who has the capacity of a merchant to keep commercial books (Article 16).
What is the minimum requirement for recording financial operations in the journal in normal cases?
Financial operations must be recorded in the journal day by day as a minimum. Monthly recording is not allowed unless the nature of the work prevents it (Article 16).
What is the purpose set by law for closing all commercial accounts annually?
The law requires the merchant to close all accounts in order to prepare the balance sheet and the income statement (Article 16).
Which of the following acts is considered legal when organizing mandatory commercial books?
Books must be organized by date. The law explicitly prohibits blank spaces, gaps, marginal additions, interlineations, and erasures (Article 17).
When does the ten-year period for keeping commercial books begin?
The merchant must keep the commercial books for a period of ten years starting from the date they are closed (Article 19).
Case problems
A merchant keeps a journal manually. They record their operations by date, but sometimes leave empty lines between one day and another to be able to add any operation they might forget later. Also, they did not present the book to any official authority for numbering or signing. Does their action comply with the law?
Model answer
The merchant's action violates the law in two respects.
First, leaving empty lines violates the law which requires organizing books without blank spaces, gaps, or interlineations (Article 17).
Second, since the book is kept manually, the merchant violates the law requiring numbering manual books and having them signed by the president of the court of first instance (Article 18).
Self-grading rubric
A commercial company has a nature of work that prevents it from recording its financial operations day by day. Therefore, it decided to record the results of the operations monthly in its digital journal. After recording the results each month, the company destroys the daily invoices and receipts to save space. After five years had passed since the closing of some books, it destroyed them. Evaluate the legality of these actions.
Model answer
Recording operations monthly is permitted by law because the nature of the company's work prevents daily recording (Article 16).
However, destroying the daily invoices and receipts violates the law requiring the retention of all documents that enable a daily audit (Article 16).
As for destroying the books five years after they are closed, this violates the law requiring the merchant to keep the books for ten years (Article 19).