Bill No. 1112 amending various provisions relating to chartered accountancy, statutory auditing and corporate accounts

Government Bill No. 1112 amending various provisions relating to chartered accountancy, statutory auditing and corporate accounts (103 articles) was received by the Parliament on 25 July 2025.

This is the second stage in the modernisation of Monaco company law following Law No. 1.573 of 8 April 2025. The aim is to "complete the reform process, paying particular attention to the effectiveness of statutory control, the protection of shareholders and the confidence of third parties. Through this initiative, the Prince's Government confirms its determination to guarantee robust, transparent company law that is adapted to contemporary governance and economic regulation issues." (Explanatory memorandum to Bill No. 1112, p. 2)

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Presentation

Bill No. 1112 focuses on modernising the profession of chartered accountant ("expert-comptable"), the functions of contribution auditors ("commissaire aux apports") and statutory auditors ("commissaire aux comptes") in public limited companies and limited partnerships with share capital, the revision of the criminal sanctions regime, the obligation to prepare and file consolidated accounts for "parent companies" with regard to public limited companies or limited partnerships with share capital that carry out commercial activities, as well as commercial companies other than public limited companies, provided that, at the end of their financial year, they exclusively or jointly control one or more legal persons or entities.

Bill No. 1112 (PL) amends:

• Law No. 408 of 20 January 1945 supplementing the Ordinance on public limited companies and limited partnerships with share capital of 5 March 1895, in particular with regard to the appointment, powers and responsibilities of auditors (Title I, Articles 1 to 52 PL)
• Law No. 1.231 of 12 July 2000 on the professions of chartered accountant and certified public accountant, as amended (Title II, Articles 53 to 79 PL)
• the Commercial Code (Title III, Articles 80 to 87 PL)
• Law No. 1.573 of 8 April 2025 on the modernisation of companies (Title IV, Articles 88 and 89 PL).

The law will come into force immediately, on the day after its publication in the Journal de Monaco, except for transitional and derogatory provisions (Title V, Articles 93 to 103 of Bill No. 1112).

For the record, the parliament has specified the next steps in the modernisation of Monaco company law (Source : https://www.conseil-national.m...): Introduction of the "Société par Actions Autorisées" (authorised share company) with share capital between that of a SARL (limited liability company) and a SAM (joint stock company), reform of bankruptcy law, dematerialisation of company securities, and complete codification of company law.

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CONTENT of Bill No. 1112 (PL)

→ Main amendments to Law No. 408 of 20 January 1945 supplementing the Order on public limited companies and limited partnerships with share capital of 5 March 1895, in particular with regard to the appointment, powers and responsibilities of auditors, as amended:

• New title of Law No. 408 due to the repeal of the Order of 5 March 1895 (article 98 of Law No. 1.573 of 8 April 2025 on the modernisation of company law): "Law No. 408 of 20 January 1945 on public limited companies and limited partnerships with share capital, in particular with regard to the appointment, powers and responsibilities of auditors, as amended". (art. 1 PL)
• Restructuring of the provisions of Law No. 408 with the insertion of headings for greater clarity (art. 2, 10, 37, 40, 41, 48 and 50 PL):
  • Section I. Contribution auditors
  • Section II. Statutory auditors
  • Section III. Accounting obligations (Subsection I. Preparation of accounts and management report; Subsection II. Approval of accounts; Subsection III. Filing of accounts)
  • Section IV. Criminal provisions
  • Section V. Final and transitional provisions
• Rules on incompatibilities applicable to contribution auditors and statutory auditors: alignment of the provisions of Law No. 408 with the changes resulting from Law No. 1.573 of 8 April 2025 on the modernisation of company law (e.g. removal of the concept of "gérant" (manager) and inclusion of references to the "conseil d'administration" (board of directors) and "dirigeants" (directors) to cover the legal representative of public limited companies (SAMs) and limited partnerships with share capital and (SCAs); new requirements to increase guarantees of independence and impartiality (prevention of conflicts of interest); this regime is extended to experts who may assist them. (art. 5 to 7, 14 to 16 PL)
• Mandatory attendance of the contributions auditor at the second general meeting provided for in Article 19 of Law No. 1.573 of 8 April 2025 (approval of contributions in kind or special benefits). (art. 8 PL)
• Obligation (rather than option) to appoint substitute auditors ("commissaires aux comptes suppléants"): to ensure continuity of audits and avoid any interruption that could be detrimental to the financial security of audited companies (in the event of incapacity, resignation, revocation of authorisation to practise or death of the statutory auditors). (art. 11 PL)
• Extension of the term of office of statutory auditors (from 3) to 6 consecutive financial years: for better monitoring of audited companies (better knowledge of the company, planning of audits, continuity of audit approach and greater consistency in the analysis of financial statements), with an economic benefit (cost rationalisation for the company: selection, appointment, familiarisation phase). (art. 12 PL)
• Enhanced transparency in the process of appointing statutory auditors: formalisation of the contractual relationship by letter or email sent to the director confirming acceptance of the assignments; failing this, the decision on the appointment of auditors shall be null and void. (art. 12 PL)
• Statutory auditors may be dismissed for misconduct in the performance of their duties (removal of serious misconduct, brought into line with Article 15 of Law No. 1.231).
• Streamlining of statutory audit requirements: by limiting the requirement to appoint two auditors to companies with a higher risk profile, particularly due to their size, activity, economic weight or the complexity of their structure. (art. 7 PL)
• Introduction of the concept of "public-interest entity" into Monegasque law: inspired by European standards (Directive 2006/43/EC of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, Regulation No. 537/2014 of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities) to enshrine the specific obligations applicable to these entities at international level (a concept already present in the methodologies implemented by accounting firms established in Monaco). The bill includes credit institutions duly authorised in Monaco as well as persons and entities whose financial securities are admitted to trading on a regulated market. The scope of the concept of "public-interest entity" may be supplemented by sovereign order (article 17 PL). Possibility for statutory auditors of public-interest entities to serve for up to 24 consecutive financial years: to meet an increased need for stability in the auditing of entities with high economic stakes. (art. 94 PL)
• Details concerning the functioning of joint statutory auditors (art. 18 PL), the rules for renewing statutory auditors depending on whether there are one or two statutory auditors, and for those working with public-interest entities (art. 19 PL), rules applicable in the event of default or irregularity in the appointment of statutory auditors. (art. 21 PL)
• Clarification that statutory auditors must be invited to all general meetings. (art. 22 PL)
• Extension of auditors' right to information: directors must provide auditors with all documents necessary for the performance of their duties, and any obstacles to this must be reported to the Public Prosecutor. (art. 23 PL)
• Removal of the procedure before the President of the Court of First Instance for setting the remuneration of the auditor(s) in the event of difficulties. (art. 32 PL)
• Appeals against orders made by the President of the Court of First Instance to appoint or replace one or more statutory auditors: may, where applicable, be subject to appeal or opposition. (art. 33 PL)
• The statutory auditors may not, for a period of five years after the expiry of their term of office with the company, perform their duties within an entity that controls or is controlled by the company for which they have performed statutory audit duties. (art. 34 PL)
• Clarification and strengthening of the liability regime for statutory auditors, who are liable to the company and third parties for the harmful consequences of any fault or negligence committed in the course of their duties. They cannot be held liable for information or disclosures made in the performance of their duties. They are not civilly liable for offences committed by directors, unless, having been aware of them, they failed to report them in their report to the ordinary general meeting. (art. 35 PL)
• Mise à jour et complétion des règles applicables à l'établissement et à l'approbation des comptes sociaux, avec la consécration de l'obligation des sociétés mères d'un groupe de sociétés qui exercent une activité commerciale d'établir et de présenter à l'assemblée générale ordinaire annuelle des comptes consolidés dès lors qu'à la date de clôture de leur exercice comptable, elles contrôlent de manière exclusive ou conjointe une ou plusieurs personnes morales entités selon les conditions définies par ordonnance souveraine, et qu'elles dépassent les seuils définis par arrêté ministériel. Cette exigence permet à Monaco de se conformer à ses engagements internationaux dans le cadre de l'Action 13 du BEPS (Base erosion and profit shifting) de l'OCDE. Update and completion of the rules applicable to the preparation and approval of company accounts, with the establishment of the obligation for parent companies of a group of companies engaged in commercial activities to prepare and present consolidated accounts to the annual general meeting when, at the end of their financial year, they exclusively or jointly control one or more legal entities under the conditions defined by sovereign ordinance, and they exceed the thresholds defined by ministerial decree. This requirement enables Monaco to comply with its international commitments under OECD BEPS (Base Erosion and Profit Shifting) Action 13. (art. 39 and 40 PL)
• Addition that the statutory auditor's certificate must include information relating to the identity of the directors, the chief executive officers of the chairman and the senior managers, as well as the auditors in office under the conditions defined by sovereign order; revision of the practical procedures for filing the certificate, to which the general report and, where applicable, the consolidated accounts must be appended: these documents must be sent to the Trade and Industry Register (RCI) Service, which is now responsible, and no longer to the Minister of State; the Director of Economic Development is now responsible for notifying the company's registered office of a formal notice to the executives to submit these documents to the RCI Service. (art. 42 et 43 PL)
• Power for the Director of Economic Development and the Attorney General to refer the matter to the President of the Court of First Instance for the purpose of appointing a representative to file the accounts. (art. 46 PL)
• Revision of criminal penalties: to ensure a fair balance between the effectiveness of auditing obligations and the constraints on businesses; company directors (in addition to administrators) would be covered by Article 40 of Law No. 408. (art. 48 PL)

→ Main amendments to Law No. 1.231 of 12 July 2000 on the professions of chartered accountant and certified public accountant, as amended::

• Abolition of the profession of chartered accountant, integrated into the profession of certified public accountant; the Law would thus be renamed "Law No. 1.321 of 12 July 2000 on the profession of chartered accountant", and all references to certified accountants would be deleted.(art. 53, 55, 57, 63, 66 à 68, 70 à 74, 80 et 85 PL)
• Redefinition of the duties of chartered accountants, distinguishing between the main duties accompanied by a prerogative to practise, those that may be performed without any particular prerogative, and ancillary duties. (art. 56 PL)
• Addition that the maximum number of natural persons who may be authorised to practise as chartered accountants in Monaco is set by sovereign order. (art. 58 PL)
• Revision and modernisation of the conditions for accessing and practising the profession of chartered accountant, both individually and as a company; including an update of the criteria relating to training, professional experience required and conditions of good repute. (art. 59 to 62 PL)
• Redefinition of the rules governing advertising relating to the profession of chartered accountant. (art. 64 PL)
• Change in the composition of the Order's council, now accompanied by a limitation on the renewal of its members' terms of office. (art. 70 PL)
• Introduction of a specific offence of misappropriation of the title of chartered accountant, with an express prohibition on practising this profession under a false identity or pseudonym. (art. 77 PL)

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