ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Suren Sloyan, HAP
6. Corporate Reporting and Other Disclosures 6.1 Financial Reporting Companies have to adhere to specific financial reporting and disclosure obligations to ensure transparency and compliance with national regulations. These obligations encompass the preparation and submission of various financial statements, adherence to auditing requirements and timely tax filings. Annual Financial Statements All entities must prepare annual financial state - ments in line with the Armenian Law on Account - ing and Financial Reporting. The standard components of these statements include: • balance sheet; • income statement; • statement of changes in equity; • cash flow statement; and • notes on financial statements. These statements should reflect the financial position of the company as of December 31 of the reporting year. Companies have to sub - mit their annual financial statements to the tax inspectorate. Audit Requirements Audits are mandatory for certain categories of entities, including OJSCs, banks and other financial institutions. The criteria for mandatory audits include the fol - lowing. • Public interest organisations and large organi - sations:
Beneficial Ownership Disclosure Obligations The Law “On Combating Money Laundering and Terrorism Financing” defines a beneficial owner as a natural person who: • directly or indirectly holds 20% or more of the voting shares or has 20% or more participa - tion in the authorised capital of a legal entity; • exercises real (factual) control over the legal entity through other means; and • performs general or current management of the organisation when no individual meets these criteria. All commercial organisations registered in Arme - nia, except for LLCs with only natural person participants have to submit declarations of their beneficial owners. Declarations must be submit - ted electronically to the State Register of Legal Entities within 40 days of the organisation’s reg - istration. Any changes in beneficial ownership information must be declared immediately upon acknowledgment by the organisation and no later than 40 days after the change. Failure to comply with these disclosure obli - gations can result in administrative penalties, including warnings or fines. Deliberate conceal - ment or provision of false information may lead to criminal liability. Penalties include deprivation of certain rights or imprisonment. These regulations underscore Armenia’s com - mitment to enhancing corporate transparency and aligning with international standards in com - bating money laundering and terrorism financ - ing.
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