You have decided to stop your entrepreneurial activities and you do not know what are the formalities to close your business?
There are different ways to close a business, whether it is a micro-enterprise or a corporation.
Free-Work tells you how to close a business.
🏳️ The different types of cessation of business activity
First of all, we will mention in this article only the voluntary cessation of activity and not cases of cessation of payment (bankruptcy).
– La dissolution liquidation
In the case of the dissolution liquidation, the entrepreneur definitively closes his business. The latter is removed from the RCS (Register of Commerce and Companies).
In legal language, the dissolution deliberate corresponds to the decision to put an end to the life of the company, while the liquidation corresponds to the definitive disappearance of the company.
There are two types of liquidation:
· the amicable liquidationdesired by the partners;
· the judicial liquidationwhich is pronounced by the commercial court, when the company is in a situation of bankruptcy.
Since January 1, 2020, the dissolution-liquidation has become tax-free. The formality of registering the minutes of dissolution with taxes is no longer necessary. So no amount is due to taxes.
If the company has employees, they are dismissed for “economic reasons”. The law strictly regulates the redundancies. The law differs depending on the size of the company.
– The dormancy of a company
The entrepreneur ceases temporarily its activity and informs the clerks. He then benefits from a favorable regime.
Namely: the duration of inactivity cannot exceed one year.
– Temporary cessation of activity
The entrepreneur may also temporarily suspend his activity, without informing the clerks.
🏳️ How to close your business?
⚪ The closure of SAS and SARL
Closing a SAS (Simplified Joint Stock Company) or a SARL (Limited Liability Company) is done in 3 steps:
1. dissolution,
2. liquidation,
3. radiation.
1- Dissolution of SAS and SARL
The manager of the company must call his partners to a general meeting and appoint a amicable liquidator. The latter may be either the manager himself, or a partner, or a person outside the company.
In the month following the decision to dissolve, the liquidator must send to the one-stop shop for business formalities:
the minutes (minutes) of the meeting which decides on the dissolution with the appointment of the liquidator,
the certificate of publication of the decision of dissolution and the act of appointment of the liquidator in a medium of legal announcements,
· the sworn statement of non-conviction and filiation (surname and first names of the father and mother) of the liquidator,
· a copy of both sides of the valid identity document of the liquidator.
The company in liquidation must then include on all letters, invoices, announcements and various publications the mention “company in liquidation” with the name of the liquidator, under pain of criminal sanctions.
2- The liquidation of the SAS and the SARL
The liquidator must then:
sell the company’s movable and immovable property,
pay creditors,
· distribute the available balance, when it exists, between the partners according to their respective contributions.
Within 3 months of the end of the financial year, the liquidator draws up the annual accounts and a written report in which he reports on the liquidation operations.
at the end of liquidation procedurethe partners are called to an ordinary general meeting by the liquidator to approve the final liquidation accounts.
THE liquidation accounts may result in a bonus or a loss of liquidation. The liquidation bonus is the sum shared between the partners after the liquidation of the company. This sharing occurs only after the payment of creditors and staff has been made. The bonus is subject to a 2.5% tax, except for SASUs (single-person simplified joint-stock companies) and EURLs (single-person limited liability companies).
The liquidator must then publish a notice of closure of the liquidation in a medium of legal announcements.
The closing of the liquidation must take place within a period of 3 years from the dissolution.
3- Deregistration of SAS and SARL
The liquidator then carries out the steps for deregistration, within a period of one month from the publication of the closure of the liquidation, at the business formalities desk.
The liquidator must submit the following documents:
the minutes of approval of the liquidation accounts certified true by the liquidator,
a copy of the final liquidation accounts,
· the certificate of publication of the notice of closure of the liquidation operations in a medium of legal announcements.
⚪ The closure of micro-enterprises
Declaration of cessation of activity
You must make a declaration of cessation of activity within 30 days following the end of the online activity on the site of the business formalities counter, which corresponds to the e-procedures portal of the INPI (National Institute of Industrial Property). This declaration leads to automatic deletion from all registers: RCS (Register of Commerce and Companies), RNE (National Register of Companies), Sirene directory (National System of Identification and Directory of Companies), etc.
Tax procedures
If you had chosen the classic tax system, you must file within 45 days your income tax return n° 2042 and your additional income tax return n° 2042-C PRO on which you enter the turnover achieved on 1 January until the termination date.
About the CFE (Corporate Property Contribution), it is due for the entire year depending on your situation on 1 January of the year. It works like council tax. However, when you receive your tax notice, you can request a reduction from your SIE (Business Tax Service) in proportion to the time of activity.
Social procedures
Within 90 days from the date of the cessation of your activity, you must declare to Urssaf (Union for the Recovery of Social Security Contributions and Family Allowances) your income for the current year and that of the previous year. They then make a regularization. In case of credit, they reimburse you and in case of debit, you must pay the difference within 30 days.
Learn more about freelance entrepreneurship:
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