temporary-cessation-of-activity:-definition,-formalities-and-obligations

Temporary cessation of activity: definition, formalities and obligations


Temporary cessation of activity: what is it?

Definition

Temporary cessation of activity is a voluntary interruption of the activities of a business or a company for a specified period. The expression “temporary cessation of activity” is reserved for sole proprietorships. For a company, we speak of “sleep”.

Duration

A temporary cessation of activity can be requested for a full year by a sole proprietorship. If the company has a commercial activity, this temporary cessation of activity can be renewed once. A company can be put on hold for a maximum of two years.

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Temporary termination activity: advantages and disadvantages

Advantages of a temporary cessation of activity

The temporary cessation of activity of a sole proprietorship or the shutdown of a company allows all activity to be interrupted for a period decided in advance without having to close the business or to dissolve the company. It offers managers time to reflect and then decide on the strategy to adopt to develop the activities again at the end of this period or, on the contrary, to decide to definitively liquidate all of its activities.

Warning: No sleep can be carried out if the company concerned is the subject of bankruptcy proceedings.

>> To read also – Judicial redress : procedure and effects

Disadvantages of a temporary cessation of activity

During the duration of this temporary cessation of activity, or put on hold, the company still has a legal existence and legal obligations, in particular accounting, tax and social obligations continue. In addition, this decision requires compliance with certain formalities. Finally, this is a chargeable procedure since it must be the subject of a publication to inform all third parties.

Good to know: the amount of this procedure varies with the nature of the activity between 22 and 60 euros for individual companies.

Temporary cessation of activity: formalities

Request a temporary cessation of activity

Temporary cessation of activity of a sole proprietorship or sleep of a company must be requested from the corresponding Business Formalities Center (CFE) within one month before the requested date.

Declare a temporary cessation of activity

A sleep is an event in the life of a company or a company which must advertised in order to inform all stakeholders of the structure. In the month following the start of this cessation of activity, it must be declared by the CFE concerned. For a trader, this is an amending entry in the Trade and Companies Register (RCS). For the craftsman, this is an amending entry in the register of trades (RM). This procedure also results in a publication in Bodacc.

Temporary cessation of activity: obligations

Accounting obligations

Even in temporary cessation of activity, the company or the company, must continue to honor its accounting obligations, in particular the establishment of its corporate accounts at the end of each fiscal year. Companies must also continue to hold their general assembly meetings.

Exception: sole proprietorships registered with the RCS and who do not employ any employee are exempted from establishing their balance sheet and their income statement if no transaction modifies them.

Social obligations

For the manager: if he is in the general social security scheme, he is no longer liable for contributions since no remuneration will be paid to him. But if he is a TNS (Self-employed worker), he must pay social charges calculated on the minimum basis.

For employees, social contributions remain due.

Tax obligations

The VAT is no longer due. The profit tax must be declared with the mention “nil”. The CFE ( Business property contribution ) remains due for the first year.

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