How to cancel a sole proprietorship?

If you want to cancel your individual business, certain formalities must be respected including the establishment of the final accounts of the activity validated by the partner, even if the formalities are more flexible than for a company. The striking off your individual business results at the end of your activity. Indeed, the company loses its moral personality. If the activity is exercised in its own name, it disappears. In any case, you must go through the cancellation regardless of the reasons that lead to the end of the business by hiring some efficient striking off company services Singapore.

THE FORMALITIES TO BE FILLED IN CASE OF CANCELLATION OF A SOLE PROPRIETORSHIP

To begin, you must apply for deletion from the special register for the individual limited liability company within one month before the cessation of the activity or one month after the cessation of activity.

It is necessary to publish the dissolution of the individual company in the good newspaper of legal announcements (JAL) and to request a certificate of publication.

You must complete the P4 CMB form for the cancellation of the sole proprietorship, natural person and the PEIRL CMB form for the sole proprietorship. It will be necessary to indicate the date of cessation of activity and to transmit the form to the Center of Corporate Formality (CFE).

Attention: If your sole proprietorship is in a state of cessation of payments, you must go through a bankruptcy. The state of cessation of payments is characterized when you can no longer meet your debts due to your available assets.

The Business Formalities Center will be in charge of informing the social security funds and the tax office, but you can also send letters to the tax authorities and the caisses for the closure of your accounts and to settle the amounts due…

Note: It is possible to download the forms directly on the internet. You must provide the power to authorize a third party to sign the form if you do not sign the form yourself.

Note: If the delisting request follows the death of the individual entrepreneur, natural person, it will be necessary to provide an extract of the death certificate and the power of one of the heirs.

The cancellation of the sole proprietorship removes the legal personality it had acquired during the registration stage. The sole proprietorship will no longer be able to perform any act on his behalf. She no longer has the moral personality, she no longer exists. If certain acts must be carried out after delisting, it will no longer be in the name of the company. If the activity was carried out in its own name, it disappears. No liquidation transaction is necessary.

THE DECLARATION TO THE TAX OFFICE

You must report the turnover of your individual business to the tax department within 45 days of the cessation of activity. This is the turnover of your last period of activity, that is, the profits that were not reported on your last tax return. Liberal activities have a 60-day period to report turnover. If the cancellation of the sole proprietorship results from the death of the entrepreneur, the heirs have 6 months to file the declarations.

We must hand over to the tax office:

  • a statement of benefits,
  • a summary of the income statement,
  • the statement of turnover for the last period of activity.

Long-term net capital losses incurred in the year of the cessation of business or the last ten years may be deducted from earnings in the amount of a fraction equal to the ratio of the capital gains tax rate in the long term and the normal rate of corporation tax, ie 38.40% for 2018. Capital losses may be charged to the extent of the taxable profit of the exercise of the cancellation of the sole proprietorship because there can not be a deficit result imputed to the overall income.

For the benefit, it is necessary to take into account:

  • operating profits between the end of the last taxed year and the date of cessation of activity,
  • profits whose taxation has been deferred,
  • the capital gains of fixed assets realized on the occasion of the cessation of the activity.

Profits made after the cessation of the activity must be subject to income tax in the category of BICor BNC. The cessation of the activity also results in the liquidation of the VAT balance. You must report it within 30 days of the cessation of the activity if you are on the normal, normal plan. If you benefit from the simplified scheme, you have 60 days to declare VAT after the cessation. If you stop your activity during the year, you can request a reduction in the Company Land Contribution in proportion to the activity time. For this, it is necessary to make your request by registered letter with the service of the taxes.

REPORTING TO SOCIAL ORGANIZATIONS

Normally, you do not need to apply for the cancellation of the sole proprietorship with the Social Security of the Independents or with the Social Security Agricultural for a farm because it is the CFE who transmits the information. You receive within 30 days notification of deletion telling you the situation of your account. You then have 90 days from the date of cessation of the activity to declare your income. You have to report the income from the previous year and the year of the cancellation of the sole proprietorship. The Social Security of the Independents will calculate the annual subscription as well as the contributions paid in advance during the year. You must pay the additional contributions within 30 days of sending the notice of the supplement.

Please note: If you have benefited from a deferral or an averaging of contributions, you have a period of 60 days. On the other hand, you must proceed to your retirement from the old-age insurance scheme with the Social Security of the Independents or from the old-age insurance fund for the liberal professions. A forecast contribution is therefore calculated until the last day of the quarter in which the cessation took place and will then be regularized for traders and craftsmen. In view of the different steps to take with several different organizations (CFE, tax service, social security) it may be interesting to use a professional for the cancellation of your business.

THE COST OF STRIKING OFF THE SOLE PROPRIETORSHIP

Know that if you are an individual entrepreneur, natural person, without the creation of a legal entity, the cancellation of your activity is completely free. On the other hand, if you have opened secondary schools in a jurisdiction different from that of the Register of Commerce and Companies (RCS) of the head office, you must pay a fee (about 9 €) per registered secondary school. Concerning the cancellation of a sole proprietorship with the legal personality, you have to pay about 15 € for the cancellation of the main establishment and additional fees must be added per secondary school. You must add to these costs the taxes and contributions you still have to pay. Given a large number of formalities to be completed and the different deadlines to be respected, it is recommended to be accompanied by a professional to avoid any undesirable surprises. Captain Contract is an advantageous solution since an adapted professional will be designated to follow your file and help you to carry out all the steps concerning the cancellation of your individual company.