Termination of activity of a business (voluntary dissolution)
Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)
Voluntary cessation of activity refers to companies who are not cessation of payments. Formalities must be carried out to dissolve the business. Fiscal and social policies are also needed.
The amicable cessation of activity is called voluntary dissolution for a business.
Decision of voluntary dissolution
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LOCK
The head of the business convenes all the partners in a general meeting to decide on the voluntary dissolution and appoint an amicable liquidator.
The amicable liquidator shall be appointed unanimously by the members.
The amicable liquidator appointed shall be either the head of the business, a partner or a person outside the business.
SARL
The manager of the business convenes all the partners in a general meeting to decide on the voluntary dissolution of the business and appoint an amicable liquidator.
The amicable liquidator is appointed by a majority of the shares +1 share.
The friendly liquidator named is either the manager business, or a partner, or a person outside the business.
SA
The head of the business convenes all the partners in a general meeting to decide on the voluntary dissolution of the business and appoint an amicable liquidator.
The amicable liquidator shall be appointed under the conditions of quorum and majority laid down for ordinary general meetings (AGO).
The amicable liquidator appointed shall be either the head of the business, a partner or a person outside the business.
Formalities for voluntary dissolution of activity
Within month which follows the decision to dissolve the business and appoint the liquidator, the liquidator must declare the voluntary dissolution to the one-stop-shop for formalities.
To make this declaration, the liquidator shall forward the following documents:
- Minutes of the meeting which decides on the dissolution with appointment of the liquidator
- Certificate of publication of the decision to dissolve and of the document appointing the liquidator in a legal listing support
- Declaration on the honor of non-conviction and parentage (surname and forenames of father and mother) of the liquidator
- Duplex copy of valid national identity card of liquidator
The business is in liquidation at the time when the dissolution was decided.
It must then indicate on all letters, invoices, announcements and other publications Business in liquidation and the name of the liquidator under penalty of criminal sanctions.
Warning
Once the business has been dissolved, the business must be liquidated and then expunged.
The amicable liquidator shall have the following tasks:
- Sell the movable property and buildings owned by the company
- Pay for creditors
- Where there is an available balance, allocate it among the members according to their respective contributions
During his term of office, the liquidator shall represent business to third parties.
If he wishes to continue the ongoing activities of the business or to initiate new ones for the purposes of liquidation, he must ask the authorization of the partners by bringing them together in a general meeting.
Within three months of the end of the financial year, the liquidator shall draw up the annual accounts and a written report in which he shall report on the winding-up operations.
FYI
the assets of the company may not be sold to the liquidator or his relatives.
Termination of the amicable liquidation
At the end of the liquidation, the members shall be summoned by the liquidator to approve the final settlement accounts.
The liquidator then proceeds with the delisting.
Summons of members to give a ruling on the final settlement accounts
At the end of the liquidation, the members shall be summoned to ordinary general meeting by the liquidator for the following actions:
- Decide on the final settlement accounts drawn up by the liquidator
- Give discharge to the liquidator (i.e. approve its management)
- To relieve him of his mandate
- Declare that the liquidation has been completed
The settlement accounts shall result in a liquidation bonus or liquidation mali.
If the liquidation accounts show a liquidation bonus, the liquidation report must be recorded with the companies Tax Office (SIE) on which the business depends.
The bonus is subject to a tax of 2.5%.
It is not taxed for one-person simplified joint stock companies (SASUs) and one-person private companies (EURLs).
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Warning
When the closing meeting may not deliberate or refuse to approve the accounts of the liquidator, the liquidator or any interested party may bring the matter before the commercial court.
In this case, the commercial court shall decide on the accounts of the liquidator and on the closure of the liquidation in place of the shareholders' meeting.
Formalities for the closure of the liquidation
Following the ordinary general meeting for the approval of the winding-up accounts, the liquidator must have a notice of the closure of the winding-up published in a legal listing support.
Closure of the liquidation must intervene within 3 years upon dissolution.
If not, the public prosecutor's office or anyone who has an interest (for example, a creditor) may apply to the court for the winding-up of the business.
The disappearance of the business is enforceable against third parties after completion of the formalities for the cancelation of the business. For example, they can no longer claim their claims.
Business removal
The liquidator shall submit a file for the cancelation of the business within 1 month of the publication of the closure of the winding-up.
Formalities for the cancelation of the business
The amicable liquidator shall remove the business from the company formalities office site.
The liquidator must file the following documents:
- Minutes of approval of the settlement accounts certified by the liquidator
- Copy of the final settlement accounts
- Certificate of publication of the notice of closure of winding-up operations in a legal listing support
The cessation of business activity requires contacts with the tax authorities and social agencies.
Tax returns
Reporting of results
The statement of profit or loss shall be drawn up by the liquidator within 60 days from the date of cessation of activity.
This date corresponds to the date of approval of the final settlement accounts drawn up by the liquidator.
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business tax business
The liquidator must make a final income statement online in EFI or EDI :
When it does not wish to transmit its data directly to the DGFIP: titleContent, the company uses the services of a third party (intermediary or provider) who has the status of EDI partner.
In EFI mode, the company makes its own statements.
income tax business
Business activity
The liquidator must make a final income statement online in EDI or EFI :
2023 Income Statement 2022 - Industrial and Commercial Profits (BIC)
When it does not wish to transmit its data directly to the DGFIP: titleContent, the company uses the services of a third party (intermediary or provider) who has the status of EDI partner.
In EFI mode, the company makes its own statements.
Handicraft activity
The liquidator must make a final income statement online in EDI or EFI :
2023 Income Statement 2022 - Industrial and Commercial Profits (BIC)
When it does not wish to transmit its data directly to the DGFIP: titleContent, the company uses the services of a third party (intermediary or provider) who has the status of EDI partner.
In EFI mode, the company makes its own statements.
Liberal activity
The liquidator must make a final income statement online in EDI or EFI :
Non-Commercial Profits (NTB) - Controlled Reporting Regime
When it does not wish to transmit its data directly to the DGFIP: titleContent, the company uses the services of a third party (intermediary or provider) who has the status of EDI partner.
In EFI mode, the company makes its own statements.
Declaration and payment of value added tax (VAT)
The liquidator must teletransmit in EDI or EFI a final VAT return.
The approach varies depending on whether the company is subject to normal real speed or at simplified real regime VAT.
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Real standard VAT arrangements
The liquidator shall transmit in EDI or EFI the VAT return form (CA3) within 30 days after cessation of activity.
Value added tax and similar charges (Annex to the CA3 declaration)
Simplified real regime
The liquidator shall transmit in EDI or EFI the annual VAT adjustment form (CA12) within 60 days after cessation of activity.
Annual VAT adjustment declaration - Simplified scheme (3517-S)
Payroll tax
If you are subject to payment of the payroll tax (TS), you must complete the annual declaration of liquidation and regularization of the TS (Form No 2502) at one of the following times:
- within 60 days of cessation of activity
- and, by 15 January of the following year
This form must be sent to the tax department in mode EDI or EFI.
Payroll tax - Annual declaration of settlement and adjustment
Territorial Economic Contribution (TEC)
It is composed of company value added tax (VAAC) and the company property tax (CFE).
Company Value Added Tax (VAE)
Only companies with more than €500,000 HT: titleContent must pay the CVAE.
- Declaration of added value and employees (form n°1330-SD-CVAE)
Declaration of added value and employees - form n°1330-CVAE-SD
- Declaration of liquidation and regularization (form n°1329-DEF)
Declaration of liquidation and regularization of CVAE - form n°1329-DEF
The obligation to declare and pay the advance payments and the balance of the CVAE is done in mode EDI or EFI.
Company Property Tax (CFE)
The CFE is due annually depending on the situation on 1er January of the year.
In the event of termination in the course of the year, the EWC remains established for the entire year.
However, when the business receives its tax assessment, it can request the companies Tax Office (SIE) by complaint reduction of its contribution in proportion to your working time.
The business can use the secure messaging available in its business area of the tax site.
FYI
if your sales or revenues do not exceed €5,000 over a 12-month period, you are exempt from the CFE.
Social Declarations
The leader must complete a registered social declaration with the payroll of the employees for the last month of activity.
The DSN device will then be automatically informed of the cessation of activity.
Nominative Social Declaration (DSN)
The leader has no further steps to take.
The Self-Employed Social Declaration (ISD) has been deleted.
The online tax return form (form #2042) includes a specific ‘social’ strand called self-employed person's tax return. It is used to calculate contributions and personal social contributions. These elements are automatically transmitted to the Urssaf.
Indeed, the annual income tax return concerning the last fiscal year is made with the tax services which now transmit the income of the manager (as self-employed) to the Urssaf.
Provisional contributions will then be adjusted on the basis of the actual income of the year concerned.
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