Self-business closure: who to inform?
You have to notify the CFE (Centre de Formalités des Entreprises), which will be responsible for informing the tax authorities.
Download the P2-P4 form, fill it out, and send it to the CFE by registered letter with acknowledgment of receipt to keep track of your shipment.
For a good cash managementcheck that you have settled your debts and obtained payment of invoices issued since the start of your activity.
Out of politeness, you can then send a letter to your various contacts to inform them of the cessation of your activity.
What are the tax consequences?
Closing your sole proprietorship does not result in any particular tax payment. You should know that :
- social security contributions and, if there was an option, the final payment of income tax (IR), will be due on the basis of your last declared turnover;
- you do not pay any balance of social contributions or IR from the moment you cease your activity, even during the calendar year.
If you sell certain goods used for your activity (machine tool, photocopier…) and that this sale generates a profit, you can be taxed on the added value generated. Specifically :
- if the property has been held for more than 2 years, the profit is taxed at the rate of 16% (raised to 28.1% with additional social charges);
- if the property is less than 2 years old, the profit is taxed like a classic profit. The profit will be added to the last declared turnover.
Note: if you have been in business for more than 5 years, these capital gains are tax exempt.
Our tips:
Take the time to think things over before stopping everything: you only get out of the plan if you do not achieve any turnover for 36 consecutive months. But beware, if you do not strike out, you become an individual entrepreneur under common law and are liable for minimum social security contributions, even in the absence of turnover.