4 reasons for the termination of the activity of a self-employed company
There are 4 main reasons for discontinuing self-employed company activity, which can be voluntary or involuntary.
volume of business
One of the main reasons for discontinuing sole proprietorship activity is related to regulations. In fact, the status of an auto-entrepreneur is tied to respect of certain limits, especially that of turnover. Thus, when your activity generates more turnover, you automatically switch positions:
- 72,600 for service and generous activities;
- 176,200 euros for commercial and housing activities.
The termination of auto-entrepreneur activity in order to exceed the auto-entrepreneur ceiling is purely administrative when you switch to the EURL arrangement, or any other position of your choice. It’s time to switch from Auto-Entrepreneur to SASU!
Ceasing your auto-entrepreneurial activity can also be a result of your reflection. And the reasons are just as varied:
- Change in activity: you want to radically change the activity and close your current micro-enterprise to create a new one or form a company;
- going to retire;
- return to a salaried position;
- Growth of your business: The legal status of a sole proprietorship may no longer suit your activity. To grow this, there may be several advantages to switching to EURL or some other form of company;
Turning off auto-entrepreneur activity is then voluntary.
Good to know: You can stop your activity for a maximum of 2 years, if you want to dedicate yourself to other projects, without losing the benefits of your self-employment status. So you have to put it to sleep.
Cessation of activity for lack of business
You declare zero turnover for 2 consecutive years? The administration then terminates your activity and then cancels it. The termination of auto-entrepreneur activity is then done in 2 steps:
- After 12 consecutive months of declaring zero turnover, the Administration assumes that you are in cessation of activity as a self-entrepreneur;
- After 24 months of zero turnover, you become permanently unregistered.
termination for financial hardship
Finally, cessation of auto-entrepreneur activity may be the solution to end financial difficulties. In fact, it’s useful to remember that when you choose to be self-employed, personal and professional heritage get confused. In fact, when business debt accumulates, you put everything you own at risk. Thus, termination for financial difficulties can quickly limit this risk and improve your financial situation.
In the event of involuntary termination of activity as a self-employed entrepreneur, Pôle Emploi may, from 2020, pay you ATI (allowance for self-employed workers) for approximately 6 months under certain conditions.
Formalities for Cessation of Activity in Self-Employment
The formalities for ending self-employment activity are relatively simple. They are made in 2 stages: the official announcement of the end of the activity and the announcement of the final turnover.
Declare the termination of self-employment activity
There are 2 options available to you: Announcement online or by mail. The termination of online auto-entrepreneur activity is carried out by a simple announcement on the autoentrepreneur.fr website in your personal space. Note, any request to terminate Self Employed Activity is final!
If you wish to announce the termination of auto-entrepreneurial activity by mail, you must send a file to the CFE (Centre de Formalités des Entreprises) or the Register of Trades. Depending on the nature of your activity, the auto-entrepreneur termination of the activity form is different:
You have one month after the effective termination of your activity to make this announcement.
Declare your last business
You should declare your turnover by the end of your financial year, even if it is zero, whatever the date of the end of self-employment activity. That’s how you’ll pay off your previous Social Security contributions and possibly final fees.
If you cease your activity during the year, you will be liable for CFE (contribution fonsier des enterprise) in proportion to the months during which you actually exercised.
Cessation of Activity in Self-Employed Online: Whom to Live With?
A little lost, no time or simply no desire to take care of the formalities to stop your self-employed business activity? Why not turn to LegalTech? These companies are experts in supporting individuals and professionals with all their legal formalities. You’ll find many online legal techniques capable of helping you end your self-employed activity, such as LegalStart.
How Much Does Self-Employment Termination Cost?
The termination of activity as an auto-entrepreneur is completely free of charge as it is a simple announcement to administer. Don’t forget, however, that you will remain liable for any final taxes and duties due during the calendar year following the termination of your activity.
In addition, if you use any LegalTech, you will also need to pay a service fee to pay. Similarly, if your company has debts, you are personally responsible for honoring them.
So, if shutting down your auto-entrepreneur activity is free on paper, in reality, you should be anticipating the latest social and tax deadline to come.
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questions to ask
What is the difference between radiation and cessation of activity?
Cessation of activity is the definitive termination of your business. Deregistration corresponds to the disappearance of a company’s legal entity and specifically its SIREN.
How to close your own business?
You must join your personal space on autoentrepreneur.fr and announce the termination of your activity as well as your last trade.
What are the rights after termination of self-employed activity?
Self-employed workers are entitled to a Self-Employed Employees Allowance (ATI) of €800 for 6 months.