Termination of business activity: grounds and procedure

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Business termination is a procedure faced by many people who have a business. And if it became necessary to eliminate the IP, it is necessary to study in detail the topic related to this process. It seems to many that this is a complicated procedure, but in reality everything is simpler than opening an IP. Now it is worth discussing this topic and giving answers to all questions related to it.

Grounds for liquidation of IP

The reasons for termination of business activities are regulated by Federal Law No. 129, Article No. 22.3. They stand out in the following list:

• Loss of interest in business by a person.
• Unprofitable business activity or lack of profit (work "to zero").
• Unfulfilled re-registration obligations.
• The occurrence of circumstances beyond the control of a person (declaration of his incapacity or death).

In general, grounds for terminating a business may vary, butit is difficult to call them special. Absolutely no one will prevent a person from liquidating an IP, if he just wanted it himself.

If there are debts

This case needs to be considered separately. Termination of a citizen's entrepreneurial activity if he has a debt is not problematic, but there are still some "pitfalls" in this topic.

If an entrepreneur underpaid to the Pension Fund, then there should not be any obstacles on the way to the liquidation of the IP. A person can repay the debt to the FIU both before and after this procedure. This will have to be done in any case, otherwise he will “drip” pen alties, and in case of non-payment, they may be called to court.

The same can be said about cases where a person owes a bank. Individual entrepreneurs often have debts on loans to banks. A citizen can liquidate his enterprise, but non-payment will continue to be registered with him.

But if a person owes the tax service, then there will be problems. All calculations must be made before the start of the procedure. Before closing an individual entrepreneur, a citizen is obliged to submit declarations for all the years of its existence. Even if the activity was not carried out. In this case, a zero declaration is submitted, the preparation of which is not difficult.

If a citizen has previously submitted documents in a timely manner, then he will still need to report for the last tax period.

If there are workers

There is nothing easier than stopping a businessactivities in the absence of a businessman employees. But if he led an IP with the involvement of labor, then he will need to go through a complete liquidation procedure, which implies taking into account the interests of employees and the rules that are established by law.

Here are the actions a businessman must take in this case:

• Notify all of your employees 2 months prior to proposed business termination.
• It is also necessary to report this to the Employment Center, the same period.
• Pay all extra-budgetary funds and PFR deductions for employees. If a citizen made contributions to the insurance for himself, then he will need to deregister himself.
• Finally settle accounts with employees - to issue not only salaries, but also compensation provided for such cases by the Labor Code.

All the same must be done in relation to employees who are on maternity leave at the time of liquidation. This is also stated in the Labor Code of the Russian Federation.

Current account closing

This is another action that must be taken when deciding to close the IP. And this stage involves the following steps:

• Preparation of documents required to terminate the agreement with the bank in which the account was opened.
• Paying debts owed to counterparties and the bank.
• Withdrawing cash, if available on the account.
• Filing an application to close it.
• Get help after this procedure.
• Notification to the tax office and funds that the account has been closed.

If the entrepreneur did not have an agreement with the bank, then his task in this case is made easier - he can skip this stage.

Deregistration of cash register

This is also necessary if such equipment is available. But the entrepreneur does not have to deal with this procedure - the tax authorities are engaged in it, which is stated in the Order of the Ministry of Finance of Russia No. 94 dated 2012-29-06.

If you decide to do everything yourself, then you will need to submit the following documents to the inspection:

• Cash register passport.
• His registration card.
• Cashier's journal.
• Agreement with CTO.
• Fiscal report.

You will also need to provide the cash register itself to the inspection. This is necessary in order to fix the readings of the fiscal memory. The procedure takes time, so many entrepreneurs leave it to the tax authorities. Moreover, this is officially allowed by law.

State duty

It must be paid without fail. Since the liquidation of individual entrepreneurs is a public service, and all of them are provided for a certain amount.

In this case - 160 rubles. This is approximately 20% of the amount that a citizen pays for registering an IP.

There are two ways to pay:

• Online. For this, there is a special service on the official resource of the Federal Tax Service. But to make a payment, you will need details, and each region has its own. So the businessman needs to clarify the informationin your department of the Federal Tax Service.
• In the bank branch. There, in addition to the payment details, you will also need to provide your passport. In addition, the bank takes a commission, but from 160 rubles it will be minimal.

The form will need to indicate the type and basis of payment, passport details, TIN number of IP, details of the Federal Tax Service, date of payment and amount.

It is also important to write out a separate requisite - the budget classification code (BCC). Without his instructions, payments are not accepted. In 2018, the following BCC is valid for IP closure: 182 108 070 100 110 001 10.

What documents do I need?

To terminate business activities, it is necessary to submit some papers to the tax office. This is:

• Receipt confirming payment of the state fee (check from a bank or its electronic version).
• TIN card.
• Passport.
• Certificate of OGRNIP assignment and extract from USRIP. These documents were issued to a person at the first stages of registration of IP.
• Application according to the approved form (Р26001). If a businessman submits documents on his own, then he can fill out the 1st and 2nd paragraphs, and put his signature later, in the presence of an inspector. When entrusting this matter to your representative or sending papers by letter, you must also fill in the 4th field. The application is signed in the presence of a notary.
• Extract from the Pension Fund. It confirms that there are no debts and that the person has completed all insurance payments on time.

It is important to note that an extract from the Pensionfund is not required. If the applicant does not provide it, then the territorial office of the Pension Fund itself will send the necessary information to the tax office in electronic form. For this, an interdepartmental exchange was created.

How to fill out an application?

The most important thing is to be careful and avoid mistakes when entering data into the form. Otherwise, the termination of business activities will be delayed, because then everything will have to be redone.

The application consists of only one page. Here is what information is entered into it:

• Organization number.
• Last name, first name and patronymic (if any).
• TIN number.
• Confirmation of the application for the issuance of an extract from the USRIP on the liquidation of the enterprise.
• Contact details (phone and e-mail).
• Signature and date.

If the documents are submitted by a trusted person, then you will need to enter information about the person who authenticated the signature (usually a notary or authorized to perform his work).

Submission of documents

If a person decides to close the IP and has already prepared everything for this, then the matter remains small. You just need to submit documents. This can be done in one of the following ways:

• Personally come to the inspection.
• Send a representative by proxy.
• Contact the multifunctional center. This can be done in person or by proxy.
• Send insured documents by mail with a description of the attachment. Withinthe territory of Moscow, they can be sent via Pony Express and DHL Express.
• Submit documents through the public services portal.

After they are accepted, the inspection will issue a receipt to the person in their receipt or send it to him by mail or e-mail.

It takes a maximum of 5 days to consider an application for termination of business. An individual entrepreneur is considered liquidated after an entry is made about it in the USRIP. This is stated in Article No. 22.3 (ninth paragraph) of Federal Law No. 129.

Bankruptcy

This needs to be told separately. Article No. 25 (paragraph 1) of the Civil Code states that an entrepreneur who is unable to satisfy the claims of creditors related to his activities may be declared bankrupt by a court decision.

The provisions under which this status is assigned are described in Federal Law No. 127. A potential bankrupt is every businessman who has not fulfilled his obligations for three months (did not pay contributions, taxes). And also all entrepreneurs, whose amount of liabilities exceeds the total value of the property they own.

A businessman can be declared bankrupt both in court and voluntarily. But he must officially inform the debtors about it. After that, all licenses issued to him are cancelled. Commercial property is seized. The same can apply to what belongs to him personally (apartment, car, house). But this is the case if commercial property and cashwill not be enough to cover debts.

So going out of business due to bankruptcy is usually not easy.

Termination of business activities of a legal entity

This is a separate issue, so you need to pay special attention to it. The reasons why a legal entity usually terminates its activities include:

• Reorganization. The exception is the separation of another organization from the membership.
• Temporary suspension of activities.
• Liquidation of LLC or CJSC.

All cases are specific - these are different forms of business termination. But now it is worth talking in more detail about the liquidation. Since only it implies the final closure of the business.

The grounds for liquidation are as follows:

• Achieving statutory goals.
• Completion of the term for which the legal entity was created.
• Principally unattainable statutory goals.
• No need to continue doing business.

There is also a compulsory procedure for the termination of business activities by a court decision. This happens in the following cases:

• Carrying out activities without a license. In some cases, its registration is mandatory.
• Performing activities expressly prohibited by law.
• Bankruptcy. This applies to commercial organizations and foundations (with the exception of state-owned enterprises).
• Assumptionbusinessman gross and repeated violations of the law.
• Loss of property.

Also, an LLC can be closed due to a mismatch in the address of the object and untimely submission of reports and declarations.

Actions after IP liquidation

Even the termination of activities and deregistration is not a reason for the tax authorities not to carry out an audit while the business still existed. This happens very rarely, but still the inspection may at any time request documents for analysis.

Therefore, a citizen needs to keep primary papers for the next four years, and for the accrual and payment of insurance premiums - as many as six.

Also, do not forget about paying off debts to creditors, former employees and PFs. By the way, payments to the Pension Fund must be made within 15 days after deregistration as an individual entrepreneur.