Temporary cessation of activity - natural person

Any individual company whose director wishes to cease trading temporarily.

Temporary cessation of activity is a voluntary and temporary cessation of activity, which means that the company is not dissolved. A company that has been placed in a state of dormancy or temporary cessation suspends its activity, but retains its registration and continues to operate for tax and social security purposes.

The period of inactivity is limited to 1 year for a sole proprietorship (renewable 1 time in the case of a commercial activity).

During the dormant period, the tax, social security and management consequences are as follows:

• exemption from VAT declaration and payment ;
• taxation of profits: even if there is no revenue or turnover, the company or sole trader must file an income tax return showing "nil" or "0".
• suspension of activity is treated as cessation of activity only after 12 consecutive months. The company remains liable for the business property tax (cotisation foncière des entreprises - CFE) for these 12 months, and is then exempt;
• if the manager is affiliated to the scheme for non-salaried workers (TNS), certain compulsory minimum contributions (daily allowances, basic old age insurance, invalidity and death) will still have to be paid, even if the company has no business income;
• if the company has at least 1 employee: a balance sheet and profit and loss account must be drawn up.

At the end of the temporary suspension of activity, the director may :

• resume business = reactivation of the company ;
• cease trading for good = dissolution of the business, with removal from the registers (RCS or RM);
• sell the business = sell the company or the business.

Steps to be taken to mothball the business: within one month of the decision to mothball the business, the manager must declare the temporary cessation of activity online at the business formalities desk.