End a business is a complex matter that can take time. It is necessary to carry out a dissolution and at a liquidation actives. Once the shareholders have officially pronounced the end of the liquidation and requested the removal of the company from the register of commerce and companies, it ceases to exist. Here is 10 steps to closing a business.
| No. | Description of the tasks to be performed |
|---|---|
| (1) | Determine the reason for the closure |
| (2) | Analyze company accounts |
| (3) | Ask the opinion of the partners on the dissolution |
| (4) | Publish a legal notice of dissolution |
| (5) | Submit a file to the CFE |
| (6) | Carry out liquidation operations |
| (7) | Establish a final liquidation account |
| (8) | Decide the closing of the liquidation |
| (9) | Publish a legal notice of liquidation |
| (10) | Request the deregistration of the company |
Before thinking about closing the business, it is necessary to determine the causes that lead to such a decision. That is to say, it is important to answer the question: why is it important to close the business?
In practice, the patterns may vary. It may be a decision of the co-shareholders who want to stop, consciously and before term, the partnership contract (we then speak of early dissolution).
But it can be otherwise. For example, the manager can warn the co-shareholders about foreseeable financial problems. In this case, it is better to close the business before their occurrence.
The real problems, the decision to permanently close the company is not the responsibility of the co-shareholders or the manager. It is to magistrates of the court to decide on the cessation of the activity.
Then the state of health financial organization should be carefully considered. Depending on the data appearing in its balance sheet, the partners can decide to opt for an amicable procedure.
When the company is solvent, i.e. the assets are sufficient to repay all the liabilities, the dissolution may lead to a amicable liquidation (easier and cheaper).
Conversely, if the company finds itself in a situation of payment default (its assets do not cover the debts), the partners have no choice: the manager must declare cessation of payments. In this case, the judicial liquidation procedure – possibly lightened – is implemented.
When the decision of dissolution can be taken by the shareholder(s), they should be convene a general meeting for them to decide on the operation. The applicable majority is that imposed by law (2/3 for SARLs created after 2005 for example) or that provided for in the articles of association (for SAS in particular). When the company has only one partner, the decision rests with him by right. Anyway, a minutes of dissolution is established.
Furthermore, on this occasion, it is appropriate to appoint a liquidator. In the event of an amicable liquidation, the partners appoint one. They can award him a fee. The latter may also exercise his functions free of charge. For a judicial liquidation, it is the judges who decide. Remuneration is determined according to a scale (tariffs fixed by decree).
Closing a company is a major event. It symbolizes the beginning of his “end of life”. So that this decision is not kept secret, it is obligatory to communicate it to the public. To this end, the law provides for issue a notice of dissolution in a journal of legal announcements covering the department where the company's head office is located.
A notice of dissolution must contain several mandatory information. It must indicate the first names, surname and contact details of the liquidator, as well as the address to which the documents relating to the liquidation will be sent. Once the broadcast of the announcement is scheduled, the newspaper to publish a certificate of publication. This document will serve as proof of its compliance with the Act.
After writing the minutes, having the partners present sign and posting a legal announcement, it is necessary to submit an application for amending registration in the trade and companies register (RCS). For this, a file must be collected and sent to the business formalities center (CFE).
The query includes many vouchers and copies of documents. It is also essential to attach an M2 form, completed, dated and signed. Following this procedure, the registry of the commercial court delivers to the company a new Kbis extract, which mentions the situation of dissolution of the company ("company in liquidation").
Throughout the liquidation process, which begins on the date of dissolution, the liquidator will dissolve assets of the company and settle debts, that is, repay creditors. In addition, he sells inventory and fixed assets or collects customer invoices and reimburses the company's debts with the funds obtained.
The liquidator's mission cannot last more than 3 années. During this longer term,, replaces the legal representative of the company. If the opportunity arises, he must close the annual accounts and call the shareholders for their approval. In addition, he must inform them of various points within the first 6 months of his appointment.
Once the work is completed, the liquidator draws up final accounts, that is to say a single settlement account, which is in the form of a balance sheet, with some differences. Indeed, there are no longer any liabilities or assets, with the exception of the goods contributed by the partners.
The final accounts reveal a result and generate a liquidation bonus or a liquidation malpractice. In the first case, the amount of equity is greater than the share capital. The partners then recover their contribution (non-taxable) and an additional sum (taxable). In the second case, equity is less than share capital.
Partners must give their OK to the final liquidation accounts presented by the liquidator. It is also about voting on the distribution of profits. Once the liquidator is relieved of his duties, a liquidation report is established, which marks the end of the company.
Footnotes : the closing of the liquidation is only possible when all the company debts are repaid. If these conditions are not met, only the courts can put an end to the existence of the company, by pronouncing a closure for lack of funds.
A company that knows its final judgment following a liquidation cannot go unnoticed. There public awareness and of the persons concerned is therefore essential and must be carried out within one month of the decision.
Le amicable liquidator must then write and publish a liquidation closing notice same journal of legal announcements (JAL) than the one used to announce the dissolution. This information release must include several mandatory statements and the newspaper will provide a certificate of publication.
La final stage of closing a business is to ask suppression legal records. This gait is mandatory because all companies are listed in a special register called the trade and companies register (RCS). A dissolved and liquidated company must deregister because it no longer has a legal existence.
The deregistration request contains several supporting documents and documents, including an M4 form and the final liquidation accounts. Once processed, the registry of the commercial court carries out the cancellation, publishes a notice in the official bulletin of civil and commercial announcements (BODACC) and gives the company a extractsDeregistration Kbis.
Answer: The first step to closing a business is to file a formal request with the relevant authorities.
Answer: You must provide detailed information on the financial situation and assets of the company, as well as documents relating to all legal and administrative formalities related to its dissolution and cessation of activities.
Answer: The consequences of closing a business can include loss of employment, cessation of operations, reduction of profits and liquidation of assets.
