Closing a business in France—whether you’re a sole trader or a registered company—requires careful navigation of legal, tax and administrative steps, especially at the right moment. In this guide we walk you through the essential decisions, deadlines and procedures, from declaring cessation to final deregistration.
Is it time to shut down?
Closing a business in France—whether you’re a sole trader or a registered company—requires careful navigation of legal, tax and administrative steps at the right moment. In this guide, we walk you through the essential decisions, deadlines and procedures, from declaring cessation to final deregistration.
Closing a business is never just about signing the final paperwork; it’s about preserving value for shareholders while respecting the rights of employees and creditors. – Marc Timmermans, Partner, Tax/Corporate
Closing a sole proprietorship
A sole trader must wind up the business in two distinct stages:
1. Declare cessation of activity: Submit the cessation of activity form and any required documents to the Trade and Commercial Register no later than 30 days after the effective cessation date.
2. Declare closure for tax purposes: File the final income‑tax return, VAT return and CET (Contribution Économique Territoriale) within the statutory deadlines:
- Income tax: ≤ 45 days (or ≤ 60 days for self‑employed professionals) after the cessation.
- VAT: ≤ 30 days if you are under the standard actual VAT regime; ≤ 60 days under the simplified scheme.
- CET: Calculated annually; a pro‑rata refund is possible if you cease part‑way through the year.
You will be taxed on:
- Profits earned since the end of your last tax year.
- Deferred profits. Particularly capital gains on the transfer of company shares.
- Capital gains on the sale of fixed assets.
The cessation of activity must be declared to the Trade and Commercial Register within thirty days of the effective date of cessation – Article L123‑1 of the French Commercial Code.
Tax obligations at a glance
Here are the key tax obligations at a glance:
- Income tax: Final return ≤ 45 days (or 60 days for professionals).
- VAT: ≤ 30 days (standard) or ≤ 60 days (simplified) after cessation.
- CET: Annual; pro‑rata refund possible.
Meeting these deadlines is essential to avoid penalties and keep the closure on track.
Temporary vs Permanent closure of a company
Here are the two forms of cessation you can consider:
- Temporary cessation: The company pauses activity but remains on the registers; social‑security and accounting obligations continue.
- Permanent closure: Achieved through dissolution‑liquidation (or a “dissolution without liquidation” via a Universal Transfer of Assets).
Choosing the right option depends on your strategic goals and the financial health of the business.
A final tax return must be filed within forty‑five days of the cessation, or sixty days for self‑employed professionals. – Article 204‑A of the French Tax Code.
Step 1: Approve the dissolution of the company
The legal representative calls an Extraordinary General Meeting (EGM). Majority rules depend on the corporate form:
- SARL (created after 4 Aug 2005): Two‑thirds of shares; quorum of 1/4 of shares on first call (1/5 on second).
- SCI: Unanimous vote, unless the articles allow otherwise.
- SAS: Terms set in the articles; the law imposes no quorum or majority.
- Sole partner: Decision made unilaterally, without an EGM.
Once the vote is recorded, the dissolution process can move on to the next formalities. If you’re planning to set up a new entity later, our guide on company setting‑up might be useful.
Step 2: File the legal formalities
Before you begin, ensure you have all the required documents and that the liquidator has been officially appointed.
- Publish a dissolution notice in an official legal journal within 30 days of the EGM minutes, naming the liquidator. You can verify the publication requirement on the Legifrance page for Article L123‑1.
- Submit the company‑closure form to the Trade and Commercial Register together with the required tax documents. The French tax authority provides a handy guide on the cessation process.
Once these filings are completed, you can move on to the next stage of the closure. Professional assistance is strongly advised to avoid missing a step. For any tax questions that arise, see tax assistance (individuals and corporate).
Step 3: Liquidate the assets
After registration, convert assets into cash:
- Material: Sell movable and immovable property.
- Financial: Collect receivables, settle debts.
- Human: Make employees redundant according to local law.
- Accounting: Draw up liquidation accounts.
Liquidation judiciaire: If liabilities exceed assets, the court may open a judicial liquidation (insolvency) procedure.
Shareholders then hold a final GM to approve the liquidator’s report and decide on any surplus or deficit. If you need help with outstanding receivables, check out debt recovery.
Step 4: Hold the final general meeting
During the meeting the liquidator presents the detailed liquidation accounts, answers shareholders’ questions and outlines any remaining liabilities or assets. After a thorough review, the shareholders vote to approve the accounts. Approve the liquidation accounts. If a surplus exists, it is distributed per the articles of association and must be registered (2.5 % “droit de partage”), with social‑security contributions and an income‑tax installment due. For deeper tax guidance, refer again to tax assistance.
Step 5: Deregister the entity
Before the final strike, you must submit the required documents to the Trade and Commercial Register:
- The legal‑journal publication certificate confirming the dissolution notice was published.
- The minutes of the closing general meeting, signed by the liquidator and shareholders.
Costs: Publication in a legal journal typically costs €150‑€300; the “droit de partage” is 2.5 % of the surplus distributed.
Document retention: Keep accounting books for 10 years, invoices for 5 years, and other legal documents for 5 years after deregistration.
Once the register processes these filings, the company is removed from the RCS and ceases to exist legally. After deregistration, any remaining assets become the property of the shareholders, subject to any outstanding liabilities. Should any post‑closure commercial issues arise, our page on business and commercial issues has you covered.
How long does it take?
The duration of the closure process varies depending on the legal form and the complexity of the company’s affairs.
- Sole proprietorship: A few weeks to a couple of months, depending on tax‑office processing.
- Company: Longer, because of multiple filings, liquidation, and deregistration steps.
These timelines are approximate and can be shortened if all required documents are filed promptly and the tax authority responds quickly. The Universal Transfer of Assets (TUP) can shorten the timeline dramatically: the dissolved company transfers all assets and liabilities to its 100 % parent, eliminating the need for a liquidator, auditor, or merger report. This method often reduces the overall closure period to just a few weeks, provided the parent company meets the 100 % ownership requirement and complies with the formalities.
Our role is to guide you through every step, from the initial cessation form to the final deregistration, so you can close with confidence and move on to the next chapter. – Marc Timmermans, Partner, Tax/Corporate
Get our expert french lawyers on your side
Our platform My French Lawyer brings together a team of French‑registered lawyers ready to guide you through every stage of your business journey—from the initial registration and any subsequent amendments to the careful winding‑down of operations. With years of experience in French commercial law, we offer personalized support that ensures all legal formalities are completed correctly and on time. To learn more about our qualified attorneys, explore our practice areas, and schedule a confidential consultation, please visit our website and use the contact link to request a meeting at a time that suits you. We look forward to helping you move forward with confidence.