Temporary cessation of activity or putting a company to sleep
Verified 31 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)
Temporary cessation of activity allows activity to be suspended for a specified period. In the case of a business, we are talking about putting to sleep. Temporary cessation of activity prevents the company from being dissolved and written off. During this period of inactivity, the company retains its registration and continues to settle its tax and social security payments. Advertising formalities are necessary.
Micro-entrepreneur
Warning
Since 1er january 2023, it is no longer possible to carry out your procedures in a company Formalities Center (CFE). You must make them on the website of the company formalities office.
Once you have decided to cease your activity, you must within 1 month complete a termination form (by checking temporary termination) using the companies formalities window.
Please note
It is not necessary to announce the temporary cessation of activity in a legal listing support (Shal)
General case
The period of inactivity is limited to 1 year.
Your business is of a commercial nature
The period of inactivity is limited to 1 year.
However, this period may be extended by an additional year.
You have no accounting obligations to perform.
General case
During the temporary cessation of activity, you stay affiliated with your social security system :
- If you are in scheme for self-employed persons : when you have no working income, you still have to pay some compulsory minimum contributions (daily allowances, basic old-age insurance, invalidity and death).
- If you are in general social security scheme : the amount of your social contributions depends on the remuneration linked to your micro-company. You have no contributions to pay during the period of inactivity.
You benefit from ACRE
The exemption from social security contributions which you benefit from under ACRE shall be maintained during the period of temporary cessation of activity.
- VAT: you are exempt from reporting and payment.
- Business tax: you must indicate on your monthly or quarterly reporting that your turnover is zero.
- Company Property Tax (CFE) : you have to pay it for 12 months. You will then be exempt. Caution: companies with a turnover or revenue of less than or equal to €5,000 are exempt from CFE.
At the end of the cessation period, there is 2 possibilities :
- Either you reactivate your company
- Either you're permanently out of business
You must declare your choice (modification or cessation of activity) on the website of the company Formalities Office:
This cessation of activity results in the cancelation of your company RNE: titleContent and at the SCR: titleContent for a commercial activity.
If you have not achieved or reported any turnover or revenue for at least 2 calendar years consecutive, you are presumed not to pursue any professional activity justifying your affiliation to social security.
Expungement may be decided by the social security authorities.
You can object to this delisting within 1 month upon receipt of such information.
Sole trader
Warning
Since 1er january 2023, it is no longer possible to carry out your procedures in a company Formalities Center (CFE). You must make them on the website of the company formalities office.
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General case
Temporary cessation of activity is possible unless you are experiencing financial difficulties that may lead to cessation of payments.
Existence of a secondary establishment
Temporary cessation of activity is not possible if you are experiencing financial difficulties that could lead to cessation of payments.
If you have a secondary establishment, before proceeding with the formalities of the temporary cessation of activity, you must close that establishment by declaring the cessation of activity on the site of the company formalities window.
Warning
Since 1er january 2023, it is no longer possible to carry out your procedures in a company Formalities Center (CFE). You must make them on the website of the company formalities office.
After you have decided to temporarily cease your activity, you must within 1 month declare such termination on the website of the company formalities window.
Please note
It is not necessary to announce the temporary cessation of activity in a legal listing support.
General case
The period of inactivity is limited to 1 year.
Your business is of a commercial nature
The period of inactivity is limited to 1 year.
However, this period may be extended by an additional year.
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General case
You must prepare an accounting balance sheet and a profit and loss account if you have at least 1 employee.
Signed commercial lease
- You must prepare an accounting balance sheet and a profit and loss account if you have at least one employee.
- You may terminate or not renew your commercial lease if it contains a clause providing for the uninterrupted personal exploitation of the goodwill.
You can live in a company of domiciliation (with signature of a contract of domicile) or at your home.
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General case
During the temporary cessation of activity, you stay affiliated with your social security system :
- Case of self-employed persons scheme (SFT) : when you have no working income, you still have to pay some compulsory minimum contributions (daily allowances, basic old-age insurance, invalidity and death).
- Case of general social security scheme : the amount of your social contributions depends on your remuneration. You do not have to pay any contributions during the period of inactivity of the company.
You benefit from ACRE
The exemption from social security contributions which you benefit from under ACRE shall be maintained during the period of temporary cessation of activity.
- VAT: you are exempt from reporting and payment.
- Business tax: you must indicate on your monthly or quarterly reporting that your turnover is zero.
- Company Property Tax (CFE) : you have to pay it for 12 months. You will then be exempt. Caution: companies with a turnover or revenue of less than or equal to €5,000 are exempt from CFE.
After a temporary cessation of activity, you can either resume your activity by making an amending registration or permanently cease your activity.
Where there is no turnover or revenue or no turnover or revenue declaration during a period of at least 2 consecutive calendar years, the sole trader is presumed no longer pursue a professional activity justifying his affiliation to social security.
In this case, its deletion may be decided by the social security body unless the sole trader objects.
New amendment at the companies formalities window
At the end of Maximum 2 years, 2 situations are possible:
- Either you reactivate your company
- Either you're permanently out of business
You must declare your choice at the company formalities window:
FYI
Termination of activity results in your deletion from the RNE: titleContent and the SCR: titleContent for a commercial activity.
The permanent cessation of activity requires fiscal and social measures.
Ex officio cancelation
If you have not achieved or reported any turnover or revenue for at least 2 calendar years consecutive, the director of the Urssaf informs you that your social security is being considered.
You can object to this delisting within 1 month.
The cancelation of social security entails automatic cancelation from legal registers and registers (such as the SCR: titleContent, on RNE: titleContent, the Mermaid).
Business
General case
Sleeping is possible unless businesses have financial difficulties that can cause cessation of payments.
Existence of a secondary establishment
Warning
Since 1er january 2023, it is no longer possible to carry out your procedures in a company Formalities Center (CFE). You must make them on the website of the company formalities office.
Sleeping is possible unless businesses have financial difficulties that can cause cessation of payments.
If the business has a secondary schoolbefore proceeding with the formalities for putting the business to sleep, this establishment must be closed by filing a cessation of activity form with the companies formalities office.
Only the legal representative of the business (manager, president, for example) decides to put the business to sleep.
The holding of a general meeting of the partners in order to decide on putting to sleep is optional (unless otherwise provided for in the statutes).
Within 1 month as from the decision to put on hold (or the general meeting of the partners), the business must file an M2 form to the competent body depending on the nature of the activity.
Company Amendment Declaration - Legal Entity (M2)
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commercial business
Form M2 must be filed with the chamber of commerce and industry the place where the company has its registered office.
Business of the trades and crafts sector
Form M2 must be filed with the chamber of trades and crafts the place where the company has its registered office.
Who shall I contact
civil business and business of liberal practice
Form M2 must be filed with the registry of the commercial court or the court of justice of the place where the company has its registered office.
For these businesses, the form can also be filed on the site www.infogreffe.fr
Warning
It is not necessary to announce the putting to sleep in a legal advertisement publisher.
The period of inactivity is limited to 2 years.
The head of the business shall:
- Continue establishment and annual social accounts
- Convene and hold annual accounts approval meeting
If a commercial lease has been entered into, it may be terminated or not renewed if it contains a clause stipulating the uninterrupted operation of the goodwill. The business may then be domiciled in a company of domiciliation (with signature of a contract of domicile).
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General case
The leader remains affiliated to the social scheme on which it depends :
- Case of scheme for self-employed persons : of minimum contributions compulsory benefits must be paid (daily allowances, basic old-age insurance, invalidity and death).
- Case of general social security scheme : the amount of social contributions depends on the remuneration of the manager.
Social contributions and contributions of any employees must be paid during the period of sleep.
ACRE Recipient
The exemption from social security contributions which you benefit from under ACRE shall be maintained during the period of temporary cessation of activity.
- VAT : the business is exempt from declaration and payment.
- Business tax: one statement of result with the word "none" must be filled in.
- Company Property Tax (CFE) : suspension of activity shall be treated as cessation of activity after 12 consecutive months. The business is no longer taxable to the CFE after 12 months of inactivity.
Sleeping terminates in two ways: either the business resumes activity or it is dissolved.
If no action is taken within two years, the business is automatically canceled.
New amendment to the one-stop-shop for company formalities
Warning
Since 1er january 2023, it is no longer possible to carry out your procedures in a company Formalities Center (CFE). You must make them on the website of the company formalities office.
At the end of the two-year period, the director must:
- Either reactivate the business
- Either cease permanently the activity
He must declare his choice on the website of the company formalities office:
Warning
The permanent cessation of activity requires fiscal and social approaches.
Ex officio cancelation
If there is no resumption of activity after 2 years, the Registrar of the Commercial Court may request the automatic cancelation of the business.
The head of the business shall be informed by registered letter with acknowledgement of receipt.
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Speak with an advisor on Place des Entreprises- Commercial Code: Articles L123-25 to L123-28Exemption from the deposit of profit and loss accounts
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- Commercial Code: Article R123-69Statement regarding changes requested by the businesses
- Commercial code: article R123-130Automatic cancelation from the commercial register and businesses
- Social Security Code: Article L613-4Automatic cancelation of social security membership
- Company Creation or Recovery Assistance (Acre)
- Submission of the annual accounts of a business
- Opening a secondary or complementary establishment
- Business Tax (SI) Reporting and Payment
- Company Property Tax (CFE)
- Fees for formalities at the registries of commercial courtsInfograft
- Cessation of activity: tax aspectsMinistry of Economy