Suspension of the company - a solution for temporary interruption of activity

However, suspending a business can be beneficial for any entrepreneur, primarily because of the financial and tax benefits.

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What does suspension of activity mean?

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Suspension of activity means the cessation of the economic activity of the company for a limited period, requested by the legal representative.

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In this situation, it will be necessary to file certain documents with the Trade Register and pay certain fees. As the company will only be temporarily inactive and will not cease trading permanently, it will have to fulfil certain obligations.

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What happens to the company when it is not operating?

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The maximum period during which a company can suspend its activity, on its own initiative, is 3 years, according to the law.

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There are differences between suspension of activity on one's own initiative and suspension by the tax entity. However, in both cases, the company retains its legal personality and holds the obligations and restrictive rights imposed by the state of inactivity.

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Thus, throughout the suspension period, the company:

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1. may not carry out the activity for which it was authorised, i.e. may no longer issue invoices or record income;

2. has access to its bank accounts and can manage the amounts held in the account;

3. can collect money from invoices issued before the suspension;

4. will submit zero declarations;

5. may resume its activity at any time by reactivating with the ONRC, regardless of the time limit.

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Documents required for suspending the activity of a company

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In order for a company to temporarily suspend its activity, it is necessary to register the relevant documents with the ONRC by filing the following documents:

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- Registration form;

- Declaration that it no longer carries out activities at the head office, at secondary offices or outside the head office;

- Resolution of the General Meeting of Shareholders or Resolution of the Sole Shareholder on the decision to suspend the company's activity, in original. This must include: company letterhead, number, date, signatures of the decision-makers, convening of the meeting, fulfilment of the conditions for the validity of the decision, according to the legal or statutory provisions, duration of the suspension/resumption of the decision);

- Certified statements for suspension authorisation;

- Special power of attorney, power of attorney or delegation (in original form), if applicable.

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Advantages of the suspension of the company's activity

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- This procedure can be carried out whether or not the company owes debts to creditors (but not to the State);

- You do not have to suspend your activity for the whole 3 years - if you want to resume your activity after 1 year you can do so;

- Under a derogatory regime, companies do not have to file returns: D100 - payment obligations to the state budget, D101 - corporate income tax, D112 - payment obligations for social security contributions, income tax and nominal register of insured persons, D120 - excise duties, D300 - VAT returns. However, there is no exemption from the obligation to file annual financial statements.

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