The closure of a company is often decided by the partners in order to cease the company's activity, to transform the company into another type of company or simply in the event of disagreement between the partners.
Closing a company involves two stages: dissolution and liquidation. At the end of this procedure, the company ceases trading for good.
Here are the 4 key stages of this operation, to help you see things more clearly
The decision to cease trading in a company must be taken by the shareholders in accordance with the procedures set out in the articles of association. An Extraordinary General Meeting must be held.
It will vote to dissolve the company, and at the same time appoint an amicable liquidator.
The conditions for making this decision vary according to the type of company:
- In SCI, the principle is unanimity of the partners. In the Articles of Association, however, the partners can lay down more flexible conditions.
- In SARLs, the principle is that modifications are decided by a two-thirds majority of the shares held by the partners present or represented. The Articles of Association may set stricter conditions.
- In SAS, it is the Articles of Association that lay down the conditions, as the law is silent on this point.
The minutes must be registered by the liquidator with the tax authorities. He must then file the following documents with the clerk's office:
- A copy of the minutes of dissolution
- A duly completed and signed M2 form
- A certificate of publication of the legal notice
- A declaration of non-conviction and filiation concerning him/her
- A power if he doesn't do it himself
- Payment of court fees (approx. €200)
The liquidator appointed at the Annual General Meeting has one main function during the liquidation process: to sell the company's assets, generally up to the amount of its liabilities.
Once the liquidator's mission has been completed, the partners convene a general meeting to approve the liquidation accounts.
They discharge the liquidator and record the close of the liquidation.
If the liquidation results in a surplus (liquidation surplus), it must be shared between the partners in proportion to their stake in the company.
In the event of a liquidation loss, each partner must contribute to the settlement of debts in proportion to the number of shares held.
Liquidation surpluses are taxed at 2.5% of their amount, except for EURLs and SASUs.
Finally, to close a business, the company must be struck off the RCS register. To do this, the following must be filed with the clerk's office:
- A duly completed and signed M4 form
- A power of attorney if applicable
- Proof of publication in a legal gazette
- Payment of the formality, i.e. €14.79
Written by our expert La Rédaction
March 2, 2018
