What is the mothballing of a micro-business?
Putting a micro-business into mothballs is a way of temporarily and voluntarily ceasing its activity, without actually deregistering it. In other words, it allows you to resume your activity at any time after a break. This solution is ideal if you wish to maintain the legal and administrative existence of your micro-business.
There are several reasons why an auto-entrepreneur may temporarily cease trading:
- returning to paid employment ;
- a change of project;
- lack of time;
- financial difficulties ;
- unfavorable circumstances...
Why mothball a self-employed business?
Mothballing allows you to put your business on hold, without automatically deregistering your micro-business. This can be a good idea at the start of your business, while you fine-tune your project, and still have the option of resuming your activity at any time.
It can also be used while you wait to decide what to do with your micro-business. In fact, temporary cessation of activity can be a solution if you hesitate to change activity, or even dissolve your micro-business.
Mothballing is also a perfect alternative to deregistering your micro-business. If you are no longer in business, your micro-enterprise is automatically deregistered after 2 years without any declared sales. By temporarily suspending your activity, you can avoid losing it for good, and leave yourself the possibility of continuing your business one day.
What is the procedure for temporary cessation of activity?
To wind up your micro-business, you must submit a request for cessation of activity within one month to Guichet unique, the online portal dedicated to registration, modification and cessation formalities.
The cost of temporary cessation of activity varies according to the nature of the activity:
- for commercial activities, the cost is €100 for the Registre du Commerce et des Sociétés (RCS);
- for craft businesses, the cost is €60 from the Répertoire des métiers (RM).
Once the cessation of activity form has been completed, the Trade and Companies Register (RCS) or the Trades Register (RM) will be updated automatically.
It is not compulsory to announce the winding-up of your micro-business in a medium authorized to receive legal announcements.
What are the consequences of temporary cessation of micro-business activity?
Putting your business on hold has social and tax consequences. So what tax and social security changes should you be aware of before you temporarily cease trading?
Social consequences
Firstly, during the temporary cessation of your activity, you remain affiliated to the social security scheme to which you belong. Since you benefit from a simplified social security system for calculating and paying your social security contributions, you won't have to pay any contributions in the absence of sales. In fact, if your micro-enterprise is mothballed, your declared sales will be equal to 0. You will therefore be exempt from paying social security contributions.
On the other hand, the exemption from social security contributions you receive under theACRE scheme (aid for setting up or taking over a business) is maintained during the period of inactivity of your micro-business.
Tax consequences
The temporary suspension of your business has tax consequences. You are exempt from declaring and paying VAT. So, when VAT is due, the mothballing temporarily suspends your VAT declarations and payments.
However, you are required to :
- indicate on your monthly or quarterly declaration that your sales are equal to 0 ;
- pay business property tax (CFE) for 12 months following temporary cessation of activity.
Companies are exempt from CFE in certain cases:
- with sales of €5,000 or less;
- in the first year of business.
Summary table
Here is a summary table of the social and tax consequences of putting a self-employed business into mothballs:
| Social consequences |
Tax consequences |
| Continued membership of your social security scheme |
Exemption from VAT declaration and payment |
| No contribution payable if sales equal 0 |
Sales declaration even if sales equal 0 |
| Continued exemption from social security contributions under the ACRE scheme |
Payment of CFE for 12 months, except in the first year of business or if sales are less than or equal to €5,000. |
Termination of a commercial lease
In principle, if you run your business from commercial premises, you can keep them for the duration of the temporary suspension of your activity.
However, you should pay close attention to the clauses in your commercial lease. There may be a clause governing the uninterrupted operation of the business. If this is the case, your landlord may decide to terminate the commercial lease. You will then be obliged to relocate your micro-business to a new address.
No need to panic! You can choose to domicile your micro-business using the services of a domiciliation company like SeDomicilier. All you have to do is choose the address that suits you best, and all the formalities are carried out online.
What happens at the end of the mothballing period?
In principle, the temporary suspension of your activity cannot exceed one year. However, if you have a commercial activity, it is possible to extend the period of inactivity of your micro-business for a further year. But what happens at the end of this period?
Reactivating your micro-business
At the end of the temporary cessation period, the first option open to you is to reactivate your micro-enterprise. This option is only available if your activity is of a commercial nature.
To reactivate it, you need to make a declaration to inform the administration. To do this, you simply need to declare the resumption of activity by making an amending registration on the guichet unique website. This formality costs an average of €70.
Deregistration of your micro-business
Once the temporary suspension of your activity is over, the second option available to you is to cease trading definitively. To deregister your micro-business, you need to declare your cessation of activity on the Guichet unique website.
This procedure is free of charge and entails the definitive deregistration of your micro-business. In other words, you put an end to your activity.
But when should a micro-entrepreneur close his or her auto-entreprise? A micro-entrepreneur may have to cease his activity for various reasons: taking up a salaried job, financial difficulties...
Selling your micro-business
A final option may be considered if you do not wish to resume your activity or close your micro-business.
All you have to do is sell your self-employed company or your business (or craft business).
Finally, please note that the time limit for temporary cessation of activity must be strictly observed. Failure to do so may result in automatic deregistration.
Now you know how to mothball your micro-business without having to deregister it!
Written by our expert Solenne
May 2, 2024
