Liquidation of a company/sole proprietorship in the Czech Republic
Due to the fact that owning a business in the European Union provides a variety of the opportunities, a lot of foreigners tend to register a company in the Czech Republic. Statistics says that one-third of all the Czech companies have been set up by foreign people. However, there are situations that make business owners to liquidate the enterprise in the Republic. Usually it happens because of the following reasons:
- unsuccessful business development;
- lack of the profit;
- denial of issuance a business visa based on the existence of a registered company in the Czech Republic.
Foreign sole proprietors face the same issues. In the scopes of workflow there may occur a situation when it is necessary to stop taking part in a business.
There are two ways to liquidate the business for sole proprietors:
- to delay the activity;
- to cancel it.
If a foreign sole trader resides in the Czech Republic on the basis of a temporary residence permit issued for business purposes then at the moment of the delay or conclusion of the license the visa automatically expires.
The first option means timely delay of the proprietorship with the possibility of renewal it in future.
It is allowed to delay the sole proprietorship in the Czech Republic for the unlimited time period. The Social fund that accepts monthly taxes from a trader must be informed till the 8th day of the following month. Tax inspectorate must be notified within 15 days period. In case a foreigner obtains the permanent residence permit, he/she is obliged to advise the Medical fund of state insurance during 8 days after the delay.
All the changes must be declared in the written form or via the online service «Datová schránka» (Czech portal for proprietors – institutions communication).
The second option implies the full stop of the activity. In this case one must appeal to the Sole proprietorship department. In the scopes of this procedure the Social and Medical funds are notified automatically, still there is a need to inform the Tax inspectorate separately.
It is worth paying attention that the proprietorship must be stopped also from the accounting side. It means adjustment of debts, analysis and decision regarding the property involved in a business, declaration of the profit and so on. All these questions can be solved with the assistance of a qualified accountant or, in some cases, a tax consultant. Anyhow, please keep in mind that it is necessary to submit a tax declaration for the last year of the entrepreneurial activity.
Activity of a Czech company cannot be delayed.
A founder of the enterprise may perform the full stop of the own rights and obligations following two possible scenarios:
1) liquidation of a company;
2) re-registration of a company specifying another founder or a group of founders.
There are voluntary and involuntary liquidation. A company may be forced to involuntary liquidation if a controlling institution has irresistible pretensions that make the further activity of a company impossible. The process of liquidation involves financial, notary and liquidator expenses, covering the penalty and so forth. Managers and founders of such a company are obliged to pay for all outstanding accounts.
Much more reliable means of the liquidation is the voluntary one. Closing a company is a complicated process linked with gathering and submitting various documents to the state institutions. The sense of the procedure is to prove the absence of debts to the state organs.
In this case a founder manages the process and covers possible expenses. The proper performance of this procedure is the guarantee that there will be no court prosecution of the proprietor in future.
The process of re-registration of a company is more cost-effective. It is necessary to find potential new owners of the company either by one’s own efforts or with our assistance and to cover a little sum in order to complete bearing responsibilities in the company.
|Service||SERVICE PRICE W/O TARIFF, KORUNAS||PRICE WITH TARIFF, KORUNAS|
|Delay/full stop of a sole proprietorship||6000 CZK||5000 CZK|
|Voluntary liquidation of a company||from 2500 EUR||from 2000 EUR|
|Re-registration of a company||18000 CZK||15000 CZK|
Due to having profound experience our employees assist with all the procedures associated with delay of business activity, liquidation or re-registration a company for other entities. We handle situations of any complexity. Feel free to contact us via chat or the phone number +420 225 850 207.