Business Closure and Suspension

How is the process to close my company and what it costs?

To close a company, it will be necessary to go through a liquidation and closure process, which will have to be mandatorily registered at the Registry Office, just like the incorporation process. In this settlement and closure process, the accounting records of the operation will also be made, as well as the relevant tax returns for the current fiscal year. The closure of the company will only be effective after registration with the Registry Office.

When should I submit a declaration of cessation of VAT-liable business activity to the Tax Office? That means that my company no longer exists?

You should only submit the declaration of cessation of activity when you intend to keep your company open but know there will be no activity for an extended period, meaning no revenue or expenses during that time. This does not mean your company has ceased to exist; it simply means it is not active.

Can I put my company 'on hold'? How it works? What is the difference between 'on hold' and close company? What is the costs?

Yes, you can suspend your company's activity at any time and it is usually used when the company will be inactive for a long period and it is expected to reactivate in the future. In terms of taxes, suspending the company's activity is limited to the level of VAT and is formalized through a change of activity made by its accountant. If there are occurrences that lead the company to make profits, these will be taxed normally in terms of income tax. During the period in which the company has its activity suspended, it will not be able to issue any invoice, nor even have expenses, that is, not carry out any commercial transaction. However, it will continue to have the tax obligation to submit the annual accounts, including IES and Model 22 declarations. If one day you want or can restart your activity, your accountant will only have to submit a new declaration of activity to the Tax Authority and there you will be able to restart your activity. The big difference between the suspension of activity and the closure of the company is that the suspension of activity is always temporary, maintaining the existence of the company. The closure of the company implies the termination of the company and its definitive disappearance.