Suspension of the company implies a break in its business activity.
During the period of suspension, the company should not undertake any activities related to its business activity, except for activities aimed at preserving or securing a source of income. Therefore, during the period of suspension, the limited liability company may only undertake activities that are intended to enable it to resume its business activities.
The rights and obligations of a company during suspension
During the suspension, the company may not carry out business activities or generate current income. However, it may carry out certain activities that will allow it to secure a source of income and function after resumption.
In particular, during the suspension, it may:
• accept receivables arising before the suspension,
• derive financial revenue from pre-suspension activities,
• dispose of own fixed assets and equipment,
• settle debts incurred prior to the suspension,
• perform activities necessary to preserve revenue,
• secure sources of income,
• appoint or dismiss a successor administrator.
In addition, during the period of suspension, the company is obliged to:
• participate in all proceedings: administrative, judicial, tax proceedings that concern the company,
• perform the duties prescribed by law,
• participate in inspections,
• submit an annual financial report,
• keep accounts,
• pay public and legal dues (e.g. property tax, tax on means of transport, environmental fees).
From the tax side, the most important benefit of the suspension is the exemption of the company from paying advance payments for income tax and submitting VAT returns. During the period of suspension of business activity, the limited liability company is exempt from the obligation to pay advance payments for CIT.
When can a limited liability company be suspended?
A commercial law company, i.e. a limited liability company, among others, may suspend its business activities:
- for any reason – temporary business problems, lack of expected results, lack of expected profitability,
- if it has no employees,
- the period of suspension is not less than 30 days and not more than 24 months.
How to suspend a limited liability company?
The moment of suspension begins on the date indicated in the application for suspension. It is filed with the KRS, but the start date cannot be earlier than the date of the application. This means that the activity cannot be suspended retroactively. The same rule applies to the resumption of activity – it cannot be earlier than the date of filing the application for resumption of activity.
Suspension of the activities of a commercial law company is made at the National Court Register, through the PRS (Court Register Portal). From the National Court Register, information is further transmitted to:
- CRP KEP – Central Register of Entities – National Register of Taxpayers,
- REGON register – National Official Register of National Economy Entities,
- ZUS – Social Insurance Institution – Central Register of Contributors.
As a result of this process, there is no need to separately report the existing situation of suspension or resumption of activity to the Central Statistical Office, tax office and de-register the company as a payer of ZUS contributions.
An important aspect to bear in mind when suspending a company is the adoption of a resolution to suspend the company.
In order to effectively suspend the activity, a resolution must be adopted by the management board of the limited liability company, which includes the KRS number, NIP number, address and information on how long the suspension of the company is expected to last.
There is no court fee for filing a request for suspension.
Information on the suspension or resumption of activity is not announced in the Court and Economic Monitor – it is placed in section 6 of the business registers.
Suspension of activity and employment of employees
Before the company reports the suspension of its activities to the KRS, all contracts with employees must be terminated:
- employment contracts,
- by appointment, election, appointment,
- cooperative employment contract.
It is not necessary to terminate contracts of mandate and contract for specific work.
The company may suspend its activities when its employees are:
- on maternity leave,
- on maternity leave, leave under conditions of maternity leave,
- parental leave or parental leave.
and do not combine the use of parental leave with work for the employer granting the leave.
Liabilities to ZUS
Thanks to the application submitted to the PRS, the suspension of the activity does not have to be notified separately to the Social Security. Deregistration of the company as a payer takes place automatically.
It should be remembered that a partner of a one-person limited liability company – must submit to ZUS a form like a payer and insured:
- ZUS ZWPA (deregistration of the premium payer)
- ZUS ZWUA (deregistration from insurance)
Tax liabilities
When a limited liability company suspends its business activities. – it shall pay no advance payments for the period of suspension.
Suspension of business activity does not release the company from the obligation to file an annual return. In the return, the company reports the period of suspension (item L.1.1 of the CIT-8 return).
During the suspension, assets that are not used as a result of the business suspension cannot be depreciated.
During the period of suspension of business activity, the limited liability company is not obliged to submit tax returns together with JPK records. This exemption applies only to full settlement periods, which means that a declaration must be filed for the period in which activity was conducted for even one day.
Suspension of the activity for at least 6 months results in removal from the VAT register. The suspension period is followed by re-registration without the need to submit a registration declaration.
There are several exceptions to the exemption from the obligation to file the JPK_V7M/JPK_V7K declaration during the suspension period. The obligation to submit the declaration will occur when, during the period of suspension:
• an intra-Community acquisition of goods, import of services, or acquisition of goods in connection with which the company is a VAT taxpayer occurs,
• a necessity arises to correct the VAT proportion (this applies to taxpayers who settle according to the proportion mechanism and are obliged to correct deducted input VAT in a declaration for the first settlement period of the following tax year),
• the company wants to exercise its right to deduct tax, e.g. for incurring the costs of term contracts, such as telephone subscription or rent of premises – submission of a declaration is a precondition for exercising the right to deduct tax,
• a need arises to correct any of the previous declarations – the exemption from the obligation to file a return does not apply to periods for which input tax must be corrected,
• activities will be performed for which a tax settlement obligation arises.
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