How to close a sole proprietorship and avoid debt

1. Collect debt

If customers have not fully settled with you, you should worry about this in advance. When you close the individual entrepreneur and the current account with which you worked as an entrepreneur, it will not be easy to get old debts. You will have to come up with alternative ways to transfer money, for example, to your personal card. But if the tax office finds out about this, it may consider what is happening as illegal business. So collect working debts while you have IP status.

2. Settle accounts with contractors and contractors

Closing an IP does not relieve a businessman of obligations for debts. They can still be claimed from him, though already as from an individual. If creditors bring the case to court and win it, the bailiffs will describe personal property and freeze accounts. The prospect is bleak, so you have to pay.

And it’s better to do this before closing the IP and the current account, so that you don’t have to come up with ingenious schemes for transferring money.

3. Fire workers

Of course, this step is necessary only if the entrepreneur has employees. You will have to do the following:

  • Notify the employment service of the decision to close the IP and the upcoming layoffs . Transfer the data of employees who will lose their jobs to the department.
  • Notify colleagues of the dismissal in writing against signature two weeks before day X, unless otherwise provided by the employment contract .
  • Prepare an order to terminate the employment contract with the employee in connection with the closure of the IP. Record data about the document in the register of orders for personnel. Familiarize the employee with the paper – under the signature.
  • Draw up a note-calculation , in accordance with which all financial issues with the dismissed person will be resolved.
  • Make entries on the termination of the employment contract in the work book and personal file of the employee.
  • Settle with him. Give him documents: pay slip; a work book, if they continued to keep it in paper form, an extract from an electronic work book, if not; a certificate of income for the last year and the previous two – for calculating sick leave and benefits; certificates on forms SZV‑M and SZV‑STAZH; an extract from section 3 “Personalized information about the insured persons” of the calculation of insurance premiums.

After that, it remains to pay insurance premiums for employees – they must be transferred within 15 days. You can read more in a separate article by Lifehacker. Then you need to submit reports:

  • to the tax office – 6‑personal income tax and calculation of insurance premiums;
  • to the Social Insurance Fund – calculation of accrued and paid insurance premiums in the form 4-FSS ;
  • to the Pension Fund – information about insured persons in the forms SZV‑M , SZV‑STAZH and SZV-TD .

4. Deregister online checkout

You must submit to the tax office:

  • an application for the removal of cash register equipment from registration, indicating the reason;
  • report on the closing of the fiscal accumulator.

This can be done through the tax website or in person. Keep in mind: to submit documents remotely, you need an electronic signature . If the old one is no longer valid, you will have to pay to get a new one, so it will be cheaper to go to the inspection yourself.

The tax office has 10 days to deregister the cash register.

5. Pay the state duty for closing an IP

You will have to pay 160 rubles for the procedure. Payment can be generated on the website of the Federal Tax Service, money can be deposited through the website or through a bank. The payment receipt will come in handy in the next step.

6. Submit documents for closing the IP to the tax

You need to contact the FTS inspectorate where you registered the individual entrepreneur and transfer:

  • an application for deregistration of an individual entrepreneur;
  • receipt of payment of state duty;
  • optionally – a document confirming the submission of information about an individual personal account and insurance premiums to the FIU (the tax office may request data on its own).

It can be done:

  • in person at the tax office or through a multifunctional center;
  • through an intermediary with a notarized power of attorney in the tax or MFC;
  • through the website of the Federal Tax Service;
  • by mail (a valuable letter with a description of the attachment and a notarized signature on the application).

7. Take the documents on the closure of the IP from the tax

On the sixth working day after submitting the documents, you will be able to pick up the EGRIP (Unified State Register of IP) record sheet on registration of termination of business activities. When submitting through the MFC, the process will take 11 days: the time for transporting documents to the tax office and back is added to the deadline.

If you are denied the closure of the IP, you will receive a document with the reason for this. Perhaps there are errors in the papers. We’ll have to redo everything and go to the inspection again.

8. Close your current account

Contact your bank. There you will be guided on how to apply for closing a current account. If there is money left on it, they will give it to you – it is not necessary to clear all the funds in advance.

9. Pay your premiums

We are talking about contributions to pension and compulsory health insurance for yourself. You have 15 days from the date of registration of the IP closing to resolve this issue. Contributions are calculated based on the actual months and days worked.

10. File your return and pay your taxes

Here much depends on the chosen system of the taxation .

  • If you are on a patent, you do not need to do anything. But you can recalculate its cost in proportion to the time worked and ask for a refund of the overpaid.
  • If you have a simplified system, you need to pay taxes and submit a declaration before the 25th day of the month following the closing date of the IP.
  • If you are on the general taxation system, the 3-NDFL declaration is submitted within five days from the date of closing the IP, the VAT return – no later than the 25th day of the month following the quarter in which you closed the IP. Taxes can be paid all at once or in three installments during the quarter.

11. Collect all documents and put in a safe place

If you closed the IP, this does not mean that all documents can be solemnly burned, and the ashes scattered in the wind. Papers will have to be stored , and some for quite a long time. For example, accounting documents (contracts, invoices, and so on) generally cannot be disposed of for 5 years. And some personnel (and not only) – up to 75 years. To find out the exact dates for each type of paper, it is better to study the corresponding order of the Federal Archive.

This article was first published in November 2019. In August 2022, we updated the text.

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