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Deletion of a Sole proprietorship (SP) – how to do it?


In most cases, the deletion of a sole proprietorship is requested by the heirs of a deceased sole trader. If none of them wants to take over the business of the sole trader after his death, the name of the sole trader must be deleted from the commercial register. Another reason to propose the deletion of a SP is the appointment of the sole trader as a civil servant. The sole trader may also choose to suspend their activity for financial reasons or retirement and apply for removal from the commercial register. Due to the fact that SP is a form with high risk,  people choose to terminate their business as SP.  And their next step is to register an spLTD or LTD depending on your needs.

Deletion of a SP, similar to the closure of a company, is a multi-stage procedure. The only way for an individual to get rid of the quality of a trader is to delete the sole proprietorship. This is because there isn`t a way to transfer sole proprietorship ‘s business to someone else. The transfer is made under Art. 15 of the CA. It controls the transaction as a transfer of the enterprise as a set of rights, obligations and factual relations. The transferor is not exempt from the quality trader. In other words, the individual continues to be a trader and his company as a sole proprietor continues to exist.

In short, the transfer of a SP means that the successor receives the business of this company – licenses, permits, contracts, etc. However, the transferor continues to exist in legal reality as a sole trader.

We tell you all this, because we often receive inquiries from customers who want to get rid of their companies as a sole proprietorship, transferring them to another person. But as we have clarified, this is impossible. In order to achieve this goal, it is necessary to move to the deletion of a SP.

Procedure for deletion of a sole proprietorship

Unlike the procedure for capital companies, here it is not necessary to take decisions of management bodies in case of deletion of a sole proprietorship, as there are none. In case of deletion of a sole proprietorship, no liquidation procedure is carried out!

The sole trader submits to the National Social Security Institute personally or through a proxy an application-declaration according to a sample form for issuing a certificate for handing over the payrolls. This, as well as other employment documents such as employment contracts, orders for appointment, reassignment and termination of employment contracts, additional agreements and applications for unpaid leave for more than one month, must be submitted to the NSSI if the sole proprietorship was active and had employees.

As of January 2018, notifying the NRA is no longer required before deleting a SP In view of this, a certificate under Art. 77 of the TSSPC for entering the deletion in the Commercial Register.

If the sole proprietorship is registered for VAT, the NRA will officially cancel the registration if the natural person – sole proprietor dies. In this circumstance it is irrelevant whether the sole proprietor has been deleted from the commercial register.

In case of deletion of a sole proprietorship for any other reason, an application for VAT deregistration must be submitted. It shoud be done within 14 days from the deletion of a sole proprietorship from the commercial register.

Necessary documents for entering the deletion of a sole proprietorship in the Commercial Register:

  1. Statement A1 as per a sample;
  2. Decision of the sole trader;
  3. Certificate under Art. 5, para. 10 of CSR, issued by NSSI;
  4. Declaration under Art. 13, para. 4 of CA;
  5. Declaration under Art. 13, para. 5 of CA
  6. Power of attorney, if the documents are submitted by a proxy;
  7. Document for paid state fee.

* In case the deletion of a SP is requested by the heirs of the deceased sole trader, the death certificate and the certificate of heirs are attached to the documents.

If you want to quickly and easily delete your company, T&G Consulting offers the service of deletion of a sole proprietorship.