Closing your sole proprietorship: 3 steps
Close your sole proprietorship in 3 easy steps. If you would like more support, you can count on us at every step.
Tip: Provide us with this information through the Entrepreneur Portal in MySecurex.
1. Unsubscribe from the Crossroads Bank for Enterprises (CBE/KBO)
Unsubscribe from the Crossroads Bank for Enterprises (CBE/KBO): do so in the month following full termination of your business.
2. Notify the VAT administration
Notify the VAT administration that you are closing your business: report it to the business counter in the month after closing, and they will take care of the rest.
3. Unsubscribe from the social insurance fund
Unsubscribe from the social insurance fund: within 15 days of receiving proof of your de-registration from the Crossroads Bank for Enterprises, you should unsubscribe your business from your social insurance fund.
Closing your company: dissolution and liquidation
If your business activities are conducted through a company, you will need to close the company in 2 distinct phases: begin by dissolving your company, and then proceed the liquidation.
You have several options depending on your situation, so be sure to take advice from the Securex business counter. We are here to assist all entrepreneurs, be they clients of ours or otherwise.
Dissolution
Dissolution means agreement by the partners to liquidate the company and appoint an administrator to take care of the process.
Liquidation
Liquidation means selling the company's assets to repay any monies owed. What if there is money left? After completion, it is distributed among the partners as set out in the company's articles of association. Afterwards, inform your business counter that you have closed your business.
Turbo-liquidation?
You can combine dissolution with liquidation as a single procedure at the notary's office or privately if your company meets certain conditions. This is known as a single-deed dissolution and administration or ‘turbo-liquidation.
The advantage with this simplified procedure is that you can close your company quickly and have one less deed to pay for.
What about your social contributions?
After the dissolution and liquidation of your company, it is essential for you and your partners to stop paying your social contributions. Unless, of course, you are still involved in another company or sole proprietorship. Make sure that you also notify your social insurance fund.
Closing your business when you have employees
What if you have employees? Send a declaration of cessation of business along with supporting documents to your social secretariat. Your next course of action depends on the number of employees you have.
For instance, if you employ more than 5 workers, you will need to give them severance pay in addition to a fixed closure allowance based on their age and length of service. If you have more than 20 employees, additional actions will be required.
More information can be found on the website for the Federal Public Service Employment, Labour and Social Dialogue (FOD WASO), but be sure to seek advice from the experts at our social secretariat.
Lastly, end your registration with the National Social Security Office (NSSO/RSZ): notify them of the departure of your last employee in the month following the quarter in which you no longer have any employees. Are you a Securex client? Notify us of the date of ceasing business, and we will take care of the NSSO formalities for you.
Tip: Do not forget to cancel your insurance policies (such as industrial accident insurance).
Stopping self-employment: what about your social status?
The further evolution of your social status depends on the reasons why you have stopped being self-employed. The government has set several specific reasons for stopping, each with its own conditions.
You stop voluntarily
The government considers your stoppage as voluntary if you wish to retire or simply wish to take a new path. If you stop being self-employed voluntarily, you can opt for continued insurance through your social insurance fund. This way, you maintain the rights related to your social statute (medical care, pension, replacement income) until you find work again.
Economic hardship or bankruptcy
If your business is in a difficult financial situation, you can close it due to economic hardship. In such cases, you are usually entitled to support measures, such as the bridging right described below.
Force Majeure
Force majeure includes events that force you to close your business, such as:
- Natural disasters
- Fire
- Damage to your business premises or equipment
- Allergy caused by your activity
- Economic impact on your business caused by a third party or event
The latter category is distinct from economic hardship because it refers specifically to unforeseen problems beyond your control. All other reasons for economic hardship fall under the previous point.
Neither does closing your business due to illness count as force majeure, unless it involves a sudden allergy caused by your activity. For all other illnesses and cases of incapacity for work, you rely on your social contributions and insurance cover.
Bridging right
If you close your business due to force majeure or economic hardship, you can claim the bridging right:
- You retain your social benefits (healthcare and incapacity for work benefits)
- You are exempt from social contributions
- For exact entitlements and more details on the bridging right see Lex4You
The benefit entitlement period begins on the first day of the month following the month in which you closed your business and lasts for a maximum of 12 months.
Closure due to bankruptcy
Facing hard times? If you are self-employed, it is best to inform your accountant and social insurance fund. You may be eligible for exemption from late payment penalties on your quarterly contributions. Remember that after a bankruptcy or business closure, you have one month to cancel your registration with the Crossroads Bank for Enterprises.
For companies, it is also crucial to register the cessation of business activities or bankruptcy with the registrar of the commercial court.
Alternatives to closing your business
Are you certain that closing your business cannot be avoided? Depending on your situation, there may be alternatives that you haven't yet considered.
Tip: If you are facing temporary financial difficulties, there are a number of points worth considering.
Transfer your business and/or commercial establishment
If they find themselves in difficulty, entrepreneurs can transfer their business or commercial establishment (customers, equipment, ongoing contracts, …). However, the process of transferring a business is not quick. It is best to commence in time. Produce a balance sheet, estimate the value of your business and search for a potential buyer.
Choose a new professional path
Seek career guidance to map out your skills, but most importantly, your professional ambitions. Would you like to retrain as a self-employed person and offer new services, or explore an entirely new sector? Make sure to adjust the NACE codes (an official European list of activity descriptions) in relation to your activity. Depending on your NACE code, you may be entitled to regional subsidies.
Switch to part-time employment
You always have the option of paid employment alongside your self-employment. The advantage is that this can boost your finances and/or won't leave you relying solely on your own business for income.
However, your status will probably change from self-employed in a main activity to a secondary activity, meaning that the income from your self-employment will be more heavily taxed. For that reason, make sure you keep your accountant and social insurance fund informed.