Every company, regardless of its economic activity, can face a situation where the business has to be suspended for some time of period or ceased entirely.
What should be done by owners and management of the company if business activities should be stopped for a while till potential business solutions are evaluated and decision on the company's future is made?
Entry in Commercial register
According to the Commercial Law, the merchant has the right to suspend voluntarily its economic activities on the basis of its decision. If such decision is taken, the suspension shall be applied for entry in the Commercial Register within 14 days after issuing the decision.
According to the Commercial Law (Section XIV 1), before merchant decides on suspension of business, the following criteria must be fulfilled:
The maximum period of temporary suspension is 3 years from the entry in the Commercial Register unless another suspension period is considered in the decision. The sSuspension period may not be specified in the decision. The entry in the Commercial register will be carried out automatically after a 3-year expiration unless the merchant has taken a decision on the renewal of activities before a 3-year expiry.
Starting from the date the entry of the merchant’s temporary suspension of activities is recorded in the Commercial Register, a note "suspension of economic activity" by encumbrance and "company’s application" as justification will be added at the company's profile in Lursoft, the business register database. Given that the company's business may be suspended by the decision of the State Revenue Service (SRS) or criminal proceeding, it will also be marked as "Suspension of economic activity" but reason the SRS or judicial decision.
Informing the SRS
According to the law "On Taxes and Duties" (Law on NN) if a decision on the company's temporary suspension of business is made according to the provisions of regulations, thye taxpayers obligation is to inform the SRS in writing within 10 days after the decision is issued.
However, it should be noted that the SRS regularly receives information from the Register of Enterprises of any changes with regard to the mandatory information to be entered in the commercial register, including records on merchant's decision to suspend business activities. Consequently, regardless of whether the taxpayer has informed the SRS about decision reached or not made, SRS will receive information from the Register of Enterprises and will take further action with regard to the company's exclusion from the VAT payer’s register (if registered) based on the information received from the Register of Enterprises.
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