Entrepreneur's leave - or maybe a suspension of activity?
When entrepreneurs go on vacation, they have to consider who will manage the company during their absence. It is possible to appoint a representative who will conduct the business on behalf of the owner and will make all decisions for him, but this involves additional costs. An alternative to this solution is the suspension of business activity. However, it should be remembered that not everyone can exercise this right. Read how an entrepreneur's leave can be formally terminated.
Entrepreneur's leave - who can suspend business activity
Only an entrepreneur who does not employ any employees may suspend business activity. Employees are persons employed on the basis of an employment contract, appointment, election, appointment or a cooperative employment contract. It should be remembered that people on maternity or parental leave are still employees. However, such status is not enjoyed by persons performing work on the basis of civil law contracts. This means that an entrepreneur who employs persons on the basis of a mandate contract or for a specific task may take advantage of the institution of suspension. So if employees are employed, the entrepreneur's leave in the form of suspension of activity is impossible.
In the case of running a company in the form of a civil law partnership, general partnership or partnership, all partners must suspend their activities.
Time of suspension of activity
The period of suspension is calculated in days, months or days and months. Business activity may not be suspended for a period shorter than one month and not longer than 24 months. The suspension of the activity starts from the date indicated in the application, but not earlier than on the date of submitting the application. The suspension lasts until an application for resumption of business is submitted.
The above regulations mean that an entrepreneur who wants to go on, for example, a week's vacation, cannot suspend his business. In this case, he should appoint an attorney who will take over the duties in his absence. Thus, the entrepreneur's two-week leave is impossible to combine with the suspension of activity.
The suspension of business activity takes place on the basis of an application submitted by the entrepreneur. Such notification is made on the CEIDG-1 form. In the case of civil partnerships, it is necessary to complete the CEIDG-SC appendix. The date on the application is also the date of suspension of activity. The CEIDG -1 application may be submitted as follows:
- in person at the Commune Office - it is necessary to present an ID card,
- by an attorney - in this case, a fee for the power of attorney must be paid - PLN 17. The power of attorney granted to the spouse, ascendant (parents, grandparents) or descendant (children, grandchildren) is exempt from fees,
- by letter - then the signature must be notarized and the document certifying it should be attached to the application,
- electronically - using an electronic signature verified with a qualified certificate, a signature confirmed by a trusted e-PUAP profile, a personal signature referred to in the provisions on ID cards or otherwise accepted by the CEIDG system, enabling unambiguous identification of the person submitting the application and the time of its submission .
The entrepreneur himself receives a copy of the submitted application with information about the suspension of business activity. Within 3 days of making an entry about the suspension, the commune office is obliged to send the data from the application together with its original to the competent tax office, statistical office and ZUS or KRUS (in order to deregister from contributions).
Rights and obligations during the suspension period
During the period of suspension of activity, the entrepreneur cannot perform economic activity and derive income from it. He may also not, on the basis of a mandate or specific work contract, provide services that also fall within the scope of suspended economic activity. During the suspension period, the taxpayer cannot make depreciation write-offs on fixed assets. This prohibition results from the act on personal income tax, which regulates that assets not used due to the suspension of economic activity are not subject to depreciation. Copies are not made from the month following the month in which the activity was suspended.
In addition, according to the Freedom of Economic Activity Act, an entrepreneur is entitled to perform certain types of activities and is also required to fulfill certain obligations. Based on Article. 14a paragraph. 4 above of the Act, during the suspension period, the entrepreneur:
- has the right to perform all activities necessary to maintain or secure the source of income,
- has the right to accept receivables or the obligation to settle liabilities arising before the date of suspension of business activities,
- has the right to sell its own fixed assets and equipment,
- has the right or obligation to participate in court proceedings, tax and administrative proceedings related to business activity performed before its suspension,
- performs all obligations prescribed by law,
- has the right to earn financial income, also from activities conducted before the suspension of its performance,
- may be inspected on the terms provided for entrepreneurs engaged in business activity.
Entrepreneur's leave - taxes and fees during the suspension period
In the event of a suspension of business activity, taxpayers are not required to submit VAT-7 / VAT-7K returns for the accounting periods affected by the suspension. The exception is when the taxpayer obtains income during the suspension period, e.g. from the sale of fixed assets. Then he is obliged to submit a VAT declaration.
The exemption from the obligation to submit VAT declarations also does not apply to:
- taxpayers who make intra-Community acquisitions of goods,
- taxpayers who import services or purchase goods for which they are a taxpayer,
- billing periods in which the suspension of business activity did not apply to the full billing period,
- tax periods for which the taxpayer is obliged to correct the input tax.
Moreover, taxpayers, during the period of suspension of their activity, are not obliged to pay advances on income tax. The advance resulting from the sale of the company's equipment or fixed asset should be paid in the first period after resuming business activity. Annual declarations must be submitted to the Tax Office in due time. During the period of suspension of operations, you should normally keep the KPiR (or revenue record in the case of a lump sum).
During the suspension period, the entrepreneur does not have to pay obligatory social and health insurance contributions to ZUS. However, it may voluntarily be covered by the old-age and disability pension insurance. The entrepreneur should remember, however, that under no circumstances may he be covered by health and accident insurance on a voluntary basis. His health insurance is expiring. After 30 days, when the insurance expires, the taxpayer should:
- conclude a contract with the NFZ and insure voluntarily (he must report to ZUS with this contract),
- take advantage of your spouse's health insurance (if any).
The entrepreneur's vacation has ended, i.e. resumption of activity
An entrepreneur's leave ends sometime and then, when returning to his duties, it is necessary to resume business activity. The resumption of activity is carried out, just like its suspension, on the CEIDG-1 form. The application should be submitted before the expiry of the period for which the entrepreneur has suspended the business activity. The entrepreneur has the right to resume activity before the expiry of the period for which he declared to suspend this activity. The date of the renewal may be later than the date of submission of the application, but it may not be earlier. Failure to submit an application for the resumption of business activity before the expiry of 24 months will result in the entrepreneur being removed from office. However, the commune is obliged to inform the entrepreneur about the date of resumption of activity. This information is provided by means of an appropriate request, in which the commune sets an additional 30-day period for the resumption of activity.