How to close an individual entrepreneur and avoid debts

1. Collect debts

If customers have not fully paid you off, you should worry about this in advance. When you close the sole proprietor and the settlement 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 service finds out about it, it may consider what is happening illegal entrepreneurship. So collect work debts while you have the status of an individual entrepreneur.

2. Pay off contractors and contractors

The closure of the sole proprietor does not relieve the businessman of obligations on debts. They can still be exterminated from him, though already as from an individual. If creditors bring the case to court and win it, then bailiffs will describe personal property and freeze accounts. The prospect is bleak, so you need to pay.

And it's better to do this before closing the sole proprietor and the settlement account — so that you don't have to come up with clever money transfer schemes.

3. Dismiss employees

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

• Notify the employment service about the decision to close the sole proprietor and about upcoming dismissals. Transfer to the department the data of employees who will lose their jobs.
• Inform colleagues about the dismissal in writing under the signature two weeks before day X, unless the employment contract provides otherwise.
• Prepare an order on termination of an employment contract with an employee in connection with the closure of an individual entrepreneur. Record the data about the document in the log of registration of orders for personnel. To familiarize the employee with the paper — under the signature.
• Make a note‑calculation, according to which all financial issues with the dismissed person will be resolved.
• Make entries about the termination of the employment contract in the work book and the employee's personal file.
• Pay him off. Give him the following documents: a pay slip; a work record book, if they continued to keep it in paper form, an extract from an electronic work record, if not; a certificate of income for the last year and the previous two — for calculating sick leave and benefits; certificates in the forms of SSV‑M and SSV‑LENGTH of service; an extract from section 3 "Personalized information about insured persons" calculation of insurance premiums.

After that, it will be necessary to pay insurance premiums for employees — they must be transferred within 15 days. You can read more in a separate material of the Life Hacker. Then you need to submit reports:

• to the tax service — 6‑personal income tax and calculation on 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 CV‑M, CV‑EXPERIENCE and CV-TD Resolution of the Board of the PF of the Russian Federation No. 730p dated December 25, 2019 "On approval of the form and format of information on the employment of a registered person, as well as the procedure for filling in the forms of the specified information" .

4. De‑register the online sales register

To the tax service, you need to provide:

• statement on the removal of cash register equipment from registration with an indication of the reason;
• report on the closure of the fiscal storage.

You can do this through the website of the tax service or in person. Keep in mind: to submit documents remotely, you need an electronic signature. If the old one is already invalid, you will have to pay for getting a new one, so it will be cheaper to go to the inspection yourself.

The tax service has 10 days to remove the cash register from the register.

5. Pay the state fee for closing the IP

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

6. Submit documents for closing an individual entrepreneur to the tax service

You need to contact the inspection of the Federal Tax Service, where you registered IP, and pass:

• application for the removal of an individual entrepreneur from the register;
• receipt of payment of state duty;
• optional — a document confirming the submission of information about an individual personal account and insurance premiums to the FIU (the tax service can request the data independently).

This can be done:

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

7. Take the documents on the closure of the sole proprietor from the tax

On the sixth working day after submitting the documents, you will be able to pick up the EGRIP record sheet (Unified State Register of Sole Proprietors) on registration of termination of entrepreneurial activity. 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 refused to close the IP, you will receive a document with the reason for this. Perhaps there are mistakes in the papers. We'll have to redo everything and contact the inspection again.

8. Close the current account

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

9. Pay insurance 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 closure of the sole proprietor to resolve this issue. Contributions are calculated based on the months and days actually worked.

10. Submit a declaration and pay taxes

Here a lot depends on the chosen taxation system.

• If you're on a patent, you don't have to do anything. But you can recalculate its cost in proportion to the time worked and ask to return the overpaid.
• If you have a simplified system, you need to pay taxes and submit a declaration by the 25th of the month following the closing date of the sole proprietor.
• If you are on the general taxation system, the declaration 3‑personal income tax is filed within five days from the date of closure of the sole proprietor, the VAT declaration — no later than the 25th day of the month following the quarter in which you closed the sole proprietor. Taxes can be paid at once or in three installments during the quarter.

11. Collect all the documents and put them in a safe place

If you have closed the sole proprietor, this does not mean that all documents can be solemnly burned and the ashes scattered to the wind. The papers will have to be stored, and some of them for quite a long time. For example, accounting documents (contracts, invoices, etc.) basically cannot be disposed of for 5 years. And some personnel (and not only) — up to 75 years. To find out the exact terms for each type of paper, it is better to study the corresponding order Rosarchiv Order No. 236 dated December 20, 2019 "On approval of the List of standard administrative archival documents formed in the course of the activities of state bodies, Local Self-government bodies and organizations, indicating the terms of their storage" Rosarchiv.