what is a company suspension, when you can suspend it, what can a suspended company do, taxes and ZUS during the suspension, childcare during the suspension, other issues related to company suspension
If you have temporary problems with the payment of social security contributions, tax advances or e.g. for personal reasons you cannot devote yourself to the company's affairs, you can suspend your activity.
- if you run a sole trader registered with CEIDG (or you are a partner registered with CEIDG in a civil law partnership), you may suspend your activity indefinitely (but for at least 30 days)
- a company registered in the National Court Register may be suspended for a maximum period of 24 months
If you raise a child and suspend your company, you can use the budget to finance your insurance contributions in the Social Insurance Institution (ZUS). You can take advantage of this relief for 3 years (you can divide this period).
Benefits of company suspension
- you do not have to pay contributions to the Social Insurance Institution and submit ZUS declarations (you can apply for insurance voluntarily)
- you do not have to pay any income tax advances or submit a VAT return (if you do not carry out any VAT transactions during this time)
- while you may not be able to conduct activity, you have the right to do business that is necessary to maintain or secure sources of income. For example, you can accept receivables from contracts concluded before the suspension or sell goods you have previously ordered.
Disadvantages of company suspension
- during the suspension you are not allowed to run activity and earn current revenues
- you lose your right to health, sickness and accident insurance
- the suspension is counted towards the period of a small ZUS, although you will not be able to use it
- the period of cessation of activity shall not be counted towards years of service giving entitlement to pension
- your family members and co-workers will also be de-registered from the insurance system
- if you do not want to lose your benefits, you can apply voluntarily to the pension and health insurance - but then you will have to pay social security contributions. Voluntary registration is only possible if you have no other right to compulsory insurance (e.g. under a contract of mandate during the suspension of your activity). You cannot, however, pay sickness or accident insurance contributions (even voluntarily).
What you should be aware of before and after reporting suspension
You should prepare yourself properly before you report your suspension to the office.
Terminate contracts with employees
The condition necessary for the suspension is not to employ any employees (this applies to employees hired under a contract of employment, appointment, selection or cooperative contract of employment). You must terminate all employment contracts before you can report the suspension to the office. You do not need to do this if you are employed on a contract of mandate or a contract for a specific task. From April 30, 2018 you may also suspend your business even if your employees are on maternity leave or parental leave and they do not combine taking parental leave with working for the employer granting the leave. Previously, only entrepreneurs who did not employ employees (even if they were on maternity leave) were entitled to suspend their activity.
In the case of partnerships, complete the formalities before the suspension is reported
If a company registered in the National Court Register is suspended, a resolution on the suspension should be adopted by the partners of the partnership or the management board of the capital company before the application for suspension is submitted. Within 7 days from the adoption of the resolution, the suspension of activity must be reported to the National Court Register. Remember, that in a civil law partnership, all partners must suspend their activity.
Think about when you want to suspend your business
Before applying for suspension of your business, consider the date you want to suspend your business. You can do it on any day, however, remember that if you suspend your activity during the month (e.g. at the end of the month), you will have to pay a full health contribution for the whole month and submit two ZUS declarations (for incomplete and for the next full month). You will pay your social security contributions in proportion to the number of days you have been active in a given month.
Think about whether you want to keep your insurance during the suspension period
During the suspension you do not pay any contributions, so you are not insured with the Social Insurance Institution (ZUS). If you want to pay your pension contributions and be entitled to health care, you can apply voluntarily to the insurance company (if you are not insured on different account, e.g. under an employment contract or mandate contract). The right to health benefits expires after 30 days from the date of termination of the period of health insurance coverage. During the suspension period, you cannot voluntarily register with the sickness and accident insurance scheme. The right to health services expires after 30 days from the date of termination of the period of health insurance coverage.
Arrange matters with contractors
Before suspending your business arrange all business matters in advance: terminate service contracts that you will not be using during the suspension period, inform your business partners of the suspension.
Notify the suspension to the Register of Entrepreneurs
If you are self-employed, report the suspension to CEIDG. In case of civil law partnership, in addition to reporting the suspension to CEIDG, you should inform the Central Statistical Office (reporting the changes to REGON). Suspension of other companies is reported to the National Court Register.
De-register your employees from the Social Insurance Institution (ZUS)
In case of suspension you should de-register yourself and your employees from the insurance in the Social Insurance Institution (ZUS).
Suspension and KRUS
If you are insured with KRUS and have your business suspended, you pay a single pension contribution (rather than a double contribution as in your activity). You are also under no obligation to submit a declaration by 31 May that you will not exceed last year's operating tax limit (although you are advised to do so on a voluntary basis).
Other issues after suspension
The suspension also affects other obligations concerning, among others, fiscal cash registers, subscriptions, or informing about the suspension of offices that have issued you, for example, a permit. See what you need to do and what you don't need to do when you suspend your activity.
Note: If you want to suspend your business and need help reporting the suspension, you can call 801 055 088 or 22 765 67 32.