Associated files

Which articles of association for what business?

Identifying whether a company's business is commercial or 'civile' (non-commercial) in nature is a preliminary step that is essential when determining its legal form as well as its social security and tax regime. It is only after identifying this, that the business owner may choose the legal form most appropriate to his/her project.

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File : Mothballing a company

Part 2

Operating during the mothballed phase

Why should a company be mothballed?

The company's activity is suspended; however the company is not dissolved.

Operating the company during the mothballed phase

During the mothballed period, the legal entity continues to exist and preserves its registration. It does not carry out its activities; however it continues to operate normally on the administrative level. Under this framework, the legal representative, after the end of each fiscal year, is among other things under obligation to draw up and close annual accounts, and should he not be competent himself, call in the duly authorised body to approve them.

Good to know: A company whose activities have been suspended may run the risk of having its commercial lease cancelled or not renewed should the latter contain a clause requiring that personal operation of the business be continuous. During the mothball period, the company may, among other things, be domiciled with a domiciliation company (with a signed domiciliation contract).

Operating the individual business during the mothballed phase

During the mothball period, the individual commercial business remains registered but does not carry out its activities. In the event of definitive closing down after commercial activity (especially in the case of sale of the goodwill without creating a new activity) during the first year of mothballing, the renewal for a new one-year mothballed period no longer applies.
An individual company whose activities have been suspended may run the risk of having its commercial lease cancelled or not renewed should the latter contain a clause requiring that personal operation of the business be continuous.
During the mothball period, the an individual business may, among other things, be domiciled with a domiciliation company (with a signed domiciliation contract) or at the trader's personal domicile.

Good to know: only physical persons registered with the RCS or in the directory of trades may draw up a domiciliary contract with a joint domiciliary company.