TLDR: A real change in business activity for a micro-entrepreneur leads to the cessation of the business if the legal criteria are met (exceeding thresholds on turnover, workforce, or fixed assets, or transfer of more than 50% of voting rights). The declaration of cessation must be filed within 30 days (60 days for businesses under the simplified tax regime).
Definition of change in business activity
A real change in business activity is characterized by a modification of the corporate purpose or the effective activity. It may also occur in the event of disappearance of the production means necessary for continuing operations for more than twelve months, except in cases of force majeure or if this disappearance is followed by a transfer of the majority of the company's shares.
Characterization criteria
The change in activity is established as soon as one or more thresholds are exceeded:
- Transfer of more than 50% of the voting rights attached to the company's shares. In the case of staggered transfers, the condition is met from the date on which the 50% threshold is crossed.
- Increase of more than 50% in turnover, or in the average workforce and in gross fixed assets compared to the previous financial year.
- The change may result solely from the variation in turnover, but not from the sole variation in workforce or fixed assets.
If the company has management tools proving that part of the increase in thresholds is linked to the pre-existing activity, this part is not considered when assessing the change.
Declaration obligations
In the event of transfer or cessation of activity, you must file a declaration within a period of 30 days. This period is extended to 60 days for companies subject to the simplified tax regime.
Tax consequences
A change in activity resulting in the cessation of the business leads to the loss of the carry-forward of losses incurred before the change against profits made subsequently.
Special cases
The change in activity is not established if the increase in turnover is less than 50% and only the gross fixed assets have increased by more than 50%.
Exclusions
Variations linked solely to workforce or fixed assets are not sufficient to characterize a change in activity.