Suspension of activity and signing documents

Service Business

Sometimes, the seasonal nature of the activities performed or limited financial liquidity forces entrepreneurs to suspend their business activities. It is a sure alternative for those who do not want to close the company when the times are harder to come. However, it is worth knowing what rights and obligations apply to such persons, because suspending the activity does not mean not performing any activities related to it. Therefore, does the taxpayer have the right to sign any documents related to the suspended company?

Suspension of business activity

The most important legal regulations regarding the suspension of the company's operations can be found in the Act of March 6, 2018, Entrepreneurs' Law. An entrepreneur not employing employees under an employment contract may suspend the activity for an indefinite or definite period of time, however, it may not be shorter than 30 days, as provided for in Art. 23 sec. 1 above the law. The suspension period starts on the date indicated in the CEIDG-1 application.

It should also be borne in mind that entrepreneurs who employ employees, where these employees are on maternity leave, parental leave or parental leave when their activity is suspended, may also suspend.

Art. 22 sec. 2 Entrepreneurs' law:

The right (...) may also be used by an entrepreneur who employs only employees who are on maternity leave, leave on the terms of maternity leave, parental leave or parental leave not combining the use of parental leave with the performance of work for the employer granting this leave.In the event of termination of the use of leaves or submission by an employee of an application to combine the use of parental leave with the performance of work for the employer granting this leave, the employee has the right to remuneration as for downtime, specified by the provisions of labor law, until the end of the suspension period.

In the case of a civil law partnership, its suspension is effective provided that it is notified by all partners. The period of suspension of business activity may last from 30 days to 24 months and begins on the date indicated in the application for entry into the National Court Register, but not earlier than on the date of submitting the application.

Suspension of activity and the preservation and security of income

As a rule, the suspension of activities prevents the performance of activities falling within the scope of the conducted company and the achievement of current income from non-agricultural business activities. Therefore, it is impossible to sell goods or provide services, and thus to issue documents, i.e. invoices or bills. This does not exclude the entrepreneur from bearing the costs of maintaining or securing the source of income, which in this case is the organization. These costs will be different for each entrepreneur, but in practice they are most often:

  • costs of maintaining the premises where the seat or place of business is located,
  • costs of maintaining bank accounts,
  • compulsory costs and fees to be paid even during the suspension period (e.g. real estate tax, perpetual usufruct fees, etc.).

Start a free 30-day trial period with no strings attached!

Rights and obligations and suspension of activity

During this period, he is also entitled to several rights and obligations, which are in particular:

  • the right to accept receivables or the obligation to settle liabilities that arose before the date of suspension of business activity,
  • the right to sell own fixed assets and equipment,
  • the right to obtain financial income, also from activities carried out before the suspension,
  • obligation to participate in court, tax and administrative proceedings related to activities performed before the suspension of the enterprise,
  • performing all activities prescribed by law.

There is also a possibility of subjecting a suspended enterprise to inspection in accordance with the rules provided for persons conducting economic activity. The inspection activities may be performed only after the inspector presents the official identity card and after the delivery of the authorization to perform the inspection of the given company. Importantly, the scope of the control cannot go beyond the scope specified in the authorization.

Therefore, referring to the above considerations, the entrepreneur, in the period of suspension of his business activity, can easily approve and sign documents that fall within the scope of his rights and obligations. This means that expenses for, inter alia, preserving or securing the source of income will not violate the conditions to which the suspension of business activity is subject.