Closing a Company: Dissolution, Amicable Liquidation and Deregistration (Step-by-Step)

Quick answer. A voluntary closure runs through dissolution voted by the shareholders, an amicable liquidation handled by a liquidator, then deregistration via the INPI single window. The liquidation profit (amounts distributed above contributions) is taxed for individual shareholders at the 31.4% flat tax (12.8% income tax + 18.6% social contributions in 2026) and bears the 2.5% transfer tax. A liquidation loss is not taxable. Plan for 12 to 18 months and from a few hundred to a few thousand euros in fees.

Voluntarily closing a company is a shareholder decision governed by the French Commercial Code (articles L237-1 onward). Unlike judicial liquidation — imposed in case of insolvency — amicable liquidation is a deliberate choice: intended cessation, no buyer, consolidation of entities, or a structure no longer needed. If a sale remains possible, first weigh the option of transferring rather than closing.

Since January 2023, all formalities (incorporation, amendment, closure) go through the single window for business formalities, run by INPI. This has clarified the steps and streamlined timelines.

Amicable liquidation is the phase during which a liquidator — appointed by the shareholders — realises the assets (sells inventory and equipment, collects receivables), settles the liabilities, then distributes the balance to the shareholders.

It differs from two neighbouring situations:

• closing a company quickly or placing it dormant: the company keeps its legal personality but stops trading, without selling assets or distributing reserves;
• simplified judicial liquidation: opened by the court when the company is insolvent.

Amicable liquidation is the most common and most tax-efficient form of closure.

1. Dissolution decision at an extraordinary general meeting (EGM). Shareholders vote the early dissolution, appoint a liquidator (often a chartered accountant or one of the shareholders) and set their powers. The decision is recorded in minutes.
2. Filing of the dissolution with the INPI single window, within one month of the EGM, with the minutes and the liquidator's appointment.
3. First legal notice (dissolution + liquidator appointment) in an authorised gazette of the registered-office district, which issues proof of publication.
4. Liquidation operations: the liquidator sells assets, collects receivables, settles liabilities (suppliers, banks, tax and social debts, costs) and keeps liquidation accounts. The company remains subject to VAT and filing obligations throughout.
5. Approval of the liquidation accounts at a closing meeting: final balance sheet, distribution of profit or recognition of loss, discharge of the liquidator.
6. Second legal notice (liquidation closure).
7. Deregistration with the registry, requested through the single window within one month of the closure notice. The company then legally ceases to exist.

Steps, timelines and costs#

Liquidation profit#

The liquidation profit is the difference between the net assets distributed and the real (or assimilated) contributions that shareholders reclaim tax-free. For an individual shareholder, it is treated as distributed income and taxed at the 31.4% flat tax in 2026: 12.8% income tax plus 18.6% social contributions (a 1.4-point increase enacted in the 2026 Social Security Financing Act). The shareholder may instead elect, on an annual basis, the progressive income-tax scale.

Example: on a €10,000 profit, the shareholder bears €1,280 of income tax and €1,860 of social contributions, i.e. €6,860 net.

Liquidation loss#

If the amounts distributed are below the contributions, there is a loss, which is not taxable for individual shareholders. It is a partial return of capital.

Transfer tax#

Sharing the net assets among shareholders triggers the 2.5% transfer tax (article 746 of the Tax Code), levied on the net assets distributed. The liquidation profit, as part of those net assets, is subject to it. Where the company has a single member (EURL, SASU) held by a legal entity, dissolution triggers a universal transfer of assets with no partition, hence no transfer tax.

Example: on €100,000 of net assets shared between several shareholders, the transfer tax is €2,500, withheld before distribution.

• SARL. Early dissolution is voted under the bylaws-amendment conditions (two-thirds of shares for SARLs created since 4 August 2005, three-quarters for earlier ones), with a quorum on first notice. The liquidator is appointed by the shareholders; failing that, the court appoints one.
• SAS. The bylaws freely set the dissolution and liquidator-appointment terms. Absent a clause, unanimity often applies.
• EURL. The sole member decides alone, with no meeting. The profit remains taxed at the 31.4% flat tax if the member is an individual.
• Sole proprietorship. There is no company to liquidate: closure is a cessation of activity (deregistration, notice to social security and tax authorities). No amicable liquidation, no transfer tax. The choice of SASU or EURL therefore also shapes the exit.

• Settle all debts before distributing. A social-security or tax debt revealed after deregistration can engage the liquidator's or shareholders' liability. Obtain clearance certificates before the closing meeting.
• Handle employment contracts. Remaining employees must be laid off (or transferred if the business is sold); severance and contributions must be provisioned and paid.
• Provision for tax on the profit. The shareholder owes the flat tax after distribution: clarify gross and net amounts with each shareholder.
• Settle finance-lease contracts. Leased assets remain the lessor's property: contracts must be closed or transferred.
• Meet the filing deadline for the liquidation accounts, within one month of the closure notice.

Recently, the owner of an SME with around fifteen employees came to us two months before the year-end, intending to close everything within the year. Without preparation, they would have distributed a profit without provisioning the 31.4% flat tax, exposing each of the three shareholders to an unanticipated tax adjustment on their personal returns. We staged the operation in two steps: year-end closing with a dissolution decision, then liquidation spread over the first three quarters of the following year, to smooth social filings and secure the profit calculation.

Closure looks simple — "just stop" — but it involves the liquidator, the shareholders, the creditors and the tax and social authorities. Skipping a step means risking adjustments, residual debts and shareholder disputes.

Hayot Expertise tip. Start thinking six months ahead. An engagement letter will frame the timeline, the costs (legal notices, registry, fees, transfer tax) and the tax on the profit. Never distribute before clarifying each shareholder's tax burden, and anticipate any layoffs. A smooth liquidation takes 12 to 18 months: accepting that timeline avoids costly mistakes, and we guide you through it with our closing tax strategy.