Forced closure of an individual entrepreneur: who is at risk and how to avoid it

Why is information about closing an individual entrepreneur required?

Information about the closure of an individual entrepreneur may be required both by the former entrepreneur himself and his counterparties. The status of an entrepreneur, even if the individual entrepreneur is closed, entails certain obligations:

• for declaring income from business activities, even if a zero result or losses were obtained for the last reporting period (this must be done before the 25th day of the month following the closing date);
• for the payment of contributions to extra-budgetary funds for himself and his employees (if the individual entrepreneur did not work for a full year, then the calculation is made for the entire time he acted in this status).

Important! For information on payments to extra-budgetary funds, both current and former individual entrepreneurs can contact the Pension Fund at any time. Moreover, entrepreneurs are even recommended to make this request.

The need to check the status of an entrepreneur may also arise from his former counterparties. This is necessary to avoid problems with government agencies in the future. If the contractor or executor under the GPC agreement is an individual entrepreneur, then the customer bears only an obligation to him for timely payments, and the entrepreneur pays taxes himself. But if the status of an entrepreneur is lost, then the contract is already concluded with an ordinary individual. And in this case, the customer will act as a tax agent and will be obliged to withhold personal income tax from his income and pay it to the budget. Otherwise, all claims from regulatory authorities will be against him, and it will not matter whether he knew about the closure of the individual entrepreneur or not (

Ways to check the status of an individual entrepreneur

When an entrepreneur has decided to temporarily or permanently cease activities in this capacity, accurate knowledge of whether his application to terminate business activity is satisfied and, if so, the date of making the corresponding entry in the Unified State Register of Individual Entrepreneurs (USRIP), becomes of key importance for him. After all, the status of an individual entrepreneur, even after its termination, entails such obligations to the state as:

• the need to declare income from business activities, even if it is zero or we are talking about losses, for the last reporting period (calendar year or the time actually elapsed from its beginning until the closure of the individual entrepreneur), no later than the 25th day of the next month after the closure date;
• the need to pay contributions to extra-budgetary funds for yourself and, if applicable, employees; these contributions, if the entrepreneur worked for less than a full year in the next reporting period, are calculated strictly by day for the entire time while the individual entrepreneur’s status was relevant.

The presence of a certificate of state registration of an individual entrepreneur may not mean anything, because an entrepreneur has the right to close at any time

To calculate the amount of obligations to extra-budgetary funds, an individual entrepreneur or a former individual entrepreneur who has undergone the closure procedure has the right at any time to apply directly to the Pension Fund (PFR). However, it is recommended to do this in any case.

Contractors of an individual entrepreneur need to check its status to avoid possible problems with the state. After all, if the functions of a contractor or executor under a civil contract are assigned to an individual entrepreneur, the customer has an obligation to him for timely and complete payments. And the entrepreneur, who is his own tax agent, must deal with the state himself. But when such an agreement is concluded with an ordinary individual, the customer has an obligation to withhold and transfer personal income tax to the budget from his income and make contributions to the Pension Fund. If he does not do this, including due to the fact that he did not know about the termination of his business activity by his partner, the regulatory authorities will still have questions for him. And he cannot avoid the sanctions provided for in such a case.

In 2022, three options are available for checking the status of an individual entrepreneur:

• using an extract from the Unified State Register of Individual Entrepreneurs;
• on the website of the Federal Tax Service (FTS) of Russia;
• on the government services portal.

Extract from the Unified State Register of Individual Entrepreneurs

Current data from the Unified State Register of Individual Entrepreneurs is used in any method of checking the status of an individual entrepreneur, since the information is provided precisely on their basis. But a paper official extract from the Unified State Register of Individual Entrepreneurs differs in that it is a full-fledged document, certified by a regular, rather than electronic, signature of a tax inspector and a “wet” seal.

You can also order an official statement in electronic form, but in this case only the electronic version is considered an official document, and a printout is regarded as a copy.

To receive a paper extract, you need to provide the tax office at the place of registration of the individual entrepreneur:

• a completed application in the established form, which indicates the full name of the entrepreneur, his TIN, OGRN, region of registration and the reason for issuing the extract or place of request;
• a copy of the passport of the individual entrepreneur or his authorized representative;
• a copy of the power of attorney, if applicable;
• receipt of payment of state duty.

The state fee in 2022 is 200 rubles for a regular extract and 400 for an urgent one.

There are two ways to send this package to the tax office:

• carry it personally;
• send by Russian Post by registered mail with acknowledgment of delivery; for reliability, you can also fill out a list of attachments at the post office.

A regular statement takes five working days to prepare, an urgent one - one. An individual entrepreneur or his authorized representative can receive it in person by visiting the inspection office of the Federal Tax Service (IFNS) or by mail.

However, only a limited number of applicants have the right to order such an extract:

• the individual entrepreneur himself;
• his confidant;
• judicial or law enforcement agencies.

This means that it is impossible to legally obtain such an extract for the counterparty, except in cases where he himself has issued the appropriate power of attorney.

The individual entrepreneur himself usually requires a paper extract from the Unified State Register of Individual Entrepreneurs to resolve issues related to his activities, for example, when opening a bank account or to participate in competitions for the distribution of government orders. When business activity has already been terminated, in most cases an electronic document is sufficient.

The extract from the Unified State Register of Individual Entrepreneurs contains all the necessary information about the individual entrepreneur: personal data, legal and postal addresses, TIN

On the website of the Federal Tax Service of Russia

On the Federal Tax Service website you can check whether an individual entrepreneur is closed in two ways:

• using the service “Business risks: check yourself and your counterparty”;
• through the taxpayer’s personal account.

Contractor verification service

The first option has the following advantages:

• information about individual entrepreneurs can be obtained by anyone who has a minimum set of details - it is enough to know the full name of the entrepreneur and the region of his registration;
• you don’t have to pay to use the service;
• information is provided online; it takes no more than 10 minutes to generate and process a request.

There is only one drawback - the information provided does not have legal force. However, in the case of checking a counterparty, it is quite sufficient. In addition, this is the only legal way to obtain information from the Unified State Register of Individual Entrepreneurs or the Unified State Register of Legal Entities, not only for yourself or your principal.

Service for checking yourself and your counterparty in the list of electronic services on the website of the Federal Tax Service of Russia

An extract from the Unified State Register of Individual Entrepreneurs about a specific individual entrepreneur in the form of an electronic document signed with an enhanced qualified electronic signature can be obtained through a special electronic service on the Federal Tax Service website. Most entrepreneurs consider this method optimal. You can get all the necessary information here.

To use the Federal Tax Service service, you need to act in the following order:

1. On the main page of the Federal Tax Service website, in the list of electronic services, select the option “Business risks: check yourself and your counterparty.”
2. On the page that opens, select the form for individual entrepreneurs.
3. Select a search option - by full name or OGRNIP and INN.
4. Enter IP information.
5. Enter the captcha.
6. Give a command to search for information.
7. Wait for the result.

Personal account of individual entrepreneur

To receive an official electronic statement through the Federal Tax Service website you need to have:

• personal account on it;
• electronic digital signature.

The procedure for obtaining information is as follows:

1. Open the website of the Federal Tax Service of Russia.
2. Log in to it.
3. Select your region.
4. In the “Services” menu sub-item, select the “Extract from the Unified State Register of Individual Entrepreneurs” option or find it using the search form.
5. Fill in all required fields.
6. Read and agree to the terms of service.
7. Click on the “Get” button.
8. Wait for the result. Depending on the option chosen, an extract from the Unified State Register of Individual Entrepreneurs, containing information about the closure of the individual entrepreneur, if applicable, will be sent electronically to your email or in paper form to a regular postal address.

On the public services portal

In 2022, using the public services portal, it is impossible to submit an application to close an individual entrepreneur, nor check the result of its consideration, nor order an extract from the Unified State Register of Individual Entrepreneurs, even if there is an individual entrepreneur’s personal account, which is created in addition to the same account for an individual without individual entrepreneur status.

The portal contains only a description of government services for registering the termination of the activities of individual entrepreneurs and requesting an extract from the Unified State Register of Individual Entrepreneurs. However, the first is classified as non-electronic, and the second contains a reference to the website of the Federal Tax Service of Russia.

Video: all about closing an individual entrepreneur

How to find out whether an individual entrepreneur is closed through the tax website

Obtaining information through the Federal Tax Service website is one of the most convenient ways. To obtain information, you will need to complete the following steps:

• go to the tax website;
• select “Electronic services”;
• select “Business risks: check yourself and your counterparty”;
• in the proposed window you will need to enter the full name of the entrepreneur of interest, his ORGNIP and TIN;
• you will also need to enter some additional information about the place of registration of the individual entrepreneur;
• then the system will ask you to enter the data from the picture;
• After everything you need is filled in, you will need to click on “Find”.

After completing all the steps, the system will provide all the necessary information.

How to find out if an individual entrepreneur is closed through special programs

One of the programs with which you can check information about the closure of an individual entrepreneur is CryptoPro. This application will need to be installed on your computer. In a special window you will need to enter information about the individual entrepreneur for whom you want to obtain information. After the request, you will receive a link in xml format with the necessary information.

In addition to the tax base, there are also other resources that allow you to find out the status of an entrepreneur. Such sites usually provide accounting services. But they can also provide this information for a certain amount of money. The price tag for this information can range from 500 to 2000 rubles, depending on the selected site.

Important! Only the tax authority provides reliable information. All information provided by third-party resources may be unreliable.

Closing an account

After ceasing operations, you must close your current account. At the same time, the entrepreneur has the obligation to notify the tax office, the Pension Fund of the Russian Federation and the Social Insurance Fund about this within 7 days from the date of liquidation of the account.

A message is sent to the inspection using form No. S-09-1 (approved by order of the Federal Tax Service of Russia dated June 9, 2011 No. ММВ-7-6/362).

The form for notifying funds about account closure has not been approved. However, there is a recommended application form on the Pension Fund website. To download it, you need to go to the “Employers” section, then select the “Payment of insurance premiums and reporting” section, in which go to the “Reporting and the procedure for its submission” subsection. Here you can find the “Notification form for opening (closing) an account.”

The notification form to the FSS can be downloaded on the websites of regional branches, in the sections “Forms and forms”, “Useful information”, etc.

Checking information not via the Internet

If the interested person has free time and does not want to receive information via the Internet, they can use another method. Thus, you can obtain information about the closure of an individual entrepreneur by contacting the tax office in person and requesting an extract from the Unified State Register of Individual Entrepreneurs. To do this, you will need to submit an application, indicate the TIN and individual entrepreneur registration number, and also present your passport.

Important! After 5 working days, you will be able to receive information about the closure of the individual entrepreneur. The answer can be received in person at the tax office or by mail. Such an extract can also be ordered through the MFC.

Ways to check

Registration of individual entrepreneurs online - is it possible to do this via the Internet?

Over the past few years, the following solutions to this issue have become available to citizens:

• Online public services portal.
• Website of the Federal Tax Service of Russia.
• Obtaining an extract from the Unified State Register of Individual Entrepreneurs. Finding out information this way is also easy.

Each method has its own implementation characteristics. Checking the closure of an individual entrepreneur is not difficult.

Public services

Documents required to obtain an extract

If you need to receive an extract on paper, then when you contact the tax office you will need to have the following documents with you:

• application in the prescribed form (in the application you will need to indicate the full name of the entrepreneur, INN, OGRN, place of registration and reason for the extract);
• a copy of the entrepreneur’s passport (if it is not the entrepreneur himself who is applying, then you will need to provide a passport of an authorized person and a duly drawn up power of attorney);
• a receipt confirming payment of the state fee (200 rubles for a simple extract, 400 rubles for an urgent extract).

Procedure and documents for liquidating an individual entrepreneur at the tax office yourself: step-by-step instructions

Once you have chosen the method of terminating your business, you need to take preparatory steps. First of all, this concerns employees, if there are any.

Calculate and dismiss employees

Any employer who has to declare the cessation of the company’s activities must completely close issues related to subordinates - both officially employed and those who work with a gray salary. First of all, these are the necessary entries in the work book, as well as wages for the remaining period. If you still have debts or unpaid taxes for employees, the Federal Tax Service will simply refuse your application for liquidation.

Closing an individual entrepreneur by mail step by step: what documents to send to the employment service

At least 2 weeks before the upcoming layoff, it is necessary to notify the employment center at the place of registration of the individual entrepreneur about the termination of activities, because most employees will join the labor exchange after dismissal. There is no established form of application; it is written in any form, however, it must contain the following information about each worker:

• position held;
• speciality;
• general name of the profession;
• qualification (for example, a rank with a turner);
• salary and additional material conditions of remuneration.

I want to close an individual entrepreneur, where to start closing a business using the simplified tax system: by warning employees about the upcoming layoff

It seems obvious. It is worth telling your employees in advance that they will soon be fired for reasons beyond their control. This way, they will be able to look for a new job in advance, ask you to write a positive reference from the employer, and some may want to resign of their own free will in advance, so as not to sink with the ship.

But a simple verbal announcement will not be enough. It is necessary for employees to sign that they have read the notice. The timing of when to make an announcement is not simple. For legal entities this is 2 months. But an individual entrepreneur is an individual, there are no restrictions for him. And since it is necessary to submit documents for the liquidation of an individual entrepreneur within a two-week period, the same period is proposed for announcing the decision to subordinates.

However, there is a nuance. If you work on a contract basis, then each work contract may contain layoff conditions (and then they must be observed), including:

• notice period;
• severance pay;
• other compensation.

Then follows:

• write dismissal orders using the T-8 form;
• make entries in the Labor Code and personal cards;
• issue employees with a set of certificates and work books;
• pay wages and compensation for unpaid vacation (if the contract provides for other payments, then these too).

What is needed to report on employees and where to go when closing an individual entrepreneur

You will need to visit three organizations. For them, you should prepare your own package of papers for each employee; it’s good that they are all filled out according to the established template:

In the reports, you should have calculated contributions to insurers for subordinates. They must be submitted no later than two weeks from submitting the papers. And only after you have no employees left at all, you can move on to the main stage - submitting an application to close the individual entrepreneur.

Find out the exact closing date of the IP

You may need to find out the exact date of closure of business activity in the following cases:

Conclusion: what to remember about the forced closure of individual entrepreneurs

From September 1, 2022, tax authorities can forcibly remove an individual entrepreneur from the state register if he does not submit reports within 15 months and does not pay taxes or contributions on time.

To make it easier for you to remember the conditions for excluding individual entrepreneurs, we have prepared a table.

In order for an individual entrepreneur to be forcibly closed, two conditions must coincide. At the top are situations related to filing tax reports, at the bottom are situations related to paying taxes.

After forced closure, a businessman does not have the right to reopen an individual entrepreneur for three years.

Tax authorities publish an announcement about the upcoming exclusion of individual entrepreneurs from the state register on the “Bulletin of State Registration” website. To avoid forced closure, the entrepreneur must send reasonable objections to the tax authorities within a month after publication.

If the individual entrepreneur misses this deadline, then within another year he can appeal his exclusion from the state register in court.

Answers to common questions

Question: If we order an extract from the Unified State Register of Individual Entrepreneurs in electronic form, is it an official document?

Answer: Yes, an electronic statement is an official document, but a printout of such a statement is already a copy.

Question: Which tax authority should I contact to obtain an extract from the Unified State Register of Individual Entrepreneurs?

Answer: You should contact the tax office at the place of registration of the entrepreneur about whom you want to obtain information.

Question: Who, besides the entrepreneur himself, can order an extract from the Unified State Register of Individual Entrepreneurs? Can his counterparty do this?

Answer: Only the following persons can order an extract from the Unified State Register of Individual Entrepreneurs:

• the entrepreneur himself;
• sole proprietor;
• law enforcement and judicial authorities.

This means that the counterparty will not be able to obtain such an extract on its own. To do this, he will need to obtain a power of attorney from the entrepreneur.

Why find out whether an individual entrepreneur is closed or not?

Official information about whether the individual entrepreneur is functioning or whether the citizen has ceased business activities and has been deregistered as such is necessary both for this citizen himself and for his potential counterparties.
If a citizen has initiated the procedure for terminating activities as an individual entrepreneur and has submitted a corresponding application to the tax office, it is important for him to make sure that the procedure has been completed and the termination of registration as an individual entrepreneur is properly recorded in the Unified State Register of Individual Entrepreneurs. This is necessary to make sure that the individual entrepreneur is officially closed and that no more claims for taxes, fees, fines or assessments will be made against it. Otherwise, if it later turns out that the tax authorities did not complete the procedure for deregistration, the former entrepreneur will be forced to pay taxes for the period when he no longer actually worked.

It is also important for his counterparties to know the current status of an individual entrepreneur; this will insure them against concluding an agreement with an unscrupulous citizen who conducts business activities, despite the fact that his status has been officially terminated. It is important to understand that cooperation with individual entrepreneurs and with individuals must be legally organized differently, therefore the company, when concluding an agreement with a citizen as an individual entrepreneur, is obliged to make sure that this status is relevant.