How to close a company: dissolution agreement and CNPJ cancellation
Closing a company involves more than ceasing operations. The dissolution agreement and the cancellation of the CNPJ (the company's taxpayer registry number) usually involve corporate, tax and labor steps that, as a rule, require organization and sequencing.
What is a dissolution agreement
The dissolution agreement (distrato) is the act by which the partners formalize the decision to close the company and dissolve the bond between them. In general, it records the resolution to dissolve, defines who will be responsible for the liquidation and addresses the distribution of the remaining assets. It is a corporate document that is usually filed with the competent registry, in a manner similar to the articles of association.
Dissolution agreement and CNPJ cancellation: what is the difference
These are distinct, though related, steps. The dissolution agreement ends the corporate relationship within the business registry. The cancellation of the CNPJ, in turn, is the procedure before the tax and registration authorities that ends the company's tax obligations. As a rule, it is necessary to complete the liquidation phase, settle or regularize outstanding matters and only then obtain the final cancellation.
Usual steps of closing a company
Although each case depends on the type of company and its situation, closing a company usually follows a sequence that may include the steps below:
- Resolution by the partners on the dissolution and formalization of the dissolution agreement
- Liquidation: assessment of assets, payment of creditors and distribution of the balance
- Regularization of tax, labor and social security matters
- Filing of the dissolution agreement with the business registry
- Cancellation of the CNPJ and of the applicable state and municipal registrations
Precautions before closing
Closing a company without regularizing outstanding matters may lead to subsequent liability of the partners and the manager, depending on the case. It is also common to review current contracts, obligations toward suppliers and employees, and any guarantees provided. An orderly closing tends to reduce the risk of future claims and of reopening discussions already resolved.
Frequently asked questions
Is it possible to close a company with debts?
In general, the existence of debts does not prevent the start of the closing process, but liquidation usually presupposes dealing with the creditors. Closing without regularizing outstanding matters may, depending on the case, expose the partners to subsequent claims. The analysis varies according to the type of debt and the company's financial situation.
How long does the CNPJ cancellation take?
The timeframe depends on factors such as tax compliance, the existence of outstanding matters and the speed of the authorities involved. Companies with up-to-date registrations and obligations tend to complete the procedure more quickly, whereas outstanding matters may prolong the step. There is no single timeframe applicable to all cases.
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