Closing SARL, Stock problems

[treschic]

Hi All

We want to close down our sarl and re-start the business further down the line as an AE.

30%owned by hubby, 70% owned by me, director. Online shop.

We have about 20k of stocks bought from France, UK, Holland and Asia. We've only ever paid TVA on stock bought in France.

We've just been told that in addition to it costing us approx 2,5k in admin fees to close the co down, we'll have to pay 19,6% towards the TVA on the 20k stock owned. This is totally different from what I've been previously told, (no TVA claimed, so nothing to pay) so I'm a bit confused.

Can anyone advise if this is true or not please?

Thanks

[Nick Trollope]

Essentially, you should have paid TVA on all the non -EU or EU VAT exempt imports, at the time of import, then reclaimed the TVA under the EU VAT rules. Everybody pays VAT on everything VATable, at some time - reclaiming the VAT is the exclusive right of a reseller (as you were).

 

[BJSLIV]

In effect while the company is trading it holds it's stock net of tax, as the VAT paid out on stock purchases can be reclaimed.

Once the company ceases to exist the stock ceases to be sheltered from tax and is sold to someone, IE you,  at a price including VAT which then has to be paid to the authorities.

In effect you are returning  the VAT  that was refunded on your remaining stock.

 

 

 

[AnOther]

[quote user="treschic"]30% owned by hubby, 70% owned by me, director.[/quote]Can you do that under AE ?

[Will]

No, you can't. I was assuming the OP was talking about the SARL that is being closed.

The problem here is that AE is prohibited from charging/recovering TVA, so AE can be a rather bad idea for certain types of business.

[Iceni]

[quote user="BJSLIV"]

In effect while the company is trading it holds it's stock net of tax, as the VAT paid out on stock purchases can be reclaimed.

Once the company ceases to exist the stock ceases to be sheltered from tax and is sold to someone, IE you,  at a price including VAT which then has to be paid to the authorities.

In effect you are returning  the VAT  that was refunded on your remaining stock.

[/quote]

Then I suggest that the SARL disposes of this near worthless stock at a knockdown price. To someone not connected with the directors or shareholders of the SARL, of course.

John 

[AnOther]

Can they do the 70/30 thing under AE ?

[Will]

Autoentrepreneur is for individual sole traders only

Maybe this answers your question, AnO (from www.lautoentrepreneur.fr)

• Je suis gérant majoritaire de SARL, associé de SNC, gérant ou
  associé de EURL... Est-ce que je peux bénéficier du régime
  d'auto-entrepreneur?

  Non, seules les professions indépendantes exerçant leur activité

  sous forme d'entreprise individuelle et relevant du régime fiscal de la

  micro entreprise sont concernées.

[treschic]

Gosh I'm in a pickle here!

Firstly I was told I would have to pay back all the vat that I'd claimed back from stocks bought whilst running the sarl. This I can understand. The accountant said "not to worry because I haven't claimed much -only from the French and some UK stocks"

Then whilst talking about changing our business so that it was only me running it as an AE, she said that because all the stocks were vat free, I'd have to pay vat at 19,6% on every stock we have before we can bring it into an AE structure. This also makes sense because you can't buy stock vat free on an AE.

I don't have a prob paying what I'm due but to move from the sarl to an AE and have it costing me approx 6,5k just seems really stupid. I've invested a huge amount of our money into this business and I'm reluctant to put much more into it.

Selling it on cheaply to someone outside the sarl sounds good but we'd loose that way unless I could get it back for myself somehow.

I could sell off one side of the business (I sell 3 different lines) and getting rid of half the stock would possibly pay for me to keep the other half for myself in an AE. (To be honest- I'm struggling doing 3 different lines on my own anyway.)

I only made 19k ttc last year (in effect my first year) and the sarl costs are huge -but sales from Jan-April this year are up by 65% so I may just have to run with it until I can see a clearer way out. Thanks for all your replies anyway. :) :)

[Iceni]

[quote user="treschic"]
Selling it on cheaply to someone outside the sarl sounds good but we'd loose that way unless I could get it back for myself somehow.

[/quote]

And that is the whole point of the exercise - remember the old motto, who frauds, wins.

John

[nomoss]

Write off a reasonable amount of your stock as damaged/unsaleable, write down the value of the rest of the items, if appropriate, to some reasonable prices – you don’t have to sell them for more than you paid. Any loss will be reflected in the books, reducing the profit the SARL will have to pay tax on.

 

Buy the stock you want to keep from the SARL at the revised prices plus TVA. You will take this money out, either as salary or capital, when you wind up the SARL. You will of course have to pay tax on it, but the SARL paid no tax on the money it used to buy the stock.

 

You will obviously not get back the TVA, but you presumably need some of the stock for your AE operation.

 

Sell any other stock as and where you can. Any loss you make will again reduce the taxable profits of the SARL, - assuming it is showing some profit when you wind it up.

 

As you mentioned, you could possibly sell part of the SARL together with some of the stock, but this might be more complicated to do than it’s worth.