How should I proceed with corporate business closure?

Hello. This is the corporate specialist attorney at Daeryun Law Firm.

Corporate business closure is a matter where the structure varies depending on how to organize tax procedures and corporate registration procedures.

Therefore, you must first decide whether to only stop the business or completely extinguish the corporation itself.

The closure date is, in principle, based on the date of applying for cessation of transaction activities, and once the closure date is confirmed, tax processing proceeds based on that point.

Since tax invoices cannot be issued after the closure date, setting the timing is very important.

Closure VAT must be reported and paid by the 25th of the month following the month containing the closure date, and corporate tax is reported and reflected during the regular reporting in March of the year following the fiscal year containing the closure date.

In addition, the obligation to submit payment statements for labor, business, and retirement income, and 4 major insurance loss reporting within 14 days after the worker's retirement date must also be organized together.

The closure method for corporate businesses is largely divided into two types.

The first is filing only the closure report with the tax office, and small corporations often conclude with this method.

In this case, the corporate registration is maintained as is, and future business resumption is also possible, but if the closed state continues for 5 years or more, deemed dissolution occurs, and 3 years after that, deemed liquidation completion occurs.

The second is proceeding with dissolution and liquidation procedures to completely organize the corporation itself. In this case, the corporation is legally extinguished only after completing shareholders' meeting dissolution resolution, liquidator appointment, organizing claims and debts, confirming the value of remaining assets and distributing to shareholders, and liquidation completion registration.

Unlike simple closure reports, registration procedures and organization of legal responsibilities become key issues. Therefore, when preparing for corporate business closure, it is desirable to organize in the following order.

First, confirm business cessation timing and closure date
Second, check tax reporting schedules such as VAT and corporate tax
Third, organize workers and 4 major insurances
Fourth, decide whether to keep the corporation alive or proceed with dissolution and liquidation
Fifth, review the structure of organizing remaining assets and debts

In particular, if simple closure is conducted while debts remain, responsibility issues may spread to representatives or directors, so it is important to check the financial status with an attorney.

Corporate business closure is a key step in preventing future disputes by setting a direction tailored to the company's situation before the closure decision stage.

Our firm provides comprehensive corporate legal advice including corporate business closure, dissolution and liquidation, debt organization, and representative liability risks.

If you are reviewing business closure, we recommend receiving structural review in advance.