Legal Nature and Liability
A sole trader operates under their personal identity, registered in the Commercial Register. As a result:
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All business debts are personal debts
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There is no limited liability
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Deregistration does not eliminate personal obligations already incurred
Key Steps in the Liquidation Process
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Termination of commercial activity
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Settlement of all outstanding liabilities
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Closure of VAT registration (if applicable)
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Submission of final tax declarations
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Deregistration from the Commercial Register
Tax and Accounting Obligations
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Final annual personal income tax declaration
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Settlement of social security contributions
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VAT deregistration (mandatory if registered)
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Storage of accounting records for 10 years
Timeline
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Typical duration: 1–2 months
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VAT deregistration may extend the timeline by 30–45 days
Practical Example
A freelance IT consultant registered as an ET with:
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Annual turnover: EUR 85,000
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VAT registered
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No employees
The process would include VAT deregistration, final VAT return, final income tax return, and Commercial Register deletion. Total timeline: approximately 6–8 weeks.
Who This Is For
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Individuals relocating abroad
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Freelancers switching to LLC/VCC
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Sole traders ceasing activity permanently
