What about leasing? – this is one of the most common questions asked by people who decide to suspend or close their business. When leasing a car, it is difficult to predict what the condition of our company will be in a few years, so it is worth knowing what to do if we can no longer run the business. Closing a business and leasing – check the most advantageous solutions!
#1 Early redemption
Can the lease be paid off earlier? Yes, if you have the appropriate resources. However, it is worth remembering that if the leasing contract duration is shorter than the 40% amortization period, the purchase price cannot be lower than the market price. Early buyout is therefore a solution that is usually used only by people who have a lot of cash and who want to keep the leased item. If the terms of the contract include an appropriate provision, the lessor may also demand payment of a handling fee.
#2 Lease assignment
One of the popular solutions is leasing assignment, i.e. transferring the contract to a third party. This is most often another entrepreneur who, upon transfer of the contract, becomes the new lessee, continues the repayment and takes over the leased item. Assignment requires consent from the lessor, who will assess the capacity of the assignee before making a decision. In this situation, you can get rid of leasing relatively easily and avoid contractual penalties, debt collection or commission. However, carrying out the assignment may be somewhat time-consuming, as it requires completing formalities and paying a processing fee. How long does a leasing assignment take? Typically, the entire process takes from several to several weeks.
#3 Subletting of a leased item
An alternative to assignment is subletting the leased item, i.e. finding a person or company that will use the car and pay the installments, but will not take over our leasing contract. To make this possible, however, we must obtain the lessor's consent. This solution can be risky because we have to assume that the person subletting the item may not be honest - in such a situation we will unfortunately have an additional problem.
#4 Suspension of operations
An interesting issue is the suspension of operations and leasing. As an entrepreneur registered in CEIDG, you can suspend your business for a period from 30 days to 24 months or indefinitely. In the case of companies registered in the National Court Register, the maximum period of suspension of operations is 24 months. During the suspension, there are no contraindications to continuing the leasing contract. Installments paid during the suspension of operations may be included in tax-deductible costs, but it is not possible to settle expenses related to operation (e.g. fuel costs, service). During the period of suspension of your business, you also have the right to deduct VAT from leasing installments.
#5 Consumer leasing
If you are planning to close a JDG, you may consider switching from corporate leasing to consumer leasing or regular credit. Under this solution, you will continue to repay the installments, but not as an entrepreneur, but as an individual. However, if you switch to consumer leasing, you will lose tax benefits related to, among others: including installments in costs of obtaining income or deduction of VAT. Therefore, it is a less profitable solution than corporate leasing, but it is certainly worth considering when closing a business.
#6 Cancellation of leasing
Withdrawing from the contract is not the best solution. Canceling the lease has financial consequences - you still have to pay the installments, and the lessor will only reduce the amount due by the value of the returned item. Such action may also have a negative impact on your credit history, and sometimes requires paying a contractual penalty. If you are planning to close your business, consider your remaining options first.
FAQ – Frequently asked questions and answers
Is it necessary to inform the lessor about the closure of the company?
If you want to close your business, you are obliged to notify the lessor that you are no longer in business. It happens that lessees do not do this and continue to pay the installments and finally buy out the lease. However, this is very risky and may result in termination of the contract and repossession of the leased item. A lessee who conceals the truth may also be held criminally liable.
What formalities after closing the company?
Are you planning to close or suspend your business? Such a decision requires completing many formalities. If you need support, contact us. We will advise you on what to do with leasing and prepare a list of necessary matters that must be resolved before suspending/closing the business. We operate remotely at 100%, so you don't have to worry about time-consuming travel to meetings - we contact you by phone and e-mail, and if necessary, we offer convenient online meetings.
