How to cancel a trade in 2026? Procedure, deadlines and obligations of self-employed persons

Are you dealing with a business closure, debts, employees or uncertainties with the authorities? Take advantage of our tailored legal problem solving service.

Don’t terminate just discontinue

We were contacted on social media by Mr Stanislav, who was also interested in the possibility of cancelling his trade licence. His business was doing quite well, but his girlfriend got pregnant and he got an interesting job offer as an employee at the same time and wanted to play it safe in such a situation. We advised him in this case not to close the business but only to discontinue it. He only had to report the interruption to the Trade Licensing Office, there was no need to explain or prove anything.

In this way, the trade can be interrupted for a fixed period of time, and if you decide to return to the business at some point in the future, you can renew the trade again and continue the business. If there is even a slight possibility that you will return to the business at some point, albeit in a different form, this is definitely a better option because it avoids the CZK 1,000 fee for setting up the business again.

When you decide to close your business

A trade licence is the legal basis for doing business; no business may be conducted without it. If you are adamant that your business was a dead end and you will never resume it in the future, then a real and final closure of the trade is offered. However, along with going to the trade office, think of other important steps.

Deal with your employees

Most sole traders work for themselves, so the livelihood of other people is not tied to them (except for their own family). However, if you are one of the minority who employ other people, you need to think about terminating them too. While termination of a trade is one of the reasons under the Labour Code when you can give notice, it also comes with other obligations such as two months’ notice and payment of severance pay of up to three times the average salary (depending on how long the employee has worked for you). In this situation, the employment relationship can also be terminated by a termination agreement, but the employee must agree to it.

Sort out your liabilities and debts

If you still have outstanding debts or liabilities, it is certainly advisable to invoice or pay everything before you close the business. However, if you were to close the business and fail to pay an invoice, you are unlikely to avoid paying it anyway, as the amount owed would probably be recovered from you even after the business has closed.

If you are winding up your business and are left with unpaid invoices, disputed contracts or debts to suppliers, don’t wait for the problem to escalate. As part of our bespoke legal problem solving service, we will review your liabilities, suggest a course of action against creditors or debtors and help you set up your business closure so that you are not surprised by a demand for payment, lawsuit or execution later on.

Termination at the Trade Licensing Office

First of all, the termination of a trade must be notified at the central registration point (CRM) (trade offices, Czech POINTs). For this purpose, a special form called a change sheet is filled in, which is also used in cases where, for example, the name, address or other important data related to the business changes. You can fill in the change sheet directly at the trade office or Czech POINT. You will list here all the trades you want to close. If you reported more than one trade at the beginning of your business, then you need to terminate each of them individually. Cancellation of a trade licence can be done in person, online or by post, it just depends on your preference:

• In person at a central registration point – An application to cancel a trade licence can be made at any trade office throughout the country, as local jurisdiction has been revoked. The registration in the trade register will be made by the trade office that received the application first;
• Online (with an electronic signature or to a data box);
• Alternatively, send the completed and signed form by post to the relevant trade office.

Remember that cancelling a trade licence does not immediately erase your business history – records remain on the public register for four years.

You can cancel the trade on the date of completion, or you can choose a later date. However, it is not possible to terminate the trade retrospectively, i.e. for example in August choose that the termination occurred on 1 July. If you do not fill in any date and leave this box blank, the trade licence will be cancelled on the date the trade authority’s decision becomes final.

After the termination of the trade, information about your business will still be available and visible in the public trade register for 4 years. After this period, it will be moved to the non-public part of the register.

You can also notify other institutions, such as the Tax Office, the health insurance company or the district social security administration, of the dissolution of your business via the change certificate. This will save you a lot of time and work.

You are still an entrepreneur until the day your trade licence is revoked and you must comply with related obligations, including paying insurance premiums. If you specify a specific date in your application, the trade licence may be revoked by the trade licensing authority at the earliest on the date of receipt of the application. If you do not specify a date, the authorisation will not be terminated until the decision becomes final.

Bypass other authorities

Even after your trade has been cancelled, as a self-employed person you still have certain obligations towards the authorities that you must not forget. If you have not taken our well-intentioned advice and notified the other authorities of the end of your business via the change sheet, you must now inform all these authorities individually. They have different notification deadlines, so plan your visits so that you can get everything done in good time. It really doesn’t pay to hesitate unnecessarily and make last-minute detours.

• Notify the health insurer within 8 days of closing your business.
• Notify the tax office by the 15th day after you close your business.
• Submit the notification to the district social security office no later than the 8th day of the month following the month in which the business was closed.

If you fail to meet the deadlines and thus breach your notification obligation, you may be fined up to CZK 50,000. The good news is that you don’t have to pay anything to close your business. The authorities will provide all services free of charge.

Don’t forget about next year’s tax return

A self-employed person is obliged to file a tax return even if he or she has already stopped doing business during the year. So make sure you file your tax returns and reports on time and correctly with the district social security office and the health insurance company next year, even if you are already a full-time employee, for example. In this case, your employer will not process the taxes for you and it is up to you or your tax adviser or accountant.

For 2025 returns, the deadlines in 2026 are April 1 for paper filing, May 4 for electronic filing, and July 1 for filing through an advisor or a required audit.

Cancellation of a trade can also occur ex officio

The authorities can also take action to dissolve your trade in exceptional circumstances. This happens, for example, if the trader violates the Trade Licensing Act or the Czech Social Security Administration shows large arrears of social insurance.

Summary

Closing a trade is administratively a relatively simple step, but in practice it can have a number of consequences. Before you apply for the cancellation of your trade licence, consider whether it might be more appropriate for you to simply suspend your trade. This is particularly worthwhile if there is a chance that you will return to the business at some point.

If you have made the decision to permanently cease trading, apply via a variation form at the Trade Licensing Office, Czech POINT, online or by post. Remember that you cannot cancel a trade retrospectively. You are still a sole trader until the date of cancellation and must comply with the related obligations.

Do not forget about other institutions after the cancellation of the trade. Typically this will be the health insurance company, the Social Security Office and the tax office. Also keep an eye on outstanding invoices, debts, contracts, employees and document archiving. Closing a trade does not mean that your existing liabilities will cease.

In the following year, you will usually still have to file your tax returns and reports for the health insurance and social security authorities. If you are unsure how to proceed, or if you are dealing with concurrent debts, employees or contractual relationships, it is worth consulting a solicitor before you apply.