Being self-employed and on sick leave doesn’t mean the world stops, even if it sometimes feels that way. If you have a business to maintain, clients waiting, or even a physical shop still running, it’s natural to wonder: Can I transfer my business while on sick leave?

The answer, as with most legal and tax matters, depends on several factors. In this article, we’ll explain what the law says, how Social Security and the Tax Agency view it, and what real options you have to sell, hand over, or transfer your business while you’re on medical leave or any other type of leave.

Let’s go step by step, without unnecessary legal jargon, and with practical advice so you can make the best decision without risking your rights or your benefits.

What Being on Sick Leave Means and How It Affects Your Activity as a Self-Employed Worker

When a self-employed person goes on sick leave, it basically means they are temporarily suspending their activity because they’re unable to perform it. During this period, they may receive a financial benefit (if eligible) and must remain registered with Social Security, even if they’re not actively working.

Types of Sick Leave: Temporary, Medical, and Maternity or Paternity

Not all types of leave are the same. And that’s important, because the type of leave determines what you can or cannot do with your business:

• Medical leave or temporary disability: due to illness or accident. You cannot perform the activity, but you remain the business owner.

• Maternity or paternity leave: you’re entitled to rest and receive a benefit for a set period of time.

• Leave due to risk during pregnancy or breastfeeding: similar to the previous case, but for preventive reasons.

In all of these cases, you’re limited in performing direct economic activity, but that doesn’t mean you can’t make administrative or strategic decisions.

Differences Between Medical Leave and Business Closure

These are often confused. Medical leave means you are ill and temporarily unable to work. In contrast, business cessation means you’ve closed or suspended your business and stopped invoicing.

If you’re on medical leave, you’re still considered an active self-employed worker (even if you’re not working). But if you’ve officially ceased activity, you can’t transfer the business, since it’s legally considered inactive or closed.

Is It Legal to Transfer a Business While on Sick Leave?

That’s the big question. The law does not explicitly prohibit transferring a business while on medical leave, but there are important nuances.

Current Regulations on Business Transfers While on Leave

A business transfer is considered a commercial transaction, not a work activity. This means you can sell or assign ownership of your business as long as you don’t carry out work-related tasks (such as serving clients or managing day-to-day operations).

In short: yes, you can transfer your business while on sick leave, but it must be done as an administrative decision, not disguised as professional activity.

What Social Security and the Tax Agency Say

• Social Security: allows you to keep receiving benefits as long as you don’t work or issue invoices. Simply signing a transfer agreement does not count as working.

• Tax Agency (Hacienda): requires you to declare the transaction properly as a transfer of assets or assignment of premises, depending on the case. Any profits must be reported in your income tax (IRPF) or VAT, as applicable.

Note: if it’s proven that you continued working during your leave, you could lose your benefits and face a penalty. But if everything is done legally and with professional advice, there’s no problem.

Requirements and Steps to Transfer Your Business While on Leave

Alright, it’s possible, but how? Here are the most important steps to follow carefully.

Required Documentation

You’ll need to prepare, among others, the following documents:

• Business transfer or sale agreement.

• Inventory of assets, stock, and rights transferred.

• Valid licenses and permits.

• Certificates proving you’re up to date with the Tax Agency and Social Security.

• In some cases, authorization from the landlord if the premises are rented.

It’s advisable to have everything reviewed by a lawyer or specialist advisor in business transfers.

How to Declare the Operation and Avoid Penalties

Depending on your type of business and the value of the transfer, you may need to charge VAT or declare it in your income tax. A tax advisor can help you declare the operation correctly.

Also, if the transfer involves real estate or assets, you must pay the Property Transfer Tax (ITP).

The key is full transparency. Hiding or misreporting can lead to serious fines and affect your future benefits.

Procedures with Social Security and the Tax Agency

Once the contract is signed, you must:

1. Notify the Tax Agency of the ownership change using form 036 or 037.

2. Inform Social Security of the transfer, especially if employees are affected.

3. If you remain on leave until recovery, continue receiving your benefit, but do not carry out any professional activity.

If you do everything properly, you won’t lose your rights or face future issues.

Alternatives If You Can’t Transfer Your Business Directly

Sometimes, for legal or personal reasons, you can’t immediately formalize the transfer. In such cases, there are alternative options.

Appointing a Representative or Attorney-in-Fact

You can appoint a representative (for example, a relative or manager) to act on your behalf in administering or negotiating the transfer. This allows you to stay on leave without breaching benefit conditions.

Renting or Temporarily Assigning Your Business Premises

Another option is to rent out your premises or business license while you’re on leave. That way, you retain ownership but delegate its temporary operation.

Make sure to formalize it in writing to avoid tax or contractual misunderstandings.

Waiting Until You’re Recovered: Pros and Cons

Sometimes the wisest move is to wait until you’re recovered and back at work before transferring your business.

• Advantages: avoids legal complications.

• Disadvantages: you might miss opportunities or income during the wait.

It depends on your case, but if the operation is urgent, delegating or planning the transfer while on leave may be the best option.

Expert Advice Before Making a Decision

Transferring a business is never a small decision, and doing it while on leave requires extra caution.

When to Consult a Labor or Tax Advisor

Before signing anything, consult a specialist advisor for the self-employed. It’s affordable and can save you a lot of trouble. They’ll interpret your situation, rights, and the best legal options.

How to Protect Your Rights and Avoid Losing Benefits

Always keep all documentation, justify any financial transactions, and make sure you don’t perform direct professional activity. If Social Security requests information, respond transparently.

And if in doubt, document every step: contracts, emails, dates, everything matters.

Conclusion: What You Should Know Before Transferring Your Business While on Leave

In short, yes, you can transfer your business while on sick leave, as long as you do it legally, without working directly or hiding information.

The transfer is considered an administrative act, not a work activity, so you shouldn’t lose your benefits if you meet the requirements.

Remember: get proper advice, act carefully, and plan ahead. Transferring a business isn’t just a financial decision, it can shape your professional future. And if you want to do it safely and with expert support, you’ll find the guidance you need at Business in Spain.