Closing a business is never an easy decision. Sometimes it happens suddenly due to external circumstances; other times, it is the result of long and painful reflection. In any case, one of the most common questions among self-employed workers is whether they are entitled to unemployment benefits when closing their business. And it’s completely understandable: after years of paying contributions, taxes, and building a business day after day, wouldn’t it be fair to have financial support?

The good news is that there is financial assistance available for self-employed workers who cease their activity, but with important nuances. In this guide, we’ll explain what requirements must be met, how to apply, how much you can receive, and for how long, with clear examples and useful tips to help you make informed decisions.

What does closing a professional activity actually mean?

Closing an activity is not just stopping work. It entails canceling your registration with RETA (Special Social Security Scheme for Self-Employed Workers), notifying the Tax Agency of the cessation, and in many cases, providing proof of the reasons for closing to your mutual insurance provider or Social Security.

The closure may have different motivations, but not all of them entitle you to receive the cessation of activity benefit.

Differences between voluntary closure, closure due to debts, or force majeure

It is not the same to close voluntarily because the business is no longer profitable as it is to close due to demonstrable losses, economic or technical reasons, or even due to force majeure.

For example, a self-employed worker who proves that they have had negative income for more than a year or uncollectible debts may apply for cessation of activity. However, if you simply decide to “take a break” or start a new project, you will not be entitled to unemployment benefits.

What types of businesses or professionals can apply?

All self-employed workers contributing under RETA or the Special Scheme for Seafarers may apply for the benefit if they meet the requirements. Some partners of commercial companies who contribute as self-employed workers may also qualify, although with certain specific conditions we will explain shortly.

Who can access unemployment protection after ceasing activity?

Self-employed workers under RETA

They are the main beneficiaries. If you contribute to cessation of activity (meaning your monthly contribution includes that part), you can apply for the benefit if you meet the contribution and justified-cause requirements.

For several years now, contributing to cessation of activity has been mandatory, so almost all self-employed workers can apply for this assistance.

Partners or administrators of companies: special cases

Working partners of commercial companies, including administrators, may have the right to the benefit if they contribute under RETA and demonstrate that the closure is due to continuous losses, dissolution, or objective economic reasons.

They must provide documentary proof of the situation: minutes of closure, balance sheets, annual accounts, etc.

And what about employees whose company shuts down?

If you are an employee and your company closes, it is not considered “cessation of activity” but rather ordinary unemployment benefits. In this case, unemployment is processed directly with SEPE, as with any other employee.

Essential requirements to be entitled to the cessation of activity benefit

Minimum contribution period and immediately prior period

You must have contributed to cessation of activity for at least 12 continuous months immediately prior to closing your business. If you registered and deregistered multiple times, only continuous periods are counted.

Be up to date with Social Security payments

It may seem obvious, but many forget this: if you have outstanding debts or unpaid contributions, you cannot access the benefit. Fortunately, you are allowed 30 days to regularize the situation if notified.

Valid reasons for closure: economic, technical, productive, or organizational causes

The rules are clear: to receive unemployment benefits as a self-employed worker, you must prove an objective cause. For example:

• Losses exceeding 10% of income in one year.
• Legal or administrative execution preventing activity.
• Uncollectible debts or insolvency of the main client.
• Loss of license or required administrative authorization.

Deadline to apply for the benefit after closure

The deadline is one month from the date of deregistration from RETA. If you exceed that period, you lose the right, so it’s best to have everything ready before the official closure.

Amount and duration of the assistance after cessation of activity

How is the regulatory base calculated and what percentage applies?

The regulatory base is calculated as the average of your contribution bases during the last 12 months.

You will receive 70% of that base as your monthly benefit.

Duration based on months contributed (scale example)

• 12 to 17 months → 4 months of benefit
• 18 to 23 months → 6 months
• 24 to 29 months → 8 months
• 30 to 35 months → 10 months
• 36 to 42 months → 12 months
• More than 43 months → up to 24 months

Minimum and maximum limits, and what happens with partial cessation

The amount cannot exceed 175% of IPREM or be lower than 107% (it may be higher if you have dependent children).

If cessation is partial or temporary —for example, a seasonal business—, the benefit may be suspended and resumed later.

Practical steps: how to apply for the benefit

Required documentation (form, supporting documents, mutual insurance provider)

You must submit:

• Official application to your mutual insurance provider.
• ID card (DNI) or foreigner ID (NIE).
• Documents proving deregistration from Tax Agency and Social Security.
• Proof of the cause of cessation (losses, contracts, invoices, balance sheets).
• Certificate showing you are up to date with payments.

Where to submit the application and deadlines

The application is submitted to the mutual insurance provider managing your cessation of activity coverage.

Remember: the deadline is one month from closure. Do not wait until the last day—if a document is missing, you may be denied.

Reasons for denial and how to appeal

Most denials occur due to insufficient proof of losses or debts or applying after the deadline. If you disagree, you may submit claims or appeal administratively and, if needed, through the courts.

Compatibility, suspension, and obligations while receiving the benefit

Can you start a new business and keep receiving the benefit?

If you start a new business while receiving the benefit, it will be temporarily suspended. If the new project fails within 24 months, you may resume the remaining benefit as long as you still meet the requirements.

Penalties and incompatibilities that may terminate your right

Be careful: you cannot work as an employee or issue invoices while receiving the benefit. If undeclared income or incompatible activity is detected, the benefit will be terminated and penalties may apply.

Tips and best practices for safely closing your business

Evaluate viability with an advisor before closing

Before closing, talk to a specialized advisor. Sometimes there are alternatives: restructuring debt, finding investors, changing the business model… Don’t make decisions impulsively.

Keep accounting up to date to justify losses or objective causes

Without organized and up-to-date accounting, it will be nearly impossible to justify the reasons for closure. Keep everything: invoices, statements, contracts, even client emails.

Plan a new project without losing social protection

Closure can be an opportunity. Plan your next step wisely: analyze the market, seek training, or consider selling your business if it still has value.

At Business in Spain you will find resources, advice, and opportunities for self-employed professionals and entrepreneurs who want to start again with confidence.

Frequently asked questions about unemployment benefits for self-employed workers

Does voluntary closure always entitle you to benefits?

No. Only if an economic or justified cause can be proven. Simply wishing to stop the activity does not entitle you to benefits.

Can I receive the benefit if I transferred or sold the business?

It depends. If the transfer was due to insolvency or necessity, it may be considered a valid cause. If it was profitable, then not.

What’s the difference between “unemployment benefits” and “cessation of activity benefit”?

The first applies to salaried workers; the second applies to the self-employed. The institutions, requirements, and calculations differ.

Conclusion: steps you must not overlook before and after closure

Closing your business doesn’t mean the end, it means a transition to a new professional stage. If you meet the requirements, you can rely on financial support that gives you room to reorganize. But the process requires planning, order, and guidance.

Our final advice: don’t close without being informed. Talk to your mutual insurance provider and your advisor, and prepare all documents before deregistering. And if you’re already thinking of a new project or even selling your business, at Business in Spain you’ll find guides, advice, and real opportunities to do it safely and with a long-term vision.