Suspending a business is something that no entrepreneur wants. However, many problems will arise that the business cannot foresee, suspending will help business owners “stop a little” and develop in the future. Besides, you have to understand clearly about the regulations related to business suspension to avoid violations of the law. If you violate the prescribed provisions, you will have to pay for the penalties in the corresponding form under the law. So, in this article LSX legal firm will give you an insight into: “Penalties for violations of business suspension in Vietnam”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Business suspension
Suspending business means an enterprise carrying out administrative procedures with the business registration authority as well as the competent authority for the purpose of not doing business for a certain period of time.
This means that the enterprise does not carry out any production or business activities during the temporary shutdown. Also, do not sign contracts with partners and customers, not issue invoices, and do not have to declare and finalize tax when it comes to the final settlement period.
Currently, there are many different reasons leading to enterprises having to decide to suspend their business such as enterprises having financial and human resource difficulties and cannot continue to operate, enterprises having new orientations in their business structure, or corporate organization…
Besides, enterprises must suspend business operations when they no longer satisfy business conditions; according to regulations at the request of the business registration agency; or other competent authority.
When an enterprise wishes to suspend its business, it must carry out procedures for business suspension and notify the suspension to the business registration office and tax agency that directly manage the business.
Why suspend business of an enterprise?
Firstly, this creates a way for your business to continue operating in the future. If your company complies with the provisions of the law, your company can still conduct business as usual without any restrictions imposed by the government on your business.
Second, your enterprise not subject to any sanctions. This means that your business will not restricted by any state agency because the business suspension will not cause any adverse effects on the legal activities of the company as well as the economy.
Thirdly, this helps your business have time to deal with the difficulties that led to the suspension in the first place.
Penalties related to business suspension
Penalty for business suspension beyond the time limit
According to Article 212 of the Law on Enterprises 2020. The sanction level for enterprises is prescribed as follows:
Article 212. Revocation of the Certificate of Enterprise Registration
1. An enterprise’s Certificate of Enterprise Registration shall be revoked in the following cases:
a) The enterprise registration application contains fraudulent information;
b) The enterprise is established by persons banned from establishing enterprises specified in Clause 2 Article 17 of this Law;
c) The enterprise is suspended for 01 year without notifying the business registration authority and the tax authority;
d) The enterprise fails to send reports in accordance with Point c Clause 1 Article 216 of this Law to the business registration authority within 06 months from the deadline or from the receipt of a written request;
dd) Other cases under decision of the court or request of competent authorities as prescribed by law.
Thus, the case of business suspension beyond the time limit will be sanctioned as having the Certificate of Business Registration revoked and the name deleted from the business registration book.
Penalty for suspending business without notice
Enterprises suspending business must notify in writing the Business Registration Office no later than 03 working days before the date of business suspension or business resumption before the notified time limit.
The law stipulates sanctions for enterprises that temporarily suspend their business but fail to notify the business registration agency. In particular, Article 212 of the Law on Enterprise 2020, as mentioned above; stipulates that an enterprise will have its business registration certificate revoked in case the enterprise stops operating for one year without notifying the business registration authority and the tax authority.
Besides, penalties for violations of notification obligations:
- A fine ranging from VND 1,000,000 to VND 2,000,000 for one of the following acts: Failure to notify the business registration office on time of the duration of suspension or resumption of business;
- A fine ranging from VND 2,000,000 to VND 3,000,000 for one of the following acts: Registering for business suspension but failing to notify the branch’s operation suspension; representative office, business location;
Business suspension service of LSX Legal Firm
Business suspension-a necessary solution for businesses when they cannot continue doing business for a specified period of time. Suspending business quickly will help businesses avoid unnecessary costs. Meanwhile, the business suspension process contains complicated procedures so if businesses do it themselves, they will face many risks. Using the business suspension service of LSX will make you feel secure in each stage of implementation.
To make your case more convenient, LSX will perform:
- Legal advice related to new regulations in business suspension;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself, We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
Does suspended business have to pay license tax in Vietnam?
Do businesses pay tax when suspending business in Vietnam?
Certificate of business suspension for representative office and branch in Vietnam
Related questions
After the business suspension period expires; the enterprise has the right to continue to suspend business when there is a need.
Enterprises must suspend business in parallel with completing tax obligations in case the tax code is not locked.
The content of the notice includes:
Name, head office address, tax identification number;
Firstly, The business suspension period, the start date and the end date of the suspension period;
Secondly, Reason for business suspension;
Thirdly, Full name and signature of the legal representative of the enterprise, the representative of a group of business individuals or the owner of the business household.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Penalties for violations of business suspension in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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