Does business suspension require notifying the competent authority in Vietnam?
When facing difficulties, businesses often choose to suspend business to find a solution or find a new direction. However, not every business owner understands clearly the regulations related to the business suspension. Many of them wonder whether they have to notify the competent authority or not when suspending their businesses. So, in this article LSX legal firm will answer the question: “Does business suspension require notifying the competent authority in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Business suspension
According to Clause 1, Article 41 of Decree No. 01/2021/ND-CP:
“Article 41. Enterprise’s legal status
The enterprise’s legal status on the National Enterprise Registration Database includes:
1. “business suspension” means the enterprise’s legal status during its business suspension as prescribed in Clause 1 Article 206 of the Law on enterprises. Starting date of “business suspension” status is the date of business suspension registered by the enterprise. Ending date of “business suspension” status is the ending date of business suspension period as notified by the enterprise or the date of resumption of business ahead of schedule registered by the enterprise.”
Does business suspension require notifying the competent authority?
According to Clause 1, Article 206 of the Law on Enterprise 2020:
Article 206. Business suspension and termination
1. An enterprise shall send a written notification to the business registration authority at least 03 working days before the suspension or resumption date.
Thus, if you want to suspend your business, you must notify the competent authority. Failure to notify will be penalized in accordance with the law.
Besides, during the business suspension period, the enterprise must fully pay the outstanding tax, social insurance, health insurance, and unemployment insurance amounts; continue to pay debts, and complete the performance of contracts signed with customers and employees, unless otherwise agreed by enterprises, creditors, customers as well as and employees.
Do you have to pay social insurance if you suspend your business?
Clause 3, Article 206 of the Law on Enterprises provides:
“3. During the suspension period, the enterprise shall fully pay the unpaid taxes, social insurance, health insurance, unemployment insurance premiums and fulfill contracts with its clients and employees, unless otherwise agreed by the enterprise, creditors, clients, and employees.”
Thus, an enterprise at the time of business suspension, if still incurs tax and social insurance debts, etc. Then it must continue to pay the outstanding amount unless otherwise agreed upon by the enterprise and the parties.
After the payment is completed, during the temporary suspension of business, the enterprise is not required to pay taxes, fees, and social insurance.
The business registration agency takes responsibility for notifying the tax authority of the taxpayer’s information on business suspension within 02 working days before the date of receipt of the taxpayer’s application.
Accordingly, the enterprise only has to submit a notice of business suspension to the Business Registration Office. The Business Registration Office (not the business) has to notify the tax authorities.
Penalty for not notifying business suspension
Sanctions for violations of the law on notification obligations:
- A fine of between VND 1,000,000 and 2,000,000 for one of the following acts: Failure to notify; or not notify the business registration office of the duration of suspension or resumption of business in time;
- A fine ranging from VND 2,000,000 to VND 3,000,000 for one of the following acts: Registered for business suspension, but did not announce the branch’s suspension; representative office; business location;
- Remedial measures: Forcibly notify the business registration agency and tax authority of the content as prescribed.
Procedures for business suspension
Method 1 – Submit the application directly to the Business Registration Office of the Department of Planning and Investment of the province or city where the business located.
Method 2 – Submit the application for business suspension online in 4 steps as follows:
- Firstly, Register an account at the National Business Registration Portal;
- Secondly, Enter complete profile information into the business registration system;
- Thirdly, Scan and attach the file to the system;
- Fourthly, Confirm and submit the application.
Note: When submitting the online business suspension application, after the application valid, you have to bring the receipt and the power of attorney to the Business Registration Office to get the results.
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.
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Related questions
Article 212 of the Law on Enterprise Law stipulates that an enterprise will have its business registration certificate revoked in case the enterprise suspends for one year without notifying the business registration authority and the tax authority.
During the temporary suspension of business, enterprises are not allowed to conduct any transactions of buying and selling goods or providing services. Therefore, enterprises are not allowed to issue invoices during this time.
After the end of the business suspension period, if the business continues to suspend, it must send a second notice to the Business Registration Office.
The total time to suspend business in consecutive times must not exceed 2 years.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Does business suspension require notifying the competent authority in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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