Enterprises can be dissolved in the certain cases prescribed by law. The dissolution of enterprises shall comply with relevant regulations. Let’s find out this issue with Lawyer X through the following scenario: “Dear Lawyer! I would like to ask in what cases shall an enterprises be dissolved? What is the procedure for dissolution of enterprises? Thanks for your answer!”
Legal grounds
Law on Enterprises
Cases of and conditions for dissolution of enterprises
– An enterprise shall be dissolved in the following cases:
+ The operating period specified in the company’s charter expires without an extension decision;
+ The enterprise is dissolved under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the GMS (for joint stock companies);
+ The enterprise fails to maintain the adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business;
+ The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration.
– An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration. Relevant executives and the enterprise mentioned in Point d Clause 1 of Article 207 Law on Enterprises are jointly responsible for the enterprise’s debts.
Dissolution procedures
Enterprise dissolution in the cases specified in Points a, b and c Clause 1 Article 207 of this Law shall be carried out as follows:
– A resolution or decision on the dissolution is issued. Such a resolution or decision shall contain the following information:
+ The enterprise’s name and headquarters address;
+ Reasons for dissolution;
+ Time limit and procedures for finalization of contracts and payment of the enterprise’s debts;
+ Plan for settlement of obligations under employment contracts;
+ Full name and signature of the owner of the sole proprietorship, the company’s owner, the President of the Board of Members, the President of the Board of Directors;
– The owner of the sole proprietorship, the Board of Members or the owner, the Board of Directors directly organizes the liquidation of the enterprise’s assets, unless the company’s charter requires establishment of a separate liquidation organization;
– Within 07 working days from the ratification date, the resolution or decision on dissolution and the minutes of the meeting shall be sent to the business registration authority, tax authority and the enterprise’s employees. The resolution or decision shall be posted on the National Enterprise Registration Portal, displayed at the enterprise’s headquarters, branches and representative offices.
In case the enterprise still has unpaid debts, the resolution or decision and the debt payment plan shall be sent to the creditors and persons with related rights, obligations and interest. The debt payment plan shall contain the creditors’ names, debts, repayment time, location and method; method and time limit for settling creditors’ complaints;
– The business registration authority shall post a notification that an enterprise is undergoing dissolution, the dissolution resolution or decision and debt payment plan (if any) on the National Enterprise Registration Portal right after the resolution or decision is received (if any);
– An enterprise’s debts shall be paid in the following order of priority:
+ Unpaid salaries, severance pay, social insurance, health insurance, unemployment insurance premiums and other benefits of employees under the collective bargaining agreement and concluded employment contracts;
+ Tax debts;
+ Other debts;
– After the dissolution costs and debts have been fully paid, the remainder shall be divided among the owner, members/partners, shareholders in proportion to their stakes/shares;
– The enterprise’s legal representative shall submit the application for dissolution to the business registration authority within 05 working days from the day on which the enterprise’s debts are fully paid;
– After 180 days from the receipt of the dissolution resolution or decision mentioned in Clause 3 of Article 208 Law on Enterprises without further comments from the enterprise or written objections from relevant parties, or within 05 working days from the receipt of the application for dissolution, the business registration authority shall update the enterprise’s status on the national enterprise registration database;
– The Government shall elaborate the procedures for enterprise dissolution.
Dissolution upon revocation of the Certificate of Enterprise Registration or under court decision
Procedures for dissolution of an enterprise upon revocation of the Certificate of Enterprise Registration or under court decision:
– The business registration authority shall post on the National Enterprise Registration Portal a notification that an enterprise is undergoing dissolution on the same day on which the decision to revoke the Certificate of Enterprise Registration is issued or right after the court decision on the enterprise’s dissolution is received. The notification shall be enclosed with the effective revocation decision or the court decision.
– Within 10 days from the receipt of the effective decision, the enterprise shall convene a meeting to dissolve the enterprise. The dissolution resolution or decision and copies of the effective decision shall be sent to the business registration authority, tax authority and the enterprise’s employees and displayed at the enterprise’s headquarters, branches and representative offices. The dissolution resolution or decision, if required by law, shall be published in at least 03 issues of 01 printed newspaper or electronic newspaper.
In case the enterprise still has unpaid debts, the resolution or decision and the debt payment plan shall be sent to the creditors and persons with related rights, obligations and interest. The debt payment plan shall contain the creditors’ names, debts, repayment time, location and method; method and time limit for settling creditors’ complaints;
– The enterprise’s debts shall be paid in accordance with Clause 5 Article 208 of this Law;
– The enterprise’s legal representative shall submit the application for dissolution to the business registration authority within 05 working days from the day on which the enterprise’s debts are fully paid;
– After 180 days from the notification date mentioned in Clause 1 of Article 209 Law on Enterprises without further comments from the enterprise or written objections from relevant parties, or within 05 working days from the receipt of the application for dissolution, the business registration authority shall update the enterprise’s status on the national enterprise registration database;
– Relevant executives of company shall be personal responsible for any damage caused by their failure to comply with Article 209 Law on Enterprises
Application for dissolution
– An application for dissolution of an enterprise shall consist of:
+ The notification of the enterprise’s dissolution;
+ The report on liquidation of the enterprise’s assets; list of creditors and paid debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any).
– Members of the Board of Directors (for joint stock companies), members of the Board of Members (for limited liability companies), the owner (for sole proprietorships), the Director/General Director, general partners and legal representatives shall be responsible for the accuracy and truthfulness of the application.
– In case the application contains inaccurate or false information, the persons specified in Clause 2 of Article 210 Law on Enterprises shall jointly provide the outstanding employees’ benefits, taxes and other debts and bear personal responsibility for the consequences that occur within 05 years from the day on which the application is submitted to the business registration authority.
Actions prohibited from the issuance date of the dissolution decision
– From the issuance date of the dissolution decision, the enterprise and its executives are prohibited from the following actions:
+ Concealing, disguising assets;
+ Denying or reducing the creditors’ claims to the debts;
+ Convert unsecured debts into debts secured with the enterprise’s assets;
+ Concluding new contracts, except for dissolving the enterprise;
+ Pledging, donating, leasing out assets;
+ Terminating effective contracts;
+ Raising capital in any shape or form.
– The persons who commit the violations mentioned in Clause 1of Article 211 Law on Enterprises, depending on their nature and seriousness, will be held liable to administrative penalties or criminal prosecution and pay damages.
Services of Lawyer X
Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.
On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, Lawyer X’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
Confidentiality of client information: Finally, all personal information of clients Lawyer X will be 100% confidential.
If you need any further information, please contact LSX Law firm: at +84846175333 or Email: [email protected]
Frequently asked questions
An application for dissolution of an enterprise shall consist of:
+ The notification of the enterprise’s dissolution;
+ The report on liquidation of the enterprise’s assets; list of creditors and paid debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any).
Members of the Board of Directors (for joint stock companies), members of the Board of Members (for limited liability companies), the owner (for sole proprietorships), the Director/General Director, general partners and legal representatives shall be responsible for the accuracy and truthfulness of the application.
An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration. Relevant executives and the enterprise mentioned in Point d Clause 1 of Article 207 Law on Enterprises are jointly responsible for the enterprise’s debts.
Conclusion: So the above is Dissolution of enterprises according to Viet Nam Law on Enterprises. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
