Facing the complicated situation of the Covid-19 epidemic, many businesses are in a deadlock situation. Because business activities are not guaranteed, leading to losses. Faced with that situation, many businesses have to go bankrupt. So how long can a business be temporarily suspended for business?
Let’s find out with Lawyer X through the following article:
Legal grounds
Enterprise Law 2020
What is business suspension?
“Suspension of business” means the legal status of an enterprise that is in the period of temporary business suspension as prescribed in Clause 1, Article 206 of the Law on Enterprises. The date of changing the legal status of “Suspended from business” is the date the enterprise registers to start suspending its business. The end date of the legal status of “Suspended business” is the date of the end of the business suspension period announced by the enterprise or the date the enterprise registers to resume business before the notified time limit. The business suspension must also have a definite time limit.
Conditions for suspending business
– The Company needs to notify the Business Registration Office of the business suspension 03 days in advance to receive a confirmation of the Company’s business suspension;
– when the Company registers to suspend its business, the Company’s tax code must be in operation to ensure the tax declaration obligations are transparent before and after the business suspension registration.
Procedures for business suspension
A profile is on hold
– Notice of business suspension
– Minutes of meeting, decision to suspend business according to authority
– Authorization to carry out business registration procedures
– A copy of the applicant’s identification document
Procedure to suspend business
Step 1: Prepare documents
Step 2: The enterprise applies according to the above instructions to the Business Registration Office – Department of Planning and Investment where the enterprise is located. The Business Registration Office hands over the receipt of the application to the enterprise after receiving the notice of business suspension
Step 3:
– Within 02 working days; The Department of Planning and Investment sends information to the tax side to compare the tax owed or not.
– Within 03 working days from the date of receipt of valid dossiers; The Business Registration Office issues a certificate of the enterprise having registered to suspend its business.
Time to suspend business
The duration of business suspension must not exceed 1 year.
After the notice period expires, if the enterprise continues to suspend its business, it must further notify the Business Registration Office. The total period of consecutive business suspension must not exceed 2 years.
If after 2 years of suspension but still not operating again and do not want to dissolve; the company can return to business for a short time, and then apply for a temporary suspension of business.
Thus, the maximum period of business suspension is 2 years.
Please see more articles:
Conditions for protection of business secrets in Vietnam
Business Registration Certificate in Vietnam 2022
Frequently asked questions
During the business suspension, the enterprise must fully pay the outstanding tax, social insurance, health insurance, and unemployment insurance amounts. Therefore, businesses that owe tax are still allowed to temporarily stop operating and are obliged to pay the tax debt in full.
According to the above regulations, an enterprise is only allowed to suspend its business for 1 year and if it wants to suspend its business further, it must notify the Business Registration Office.
In case an enterprise ceases its business operation for 1 year without notifying the business registration authority and the tax authority, the enterprise registration certificate may be revoked.
In case the company registers to suspend its business for the whole calendar year, it is not required to declare tax; submit the financial statements for that year.
In case the Enterprise registers to suspend business for less than a full calendar year, it must still declare tax according to the quarter or month in which the business has operated and submit the financial statements of that year.
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