Suspend business for more than 2 years under Vietnamese legislation
In the context that the world and domestic economies affected heavily by the Covid-19 pandemic, many businesses choose to suspend their business. Regulations on business suspension have changed a lot after the Enterprise Law 2020 took effect. With this change comes a question many business owners wonder does the law allow them to suspend business for more than 2 years? What are the regulations on business suspension for more than 2 years? So, to answer this question, LSX legal firm provides: “Suspend business for more than 2 years under Vietnamese legislation”
Legal ground
- Law on Enterprise 2020
Suspend business for more than 2 years
According to the provisions of the law, an enterprise can suspend business many times. However, the total consecutive period must not exceed 02 years.
That means an enterprise can announce the suspension of business many times in a row; as long as the total time equal to or less than 02 years.
From this regulation, we can understand, that if the enterprise does not suspend business continuously, then the total business suspension period can last more than 2 years, even 5 years, 10 years.
For example, Enterprise A suspended business from September 2016 to the end of June 2017. Enterprise A then continued to extend the time limit from July 2017 to the end of July 2018. After that, the business returned to normal operation and in September 2018, enterprise A continued to send a notice of business suspension from September 2018 to the end of May 2019.
Thus, enterprise A has a total business suspension time exceeding 02 years; (02 years and 8 months) but there is no continuity because there is a break of 02 months.
The result of the business suspension notification procedure is a Certificate of the enterprise’s registration of business suspension-one of the grounds for determining the suspension of the enterprise as well as obligations arising from the suspension of business.
Therefore, when an enterprise has a need to suspend further business when the time exceeds 02 years, the enterprise needs to notify the business registration office as soon as possible (at least 03 days); to be reviewed and the suspension of business is legal.
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.
Term of suspension of business
According to the provisions of Article 58 of Decree 78/2015/ND-CP; the duration of business suspension shall not exceed 01 year.
In case of expiration of 01 year but the enterprise still needs to temporarily suspend its business. Then the enterprise can extend the mentioned time limit; but the total period of business suspension in a row must not exceed 02 years.
At least 15 days before suspending business; the enterprise must carry out the procedures for notifying the business suspension to the business registration office where the enterprise has registered.
If the enterprise fails to carry out the notification procedures or violates the above notice time limit; then the enterprise will be administratively sanctioned according to the regulations:
- An enterprise will be fined from VND 1,000,000 to VND 2,000,000 when it fails to notify or fails to notify the Business Registration Office of the time and duration of its business suspension.
- An enterprise will be fined from VND 2,000,000 to VND 3,000,000 if the enterprise registers to suspend its business operations but fail to notice the suspension of representative offices, branches, and business locations.
Additionally, if the enterprise suspends its business operation for 1 year without notifying the Business Registration Office, the Certificate of Business Registration will also be revoked.
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
If your company suspends business for 1 full calendar year or does not incur tax obligations to the state; then it is not required to submit tax finalization documents. On the contrary, if your company suspends business for less than a calendar year, it must submit a tax finalization dossier to the tax agency directly managing your company.
Usually, businesses declare reasons such as objective factors, business processes, need for improvement, etc.
Step 1: Submit a dossier including the business registration office’s decision to suspend business.
Step 2: Perform the outstanding tax obligations, and fully submit the tax returns of the month or quarter before the business suspension. Also, businesses must submit declarations such as the Finalization of corporate income tax; personal income, financial statements, and notes to financial statements of the year in which the business operates.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Suspend business for more than 2 years under Vietnamese legislation”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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