Procedures for business suspension of business household in Vietnam
A household business-a type of business where the owner solely takes responsibility for his or her property. Therefore, many owners who have established for a while have the desire to temporarily stop doing business. To carry out the procedures for business suspension of any type, you need to have a clear understanding of the regulations prescribed by the law. So, in this article LSX legal firm gives you: “Procedures for business suspension of business household in Vietnam”
Legal grounds
- Law on Enterprise 2020
- Decree 47/2021/ND-CP
- Decree 01/2021/ND-CP
Business household
Business household registered by an individual or household members; take responsibility for all their assets for the business operations of the household.
In case household members register as business households, they shall authorize one member to act as the business household representative.
For individual registering business households, in another word, the person authorized by household members to act as the business household representative is the owner of the business household.
Further information:
Legal status: does not have legal status.
Member: Business household registered to be established by an individual or household members.
Business Location: A business household can operate at many locations, but must choose one location to register its head office. Also, Business households must notify the tax administration agency, the market management agency where they conduct business for the remaining business locations.
Business scale: Small scale, personal and household nature.
Invoice: Only direct sales invoices and can not issue VAT invoices (red invoices).
Seal: Does not have the seal of the business.
Tax:
- License tax: Revenue over 100 million VND to 300 million VND: 300k/year; Revenue over 300 million VND to 500 million VND: 500k/year; Revenue over 500 million: 1 million/year.
- Personal income tax: Depending on each industry and business line, the tax rate ranges from 0.5% to 2%.
- Value-added tax: Depending on each industry or business line, the tax rate ranges from 1% to 5%.
Procedures: Simple establishment procedure, easy tax declaration, and payment.
Conditions to establish a business household
Individuals and household members (Vietnamese citizens) with full civil act capacity as prescribed by the Civil Code have the right to establish business households in accordance with the law; except for the following cases:
- Firstly, minors, people with limited civil act capacity, persons who have lost their civil act capacity, people with difficulties in cognition and behavior control;
- Secondly, persons examined for penal liability, detained, serving a prison sentence; serving administrative sanctions at a compulsory detoxification establishment, compulsory educational institution, or banned by the Court from holding certain positions as well as prohibited from practicing or doing certain jobs;
- Other cases as prescribed by relevant laws.
The above-mentioned individuals and household members may only register one business household nationwide; and have the right to contribute capital; buy shares; purchase capital contribution in an enterprise as an individual.
Individuals and household members who register as business households cannot concurrently be the owner of a sole proprietorship; or general partners of a partnership company; unless otherwise agreed by the remaining general partners.
Procedures for business suspension of business household
Step 1: Prepare dossiers
- Notice of business suspension of business household;
- A copy of the minutes of the meeting of household members on the registration of business suspension in case the household members register as a business household;
- In case of authorization: A written authorization for the individual to submit the application and receive the results according to the provisions of law; A valid copy of the authorized person’s individual identification papers.
Step 2: Submit dossiers
The business household shall submit its application at the district-level business registration office where it has registered its business.
Step 3: Receive results
After receiving the notice, the business registration authority of the district shall hand over the receipt to the business household. Then, within 03 working days from the day on which the valid application submitted, the business registration authority of the district shall issue a certificate of the business household’s business suspension registration.
What is the penalty for not announcing the business suspension?
Business households that violate regulations on notification of business suspension may subject to a warning; a fine from 500,000 VND to 2,000,000 VND; and may have the business household registration certificate revoked.
Besides, Article 42 of Decree 50/2016/ND-CP stipulates:
Article 42. Violations against regulations on business household suspension
1. A warning or A fine of VND 500,000 – VND 1,000,000 shall be imposed for suspending the business without sending a written notification or punctually sending a written notification to the business registration authority of the district where the business household was registered.
2. A fine of VND 1,000,000 – VND 2,000,000 shall be imposed for any of the following violations:
a) Failure to inaugurate the business within 06 months from the issuance date of the certificate of business household registration;
b) Suspending the business for more than 6 consecutive months without notifying the business registration authority of the district.
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
Clothing and coffee businesses should register to establish an individual business household for cheaper, simpler, easier service fees, dossiers, and operating taxes.
For startups, optimizing the model to survive is important. At least for individual business households, they no need to hire an accountant to do reporting. They also face little risk of sanctioning by the management agency.
Firstly, in terms of business scope: Some business lines can not register for individual business households. That means the scope of business is narrower than that of a company.
Secondly, in terms of capital: Since a household business is a model of a household, there is a reciprocal relationship between its members, so there is no complexity in capital management. But usually, no one invests in a household business because the percentage division among family members not really focused and separated.
Thirdly, in terms of import and export, the law limits household businesses more than companies.
It isn’t. Business household does not have a seal, cannot open branches or representative offices, do not have the rights that enterprises have such as import-export activities or apply the Law on Bankruptcy when the business makes a loss.
Contact LSX Law Firm
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