The effects of the Covid-19 pandemic, little or much, have affected the economy of Vietnam and nations around the world. This leads to difficulties in the production and business activities of many enterprises. When facing such fluctuations, most companies will choose the immediate solution of suspending business for a certain period of time. However, not everyone understands clearly the regulations on business suspension. So, in this article LSX legal firm provides: “Business suspension under Vietnamese legislation”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Business suspension
The Law on Enterprise 2020 does not have any specific provisions on the concept of “temporary business suspension”. However, Clause 1, Article 41 of Decree 01/2021/ND-CP stipulates about business suspension as follows:
“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.”
In a shorter and simpler way, you can understand “business suspension” as Business suspension means when an enterprise temporarily stops carrying out business and production activities for a period of time.
How long can a business suspend?
According to Clause 1, Article 66 of Decree No. 01/2021/ND-CP, The business suspension period must not exceed 01 year each time.
Enterprises must send a notice to the Business Registration Office – where the enterprises headquartered at least 03 working days before the date of business suspension.
In case an enterprise wishes to continue suspending business after the notice period expires, it must notify the Business Registration Office at least 03 working days before the date of resumption of business suspension.
Dossiers for business suspension
Dossiers for business suspension for a Joint-stock company:
- Notice of business suspension;
- Decision and copy of meeting minutes of the Board of Directors on business suspension;
- Authorization letter for the individual to carry out the procedure (if not self-implemented);
- Copy of the company’s business registration certificate (if any).
Dossiers for business suspension for a limited liability company:
- Notice of business suspension;
- Decision and copy of meeting minutes of the company owner on business suspension (for Single-member limited liability companies);
- Decision and copy of meeting minutes of the Board of Members on business suspension (for limited liability companies with two or more members);
- Power of attorney for the individual to carry out the procedures (if they cannot do it themselves);
- Copy of the company’s business registration certificate (if any).
Procedures for business suspension with tax authorities
According to Article 14, Circular 151/2014/TT-BTC:
- For taxpayers who carry out business registration procedures at the business registration office, they must notify in writing of the business suspension or resumption of business operations to the business registration office where the taxpayer registered in accordance with the regulations.
- For taxpayers subject to registration for grant of tax identification numbers directly at tax authorities; Before suspending business, taxpayers must send a written notice to the tax authority directly managing them at least 15 days before the business suspension.
So, if the company operates under the enterprise law, it does not need to send a notice to the tax authorities. Accordingly, the business registration authority and the tax authority will notify each other no later than 02 working days from the date of receipt of the taxpayer’s notice.
On the other hand, if the taxpayer registers a tax identification number directly at the tax office; then that person must obtain certification from the tax authority before suspending business.
Submit dossiers for business suspension online
To submit a dossier of business suspension online, enterprises follow the following order:
Step 1: Prepare a set of business suspension dossiers corresponding to the type of business and prepare valid documents.
Step 2: Submit your application online at: https://dangkykinhdoanh.gov.vn (enterprise must have a business registration account). The enterprise sends a notice to the Business Registration Office where the enterprise has registered its business operation at least 03 working days before the date of business suspension.
Step 3: Within 03 working days after receiving the valid application, the Business Registration Office will send a receipt to the enterprise.
- Application valid: Received a certificate of business suspension.
- Application invalid: The business registration office sends a notice requesting amendments and supplements (return to step 2).
Suspend the business of an enterprise
Suspending business gets a way for businesses to have time to improve, change, and complete the apparatus to do business more effectively in the future.
In fact, most business owners do not know that when the company suspends business, they have to notify the Department of Planning and Investment where the company located. This notification is mandatory; If not, they will face the risk of an administrative penalty of up to 2 million VND (According to Article 32 of Decree 50/2016/ND-CP).
Additionally, when the enterprise has actually suspended without notifying the business suspension, it will continue to perform the legal obligations regarding:
- Declare and report tax quarterly and annually for the company.
- The tax authority will still conduct periodic inspections of business establishments.
- Obligation to declare and pay compulsory social insurance for employees even though the company has stopped operating in reality;
- Obligation to pay annual license tax even though no longer doing business.
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
Method 1: Submit the application directly to the Business Registration Office of the Department of Planning and Investment.
Method 2: Submit the application for business suspension online.
According to the old regulations, the maximum duration of business suspension is 2 years. However, Decree 01/2021/ND-CP no longer stipulates this provision. Therefore, each time suspending business is up to 1 year. However, businesses can suspend their business many times in a row (no time limit).
For monthly tax reports:
You do not have to submit a tax report if the business suspends for a full month.
You have to submit a tax report if the business suspends for less than a month.
For quarterly tax reports:
You do not have to submit a tax report if the business suspends for a full quarter month.
You have to submit a tax report if the business suspends for less than a quarter.
For tax reports by calendar year or fiscal year.
In case you suspend for a whole year, you do not have to submit annual finalization dossiers and financial statements (financial statements).
In case you suspend for less than a whole year, you must submit.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Business suspension under Vietnamese legislation”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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