The current; conditions for enterprise dissolution in our country assessed as significantly improved by the business community; and achieved better results than before. The article below will introduce and clarify “Conditions for enterprise dissolution in Vietnam”.
Law on enterprise 2020
The concept of business dissolution in Vietnam
Enterprise dissolution is the procedure to terminate the existence of an enterprise; as a business entity by liquidating the assets of the business to repay its creditors.
So; enterprise dissolution is the process of terminating the existence of an enterprise in terms of its ability to pay; or secure payment of property obligations of the enterprise. Dissolution is a procedure for an enterprise to legally withdraw from the market.
You can also refer to the article related to Procedures of dissolution of state enterprises in Vietnam.
State management of enterprise registration in Vietnam
Summary of all cases of land expropriation by the State in Vietnam
Legal characteristics of enterprise dissolution in Vietnam
- Basic, so Enterprise dissolution is a process with activities aimed at ending the existence of the enterprise; firms to withdraw from the market. This is the process that takes place with activities; economic activities (liquidation of assets, payment of debts) and legal activities (administrative procedures to “delete” the name of an enterprise at the business registration office).
- So, regarding the reason for dissolution: the reasons for dissolution are quite diverse; may stem from a violation of the law of the enterprise or the voluntary will of the business owner. Most businesses dissolve when the investor has no need to continue doing business; or business losses but not yet to the extent of inability to pay debts due.
The business’s reason for breaking the law, together with the application of the suspension of operation and the withdrawal of the license, will lead to the case of forced dissolution; for example: the case of false declaration of business registration documents; illegal business, the number of members dropped below the minimum without noticing, etc.
- Regarding the dissolution conditions; Enterprises only carry out dissolution procedures to withdraw from the market when they ensure to pay all debts and fulfill all property obligations. If you are unable to pay the due debt; Enterprises that are subject to the application of bankruptcy law to terminate operations.
- Subjects deciding on dissolution: the owner of the enterprise is the person who decides to dissolve the enterprise. The business registration authority does not have the authority to agree; or oppose the dissolution but only consider the validity of the dissolution dossier; and when there is no complaint about the dissolution, it will decide to update the “dissolved” status of the enterprise on the National Portal; on business registration. For cases of compulsory dissolution; the business owner forced to decide on the dissolution of the enterprise; on the basis of the decision to suspend the operation; revoke the certificate of enterprise registration of the competent authority or the decision of the court.
In this case; although not directly deciding to dissolve, but in essence; the competent state agency can consider as the subject of the decision to dissolve the enterprise; because the business owner made the decision to dissolve without coming from his free will.
The enterprise’s legal representative shall send the enterprise dissolution dossier to the business registration agency within 05 working days from the date of payment of all debts of the enterprise.
After the dissolution costs and debts have been paid, the remainder shall be divided among the private business owners, members, shareholders or company owners according to the percentage of ownership of contributed capital or shares.
The business registration agency has the authority to handle violations of the law on business registration; revoke the certificate of enterprise registration and request the enterprise to carry out dissolution procedures in accordance with the provisions of the Law on Enterprise 2020. Competent Courts to issue decisions to request dissolution of enterprises (Article 209 Enterprise Law 2020)
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