Facing the complicated developments of the covid19 pandemic, many businesses are unable to continue operating at the moment. Should the business be dissolved or suspended? Let’s find out about: “Enterprise dissolved or suspended business in Vietnam”
Law on enterprise 2020
Decree No. 01/2021/ND-CP
Distinguish between dissolution and business suspension in Vietnam
- Suspending business” is the legal status of an enterprise that is in the process of temporarily suspending 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 enterprise that temporarily ceases to operate is still a legal entity.
- Dissolution of an enterprise is the legal status of an enterprise having ceased all operations and having its business registration certificate revoked.
- So, the dissolved enterprise has its legal status and related obligations terminated.
Suspension of business:
Enterprises must notify in writing the Business Registration Office no later than 03 working days before the date of suspension or resumption of business before the notice period.
An enterprise may only be dissolved when it ensures payment of all debts and other property obligations and is not in the process of settling disputes at Court or Arbitration. Business owners and related people must be jointly responsible for the debts of the business.
Procedure to proceed
Suspension of business:
Step 1: At least 03 days before the date of business suspension, the enterprise shall submit a dossier of notice of business suspension to the business registration office where the enterprise’s head office is located.
Then Step 2: Within 03 days from the date of submission of the application, the business registration authority checks the validity of the application and issues a certificate of business suspension of the enterprise.
Implementation time: 03 working days from the date the enterprise submits the application for business suspension.
Step 1: Terminate the branch, representative office, business location of the enterprise (if any)
Then Step 2: Approving the decision to dissolve the enterprise
Then Step 3: Announce the dissolution of the enterprise
Step 4: Liquidate assets, pay debts of the business
Finally, step 5: The business registration authority updates the status of the business after the payment obligation has been completed
Implementation time: At least 180 days from the date the decision on dissolution of the enterprise is sent
- The business is terminated.
- So, no longer a legal person
- Termination of the tax code of the enterprise.
Suspension of business:
- Terminate the operation of the enterprise for a certain period of time, upon the end of the suspension period, the enterprise will return to normal operation.
- Enterprises still have legal status.
- During the period of business suspension, the enterprise must fully pay the outstanding tax, social insurance, health insurance and unemployment insurance amounts; continue to pay debts, complete the performance of contracts signed with customers and employees, unless otherwise agreed by enterprises, creditors, customers and employees.
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
Enterprise dissolved or suspended business in Vietnam
So, with the legal provisions on dissolution and business suspension, if you choose to suspend your business, you can proceed more easily and quickly. After the expiration of the business suspension period, the enterprise may continue to conduct business activities.
However, to choose to dissolve or suspend business depends on the actual status of each enterprise. If the business can continue to operate after a period of time, it will choose to suspend its business. In case it is not possible to continue doing business, the enterprise may choose to dissolve the enterprise.
Enterprises choose to suspend business when:
- Intend to restructure the company, re-plan business strategies and goals.
- The enterprise is still able to recover and restructure the business after the crisis.
The number of employees is not too much.
Enterprises choose to dissolve when:
- Enterprises are no longer capable of self-recovery.
- Company leaders could not come up with solutions and plan to restructure the business.
- The number of employees is large, affecting the ability to pay salaries to employees and social insurance fees.
– Salary arrears, severance allowance, social insurance, health insurance, unemployment insurance as prescribed by law and other benefits of employees under collective labor agreement and contract signed labor;
– Tax debt;
– Other debts;
An enterprise dissolution dossier includes the following documents:
Notice of enterprise dissolution;
Report on liquidation of corporate assets; the list of creditors and the amount of debt paid, including payment of all tax debts and payment of social insurance, health insurance and unemployment insurance premiums for employees after the decision to dissolve the business career (if any)
– Concealing or dispersing assets;
– Waiver or reduction of debt collection rights;
– Convert unsecured debts into secured debts with the assets of the enterprise;
– Sign a new contract, except for the case of enterprise dissolution;
– Pledge, mortgage, gift or lease of property;
– Termination of performance of an effective contract;
– Mobilizing capital in any form.
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Finally, hope this article is useful for you to answer the question about: “Enterprise dissolved or suspended business in Vietnam”. If you need any further information, please contact LSX Law firm : +84846175333 or Email: email@example.com