Guidance on procedures for dissolution of enterprises in Vietnam

by BichNgoc

For some reason, if the enterprise does not want or can no longer conduct production and business activities; the dissolution of the enterprise may be a method for the enterprise to legally withdraw from the market. In the following article; LSX Lawfirm will guide you through the business dissolution procedure: “Guidance on procedures for dissolution of enterprises in Vietnam”, as follows:

Law on enterprises 2020

Decree No. 01/2021/ND-CP

Circular No. 47/2019/TT-BTC

What is corporate dissolution?

Dissolution of an enterprise is the process of ending the existence of an enterprise in the condition that the enterprise has the ability to pay or ensure the payment of its property obligations. Dissolution is a procedure for an enterprise to legally withdraw from the market.

You can also refer to the article related to company division in Vietnam, or Registration company in Vietnam after a full or partial divisionCease existence of divided company in Vietnam or Names of Vietnam’s branches and representative offices.

Cases of enterprise dissolution

According to the provisions of Clause 1, Article 207 of the Enterprise Law 2020; an enterprise is dissolved in the following cases:

  • End of operation term stated in the company’s charter without decision on extension;
  • So, according to resolutions and decisions of the business owner, for private enterprises; of the Members’ Council, for partnerships, of the Members’ Council, of the company owner, for limited liability companies; of the General Meeting of Shareholders for joint-stock companies;
  • Then the company no longer has the minimum number of members as prescribed by the Law on Enterprises for a period of 06 consecutive months without carrying out procedures to change the type of enterprise;
  • The certificate of enterprise registration is revoked, unless otherwise provided for by the Law on Tax Administration.

Conditions for enterprise dissolution

An enterprise may only be dissolved when it meets the following conditions:

(1) The enterprise ensures the payment of all debts and other property obligations;

(2) Then the enterprise is not in the process of settling disputes at Court or Arbitration.

Guidance on procedures for dissolution of enterprises in Vietnam

In case of dissolution of the enterprise; it is not due to the revocation of the enterprise registration certificate or the decision of the Court

Step 1: Pass the resolution, decide to dissolve the enterprise

The owner of a private enterprise, the Members’ Council of a partnership, the Members’ Council, the owner of a limited liability company, the General Meeting of Shareholders of a joint-stock company passes resolutions and decisions on dissolution of the enterprise. .

A resolution or decision on dissolution of an enterprise must contain the following principal contents:

  • Name and address of the head office of the enterprise;
  • So, reason for dissolution;
  • Time limit and procedures for contract liquidation and payment of debts of the enterprise;
  • So, a plan to handle obligations arising from the labor contract;
  • So, full name and signature of the owner of the private enterprise; the owner of the company, the Chairman of the Members’ Council, the Chairman of the Board of Directors.

Step 2: Announce the resolution, decision to dissolve the enterprise

Within 07 working days from the date of adoption of the resolution or decision on dissolution; the enterprise shall send a notice of enterprise dissolution to the Business Registration Office where the enterprise is headquartered. The notice must be accompanied by the following documents:

(1) So, Resolutions, decisions and meeting minutes of the Members’ Council; for limited liability companies with two or more members; partnerships, of the General Meeting of Shareholders, for joint-stock companies; resolution, decision of the company owner, for a one-member limited liability company, on the dissolution of the enterprise;

(2) Debt settlement plan (if any).

So, Resolutions and decisions on dissolution must be notified to employees in the enterprise and publicly posted at the head office; branches and representative offices of the enterprise.

In case the enterprise has unpaid financial obligations, it must simultaneously send the resolution, the dissolution decision of the enterprise, the debt settlement plan to the creditors, persons with related interests and obligations. .

Step 3: Terminate branch, representative office, business location

If an enterprise has a branch, representative office, or business location, the enterprise must carry out procedures for terminating these branches, representative offices and business locations at the business registration office where the enterprise is located; set up branches, representative offices, business locations before submitting the application for registration of dissolution of the enterprise.

Step 4: Liquidation of business assets

The owner of a private enterprise, the Members’ Council or the company owner, or then the Board of Directors directly organizes the liquidation of the enterprise’s assets; unless the company’s charter provides for the establishment of a separate liquidation organization.

Step 5: Paying the debts of the business

The enterprise shall settle all outstanding obligations of the enterprise to creditors; tax authorities, employees and other financial obligations to the State according to the plan established by the enterprise.

The enterprise’s debts are paid in the following order:

(1) Salary arrears, severance pay, social insurance, health insurance; unemployment insurance as prescribed by law and other benefits of employees under the collective labor agreement and signed labor contract.

(2) Tax debt

(3) Other debts

After then 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. .

Step 6: Submit the application for dissolution of the enterprise

Accordingly, within 05 working days from the date of payment of all debts of the enterprise; the legal representative of the enterprise shall send the application for registration of dissolution of the enterprise to the Business Registration Office; where the enterprise is located. main.

An enterprise dissolution registration dossier includes:

(1) So notice of dissolution of the enterprise

(2) Then, 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)

So, within 05 working days from the date of receipt of the application for registration of dissolution of the enterprise; the Business Registration Office shall issue a notice of the dissolution of the enterprise; if it does not receive a refusal from the tax authority.

Fees: free

Related questions

An enterprise dissolution decision must contain the following principal contents

Name and address of the head office of the enterprise;
The reason for dissolution;
Time limit and procedures for contract liquidation and payment of debts of the enterprise; the time limit for debt payment and contract liquidation must not exceed 06 months from the date of approval of the dissolution decision;
The plan to handle obligations arising from the labor contract;
Full name, signature of the legal representative of the enterprise

Approve the decision to dissolve the company

To be able to proceed with the dissolution of an enterprise, the enterprise must first hold a meeting to approve the dissolution decision. Accordingly, the dissolution must be approved by the owner for a one-member limited liability company, by the Members’ Council for a limited liability company with two or more members, by the General Meeting of Shareholders. shareholders for joint-stock companies and by general partners for partnerships.
This decision represents the consensus of the members on issues related to the reasons for dissolution; deadlines and procedures for contract liquidation and debt payment; a plan to handle obligations arising from the labor contract and the establishment of a property liquidation team.

Contact LSX Lawfirm

Finally, hope this article is useful for you to answer the question about: “Guidance on procedures for dissolution of enterprises in Vietnam”, please contact  LSX Law firm : +84846175333 or Email: hoangson@lsx.vn

5/5 - (1 vote)

You may also like

Leave a Comment