In the market economy, under the influence of economic laws; The withdrawal of enterprises from the market is an inevitable phenomenon. Currently, Vietnamese law recognizes many ways that businesses can withdraw from the market. Dissolution is one of the ways that businesses use. However, it can that the dissolution of the enterprise not only affects the owner of the enterprise but also affects the interests of many other entities related to the enterprise and may cause many consequences on the economic and social aspects. So, for cooperatives, is there anything special about the dissolution of the cooperative in accordance with the law? LSX Lawfirm will give you an article about: “Handle assets when the cooperative is dissolved in Vietnam”, as follows:
Cooperative Law 2012
The concept of dissolution of cooperatives in Vietnam
Accordingly the provisions of Clause 1, Article 3 of the Law on Cooperatives 2012: “Cooperative is a collective economic organization, co-ownership, has legal status; voluntarily established by at least 07 members and cooperate and support each other in production and business activities; create jobs to meet the common needs of members, on an autonomous basis; self-responsibility and equality; democracy in cooperative management”.
Union of cooperatives is a collective economic organization, co-ownership, legal person; voluntarily established by at least 04 cooperatives and cooperate with each other in production activities; doing business to meet the common needs of member cooperatives; on the basis of autonomy and self-responsibility; equality and democracy in the management of unions of cooperatives.
Reasons for dissolution of cooperatives in Vietnam
A cooperative can be dissolved for two reasons as follows:
Firstly, the voluntary dissolution of the cooperative agreed upon by the Congress of cooperative members with the termination of business activities of the cooperative.
Secondly, the compulsory dissolution of cooperatives shall decide by the district-level People’s Committees on compulsory dissolution of cooperatives if
- The cooperative has been inactive for 12 consecutive months
- The cooperative fails to secure the minimum number of members as prescribed by this Law for 12 consecutive months
- Then the cooperative cannot hold the annual general meeting of members for 18 consecutive months without reason
- Registration certificate revoked
- According to the Court’s decision
Handle assets when the cooperative is dissolved in Vietnam
So, the handling of the cooperative’s assets upon dissolution is specified in Article 49 of the Law on Cooperatives 2012. Accordingly, the undivided property shall be disposed of in the end; after using all other assets of the cooperative to pay the main obligation.
Article 21 of Decree 193/2013/ND-CP clearly stipulates how to handle undivided assets of cooperatives.
- The portion of the property value formed from the grant; non-refundable support of the State; then it shall be transferred to the local budget at the same level with the registration agency of cooperatives and unions of cooperatives;
- So, upon termination of membership, membership of a cooperative; the amount given or given under the agreement is an undivided property; capital and other assets specified in the Charter as undivided assets; upon termination of membership or membership of a member cooperative; then the general meeting of members shall decide the appropriate handling plan;
- The value of assets formed from the annual investment and development fund: has been decided by the general meeting of members to include in undivided assets when the cooperative; union of cooperatives ceases to operate; the amount given or given under the agreement is an undivided property; capital and other assets prescribed by the charter as undivided assets in the cooperative; union of cooperatives ceases to operate; then the general meeting of members decides to transfer it to the local government or another organization located in the area for the purpose of serving the interests of the local community;
- Land use right allocated or leased by the State; shall comply with the provisions of the law on land.
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
According to the provisions of Article 188 of the Enterprise Law 2020: Each individual can only establish one private enterprise. Therefore, the case where an individual establishes many private enterprises in different areas is a violation, not in accordance with the provisions of law.
An application for enterprise registration includes the following principal details:
Address of the head office of the enterprise, phone number; fax number, email (if any);
Tax registration information;
Expected number of employees;
Full name, signature, contact address, nationality, legal document information of the individual, for the owner of a private business and a general partner of a partnership;
Full name, signature, contact address, nationality, information on legal papers of the individual for the legal representative of a limited liability company or a joint stock company.
Contact LSX Lawfirm
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