In the course of business, many businesses have to suspend operations for many objective reasons. To suspend a company from business, the owner has to pay attention to the law’s regulations regarding the business suspension. However, not everyone understands clearly about this issue, particularly the time limit of suspension. So, in this article LSX legal firm would like to answer the question: “How long can a company suspend from business in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Business suspension
Suspending business means an enterprise carrying out administrative procedures with the business registration authority as well as the competent authority for the purpose of not doing business for a certain period of time.
This means that the enterprise does not carry out any production or business activities during the temporary shutdown. Also, do not sign contracts with partners and customers, not issue invoices, and do not have to declare and finalize tax when it comes to the final settlement period.
Currently, there are many different reasons leading to enterprises having to decide to suspend their business such as enterprises having financial and human resource difficulties and cannot continue to operate, enterprises having new orientations in their business structure, or corporate organization…
Besides, enterprises must suspend business operations when they no longer satisfy business conditions; according to regulations at the request of the business registration agency; or other competent authority.
When an enterprise wishes to suspend its business, it must carry out procedures for business suspension and notify the suspension to the business registration office and tax agency that directly manage the business.
How long can a company suspend from business?
Clause 1, Article 66 of Decree 01/2021/ND-CP stipulates that each notified suspension period must not exceed one year.
- When an enterprise or its branch/representative office/business location suspends its business or resumes its business ahead of schedule, the enterprise shall send a notification to the Business Registration Office of the province where the enterprise or its branch/representative office/business location is located at least 03 days before the planned date of suspension or resumption.
- If the enterprise or its branch/representative office/business location is still suspended after the notified suspension period, another notification must be sent to the Business Registration Office at least 03 days before the planned date of suspension.
Maximum business suspension period
After the end of the business suspension period, if the enterprise continues to suspend, it must send a second notice to the Business Registration Office.
- The total period for the suspension of business in consecutive times must not exceed 2 years.
- After receiving the correct dossiers in accordance with the current law, within 3 working days from the date the Business Registration Office receives the valid dossiers, it has to process the application.
Dossiers for application to suspend a company
Dossier for business suspension of a joint stock company
- Firstly, a notice of business suspension.
- Secondly, decision and copy of meeting minutes of the Board of Directors on business suspension.
- Thirdly, an authorization letter for the individual to carry out the procedure (if any).
- Fourthly, a copy of the company’s business registration certificate (if any).
Dossier for business suspension of a limited liability company
- Firstly, a notice of business suspension.
- Secondly, decision and copy of meeting minutes of the company owner on business suspension (for single-member limited liability companies).
- Thirdly, decision and copy of meeting minutes of the Board of Members on business suspension (for limited liability companies with two or more members).
- Fourthly, power of attorney for individuals to carry out the procedure (if any).
- Lastly, a copy of the company’s business registration certificate (if any).
Instructions on procedures to suspend business
Step 1: Prepare dossiers for business suspension
A business suspension dossier should include the following main contents:
- Notice of business suspension.
- The decision to suspend business.
- A valid copy of the meeting minutes of the Board of Members for limited liability companies with two or more members; of the Board of Directors for joint-stock companies; of general partners for a partnership company.
Step 2: Submit an application for business suspension
After preparing the application for temporary business suspension, submit the application to the Lam Dong Department of Planning and Investment.
Methods to perform:
- Submit directly to the Business Registration Office.
- Submit through the National Business Registration Portal at www.dangkykinhdoanh.gov.vn
Step 3: Receive and verify the application
The Business Registration Office handles the application; consults relevant agencies (if necessary) during the settlement process. Then, complete the results of the application and update the status of the application on the online database so that the enterprise can look up the status of the application.
Step 4: Submit notice of business suspension
In case the dossier needs to be amended or supplemented; The competent authority shall notify the enterprise of amendments and supplements.
Step 5: Complete the business suspension procedure
After submitting the notice of business suspension, your business will go into the “suspension” status from the time indicated on the notice. Accordingly, every business activity after the date of suspension must stop. Enterprises can resume operations after the suspension period expires, or request to resume operation before the suspension period has not expired.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- 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
Enterprises must suspend business in parallel with completing tax obligations in case the tax code is not locked.
In case an enterprise is temporarily suspending its business operation and wants to return to operation before the deadline, it must send a notice to the business registration office within 3 days before the business resumes operation.
Article 212 of the Law on Enterprise 2020 stipulates that an enterprise will have its business registration certificate revoked in case the enterprise stops operating for one year without notifying the business registration authority and the tax authority.
Besides, penalties for violations of notification obligations:
A fine ranging from VND 1,000,000 to VND 2,000,000 for one of the following acts: Failure to notify the business registration office on time of the duration of suspension or resumption of business;
A fine ranging from VND 2,000,000 to VND 3,000,000 for one of the following acts: Registering for business suspension but failing to notify the branch’s operation suspension; representative office, business location;
Contact LSX
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