Many businesses struggle to run effectively in the marketplace. The operations of the companies can’t run smoothly, even when they borrow money from banks and other external creditors to keep the business running and pay employees. They consequently gave bankruptcy some thought. However, not every entity can approach bankruptcy procedures. So, in this article, LSX legal firm will answer: “In which cases bankruptcy procedure not applicable in Vietnam?”
- Law on Enterprise 2020
- Law on Bankruptcy 2014
Bankruptcy under Vietnamese legislation
From a legal perspective: orders, procedures, steps, and stages of the settlement of the request for bankruptcy declaration for the debtor.
According to Clause 2, Article 4 of the Law on Bankruptcy 2014: Bankruptcy means the state of an enterprise or cooperative that can not pay its debts and is declared bankrupt by the People’s Court.
Thus, an enterprise or cooperative is only considered bankrupt when it is unable to pay its debts and is issued a bankruptcy decision by the Court.
In which cases bankruptcy procedure not applicable in Vietnam?
- According to Article 2 of the Law on Bankruptcy 2014, this Law regulates the procedure for submitting, receiving petitions, and initiating the bankruptcy process; the asset liabilities and measures for asset preservation during bankruptcy settlement; the procedure for business operation recovery; the declaration of bankruptcy and implementation of Decisions on the declaration of bankruptcy.
- Business households do not belong to subjects of application of the Law on Bankruptcy 2014. This business entity does not have the status of an enterprise but does business as an individual; therefore not subject to the application of the Law on Bankruptcy 2014.
So, the Bankruptcy Law is applicable to all types of enterprises, cooperatives, and unions of cooperatives established in accordance with the law.
Types of enterprises include forms of State ownership, joint ownership, or private ownership: state-owned enterprises, sole proprietorships, foreign-invested enterprises, limited liability companies, joint stock companies, and partnerships.
Foreign-invested enterprises, including joint ventures and 100% foreign-invested enterprises, all subject to the Law on Bankruptcy. However, a foreign enterprise (understood as an enterprise of foreign nationality, having a commercial presence in Vietnam only through a branch or representative office) cannot declared bankrupt in Vietnam under Vietnamese legislation; this case will get handled by the provisions of the Civil Code and the Civil Procedure Code.
Authority to settle bankruptcy
Article 8 of the Law on Bankruptcy 2014 provides for the authority to settle bankruptcy:
- Article 8. Competence in bankruptcy settlement of the People’s Court
Rights and obligations of involved entities
- Comply with the requests of the Judge, the asset management officers, the asset management enterprises, and civil execution authorities according to the regulations of Law on bankruptcy;
- Provide documents and evidences related to the bankruptcy settlement.
- Request individuals, agencies, and organizations keeping the documents and evidences related to their lawful rights and interests to provide the evidences to the People’s Court.
- Request the Judge, asset management officer, asset management enterprise to collect and verify the documents and evidence which cannot provide or request for assessing and evaluating the assets; request the Judge to conduct an audit of the insolvent entities; request the Judge to convene the testifiers.
- Be informed and allowed to record and make copy of the documents and evidences provided by other involved entities or collected by the Judge.
- Request for employment, change, and cancellation of the temporary emergency measures.
- Receive eligibility notification for performing their rights and obligations.
- Protect or employ a legal guardian to protect their lawful rights and interests.
- Participate in the creditors’ meeting.
- Request for replacing the asset management officers and/or asset management enterprises according to Article 46 of Bankruptcy Law.
- Request the asset management officers and/or asset management enterprises to add more creditors and debtors into the lists of creditors and debtors.
- Advise the asset management officers and/or asset management enterprises to take back the sums of money and/or assets of the debtors.
- Present at the request of the asset management officers and/or asset management enterprise, at the summon of the People’s Court, and comply with the decisions of the People’s Court during the bankruptcy settlement.
- Participating in the management and liquidation of assets at the requests of the Judge, the civil execution authorities, asset management officers, the asset management enterprises.
- Request for reconsidering the decision of the People’s Court.
The cost of bankruptcy and the bankruptcy advance
- Article 23 of the Law on Bankruptcy 2014
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.
Finally, hope this article is useful for you to answer the question about “In which cases bankruptcy procedure not applicable in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: firstname.lastname@example.org
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The requesters must pay the bankruptcy fee according to the regulations of the Law on court fees of People’s Court. The requesters prescribed in Clause 2 Article 5 and Point a Clause 1 Article 105 of the Law on Bankruptcy is exempt from paying this fee.
Firstly, perform rights and fulfill obligations of the involving entities prescribed in Article 18 of this Law.
Secondly, advise the People’s Court on the asset management officers and/or asset management enterprises before the initiation of bankruptcy process.
Thirdly, pay the bankruptcy fee and/or bankruptcy advance except the cases in which the bankruptcy fee and/or bankruptcy advance are exempt.
Fourthly, be honest about submitting requests for the initiation of bankruptcy process
1. Perform rights and fulfill obligations of the involving entities prescribed in Article 18 of this Law.
2. Give opinion on accept or reject a number or all of the requests of the requesters.
3. Publicly announce the Decision on the initiation of bankruptcy process on the receipt of the Decision.