Limitations of the law on conditions for enterprise dissolution in Vietnam
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Legal grounds
Law on enterprise 2020
Limitations of the law on conditions for enterprise dissolution in Vietnam
Firstly
So; whether it is a case of voluntary dissolution or forced dissolution, the enterprise must also meet these conditions dissolved; otherwise the enterprise will not be able to terminate its operation by dissolution procedure. In fact, it is not easy to require a dissolved enterprise to pay off all its debts and property obligations.
Thus, if the enterprise fails to ensure the payment of all debts and other property obligations; it is not to terminate its operation in the form of enterprise dissolution; but must comply with the bankruptcy procedure of the enterprise.
Secondly
A common problem is; The enterprise pay off all debts, so it should carry out procedures for dissolution, but after conducting the liquidation and division of assets, do not able to pay off all debts. To avoid the transition from dissolution to bankruptcy; in this case as well as in other cases; the enterprise can still dissolve in case of non-payment of debts; provided that the creditors have written approval for the dissolution of the enterprise. In fact, there have been many cases where creditors did not know until the business was dissolved. Then; Creditors have the right to sue the business manager for damages.
Thirdly
Such provision of dissolution conditions is unreasonable; It is not necessary, especially in the context that in the next decades, enterprises cannot easily go bankrupt under the Bankruptcy Law. It is necessary to have a broader and clearer explanation of the dissolution regulation in order to meet the fact that; instead of bankruptcy; the enterprise can still be dissolved in case of failure to “pay all debts and other property obligations”; but all creditors agree to dissolve. Regulations on the condition of “guaranteeing full payment”; then how is it considered as a guarantee of full payment; has not been specified, because “full payment guarantee” or “full payment” are two concepts and the level of implementation is different.
Bankruptcy can be understood as a case of forced dissolution.
Then
If creditors own most or even all of the debt; If you agree to allow voluntary dissolution in case the enterprise fails to pay all or part of its debts, there is no reason not to accept such agreement. The interests of creditors in the case of accepting the dissolution of the enterprise; more likely to secure than bankruptcy. Voluntary dissolution will be faster time, lower cost; simpler procedures; processing efficiency is higher and the legal consequences are milder than bankruptcy..
So; it is necessary to clearly define the method of “payment guarantee” on the basis of ensuring the general principles of the Civil Code. Specifically; if the enterprise can reach an agreement with the creditor; can liquidate debts of the dissolved enterprise by; transfer the debt repayment obligation to the business owner (private business owner; company member).
Then; transferee – the owner of a sole proprietorship or a company member is obligated to continue to pay the debts of the dissolved business to its creditors. If the latter owner of a private business; or a company member fails to fulfill the debt payment obligation upon dissolution; the creditor has the right to initiate a civil lawsuit to protect his/her legitimate rights and interests.
This is consistent with the Civil Code 2015; on ensuring the performance of property and practical obligations, creating conditions for enterprises to quickly and healthy exit from the market, while also ensuring the interests of relevant entities.
You can also refer to the article related to Procedures of dissolution of state enterprises in Vietnam.
Related articles:
State management of enterprise registration in Vietnam
Summary of all cases of land expropriation by the State in Vietnam
Related questions
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.
– Considering the factors to ensure an organization is a legal entity, we compare:
– In terms of the condition “established in accordance with the law”
– In terms of organizational structure conditions
– Finally, in terms of the independence of the property and the responsibility to perform the obligations
An application for enterprise registration includes the following principal details:
Company’s name;
Address of the head office of the enterprise, phone number; fax number, email (if any);
Business;
Authorized capital;
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.
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