Facing the complicated situation of the Covid-19 epidemic, many businesses are in a deadlock situation, unsecured business activities lead to losses. Faced with that situation, many businesses have to go bankrupt, however, if they still have a possibility of development in the future, businesses can suspend their business operations for a certain period of time. So, in this article LSX legal firm provides: “Maximum period a business can suspend its business in Vietnam?”
Legal ground
- Law on Enterprise 2020
Business suspension?
“Suspension of business” means the legal status of an enterprise in the period of temporary business suspension as prescribed in Clause 1, Article 206 of the Law on Enterprises. The legal status of businesses changes to “Suspended from business” when the enterprises register to start suspending their business. The end date of the legal status of “Suspended business” is the date of the end of the business suspension period announced by the enterprise or the date the enterprise registers to resume business before the notified time limit. The suspension of business must also have a certain period when registering.
Conditions for business suspension
- The Company needs to notify the Business Registration Authority of the business suspension 03 days in advance to receive a certification of the Company’s business suspension;
- During the time when the Company registers to suspend its business, the Company’s tax identification number must in operation (not closed by the authorities) to ensure the tax declaration obligations transparent before and after the business suspension registration. In fact, many established businesses do not do business at their registered headquarters; or do not operate any business in reality and therefore do not file a tax return. For violations like that, the Tax Department will close the tax code of these businesses. Therefore, if you want to complete the registration procedure for temporary suspension of business, the business will first have to carry out the procedure to restore the closed tax code.
Procedures for business suspension
Dossiers for application to suspend the business
- Firstly, a notice of business suspension
- Secondly, minutes of the meeting, the decision to suspend business according to authority.
- Thirdly, authorization to carry out business registration procedures
- Fourthly, a copy of the applicant’s personal identification document
Steps to carry out procedures for business suspension
- Step 1: prepare the dossiers as mentioned above.
- Step 2: The enterprise submits the application to the Business Registration Office – Department of Planning and Investment where the enterprise located. The Business Registration Office then hands over the receipt of the application to the enterprise after receiving the notice of business suspension.
- Step 3: In 02 working days; The Department of Planning and Investment sends information to the tax authorities to compare if the enterprise has an amount of tax owed or not. Within 03 working days from the date of receipt of valid dossiers; The Business Registration Office issues a certificate of the enterprise having registered to suspend its business.
The term of business suspension
The duration of business suspension must not exceed 1 year.
After the notice period expires, if the enterprise continues to suspend its business, then it must further notify the Business Registration Office. Besides, the total period of consecutive business suspension must not exceed 2 years.
If after 2 years of suspension but the enterprise still does not want to resume operating again but does not want to dissolve; the company can return to business for a short time and then apply for a temporary suspension of business.
Thus, the maximum period of business suspension must not exceed 2 years in consecutive.
Suspend business for more than 2 years
According to the provisions of the law, an enterprise can suspend business many times. However, the total consecutive period must not exceed 02 years as mentioned above.
That means an enterprise can announce the suspension of business many times in a row; as long as the total time equal to or less than 02 years.
From this regulation, we can understand, that if the enterprise does not suspend business continuously, then the total business suspension period can last more than 2 years, even 5 years, 10 years.
For example, Enterprise A suspended business from September 2016 to the end of June 2017. Enterprise A then continued to extend the time limit from July 2017 to the end of July 2018. After that, the business returned to normal operation and in September 2018, enterprise A continued to send a notice of business suspension from September 2018 to the end of May 2019.
Thus, enterprise A has a total business suspension time exceeding 02 years; (02 years and 8 months) but there is no continuity because there is a break of 02 months.
The result of the business suspension notification procedure is a Certificate of the enterprise’s registration of business suspension-one of the grounds for determining the suspension of the enterprise as well as obligations arising from the suspension of business.
Therefore, when an enterprise has a need to suspend further business when the time exceeds 02 years, the enterprise needs to notify the business registration office as soon as possible (at least 03 days); to be reviewed and the suspension of business is legal.
Business suspension service of LSX Legal Firm
Business suspension-a necessary solution for businesses when they cannot continue doing business for a specified period of time. Suspending business quickly will help businesses avoid unnecessary costs. Meanwhile, the business suspension process contains complicated procedures so if businesses do it themselves, they will face many risks. Using the business suspension service of LSX will make you feel secure in each stage of implementation.
To make your case more convenient, LSX will perform:
- Legal advice related to new regulations in business suspension;
- 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.
Related articles
Procedures for business suspension of joint stock company in Vietnam
Decision form to suspend business for joint-stock company in Vietnam
Procedures for business suspension of a limited company in Vietnam
Related questions
Step 1: Submit a dossier including the business registration office’s decision to suspend business.
Step 2: Perform the outstanding tax obligations, and fully submit the tax returns of the month or quarter before the business suspension. Also, businesses must submit declarations such as the Finalization of corporate income tax; personal income, financial statements, and notes to financial statements of the year in which the business operates.
If the enterprise is in the period of registration for business suspension and considers it eligible to resume operation; Businesses can register to resume operations before the suspension period ends. At the same time, they must perform the obligation to notify the business registration office at least 15 days before the resumption of operation.
Method 1: Submit the application directly to the Business Registration Office of the Department of Planning and Investment of the province or city where the enterprise is located.
Method 2: submitting dossiers online at dangkykinhdoanh.gov.vn
Contact LSX
Finally, hope this article is useful for you to answer the question about “Suspend business for more than 2 years under Vietnamese legislation”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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