Procedures for business suspension for businesses facing difficulties due to Covid-19 in Vietnam
Due to the impact of the Covid-19 epidemic, the economy had many fluctuations, making it more difficult for businesses to do business. In that context, instead of choosing to dissolve or continue to “hold out”, many businesses choose to suspend business. So what is the current business suspension procedure? Is it easy to do? Let’s find out with Lawyer X through the following article:
Legal grounds
Enterprise Law 2020
Decree 01/2021/ND-CP
Consulting content
Should businesses temporarily suspend business to “avoid” Covid-19?
The Covid-19 epidemic broke out, all industries were severely affected. Especially tourism, transportation, agriculture; import and export… are the most seriously affected industries.
Faced with this situation, it is inevitable for businesses to encounter “difficulty”. Many businesses choose to suspend business to “avoid” the pandemic.
Because business suspension only terminates the operation of the business for a certain period; At the end of the suspension period, the business will return to normal operations.
If you choose to dissolve, the enterprise is considered to be “dead”; and can no longer proceed after that.
Procedures for business suspension for businesses facing difficulties due to Covid-19
Suspending business is the right of the enterprise. However, according to Clause 1, Article 200 of the Law on Enterprises, the enterprise must notify in writing of the time; and the time limit for suspending or resumption of business for the Business Registration Office at least 15 days before the date of suspension or resumption of business.
Enterprises suspending business take the following steps:
Step 1: Prepare documents including:
– Notice of business suspension;
– Decision and valid copy of meeting minutes of the Members’ Council, for limited liability companies with two or more members, of the company owner, for single-member limited liability companies, of the Board of Directors. the board of directors, for a joint-stock company, of the general partners, for a partnership;
– For enterprises that are granted investment licenses, investment certificates, or papers of equivalent legal validity, in addition to the above-mentioned papers, the enterprises must submit:
– A valid copy of the Investment Certificate;
– A valid copy of the Tax Registration Certificate;
– Request for supplement and update of business registration information.
Step 2: Apply to the Business Registration Office where the enterprise’s head office is located.
Step 3: Issuing a Certificate of Business Suspending Registration
According to Decree 01/2021/ND-CP, within 03 working days; from the date of receipt of a valid dossier, the Business Registration Office shall issue a certificate of the enterprise’s registration of business suspension.
Enterprises are entitled to suspend their business but not for more than 01 year. After the expiry of the notified business suspension period; if the enterprise continues to suspend its business, it must further notify the Business Registration Office.
However, the total duration of business suspension in a row must not exceed 2 years.
In case the Covid-19 epidemic ends early; If an enterprise wishes to resume business before the notified time limit, it must send a notice to the Business Registration Office where the enterprise has registered at least 15 days before the resumption of business before the notified time limit.
Attached to the notice, the enterprise must send the decision; and meeting minutes (on an agreement to continue business ahead of time) of the Members’ Council, for limited liability companies with two or more members; of the company owner for a single-member limited liability company; of the General Meeting of Shareholders, in the case of a joint-stock company, of the general partners, in the case of a partnership.
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Related question
According to current regulations, enterprises must notify the business registration agency within at least 03 working days. From the date of official suspension of business. Therefore, the business suspension period must be at least 03 working days from the date of submission of the application.
The Law on Enterprises does not stipulate this issue, but the guiding Decree stipulates that the total duration of each business suspension is 01-year maximum. And there is no limit to the number of consecutive pauses. Previously, the Enterprise Law 2014 stipulates that the suspension shall not exceed 02 consecutive years.
The business registration authority is responsible for notifying the tax authority of the taxpayer’s information on the business suspension. No later than 02 working days from the date of receipt of the taxpayer’s document. Under Article 14 of Circular No. 151/2014/TT-BTC.
Thus, the enterprise only has to file a notice of business suspension with the Business Registration Office. Sending notices to tax authorities is the responsibility of the Business Registration Office (not the business).
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