The business suspension occurs when the business situation of the enterprise encounters difficulties in financial problems, capital, market demand, or the current business operation of the enterprise needs restructuring for a certain time. Instead of dissolution, the suspension of operations will bring many benefits such as preserving the seniority of the company, retaining the brands, patents, etc. In this article, LSX legal firm will give you information about: “Procedures for business suspension in Vietnam”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
- Circular 01/2021/TT-BKHDT
Business suspension
Suspension of business means that an enterprise will suspend its business operations for a certain period of time due to various reasons such as having difficulties in business operations and not able to resume business operations or needing time to reschedule.
This legal act is different from dissolution because if dissolved, the business will terminate its business activities as well as legal status. Suspending a business simply means “taking a break” for a while and then continuing to operate. At the end of the maximum “rest” period permitted by law, if the enterprise does not continue to operate, it must carry out procedures for dissolution or transfer.
Enterprises have the right to suspend their business. However, enterprises can only exercise this right when they meet certain conditions as prescribed by law. This includes notification procedures for public authorities and related financial obligations. The right to suspend business regulated in Article 206 of the Enterprise Law 2020:
“Article 206. Business suspension and termination
3. During the suspension period, the enterprise shall fully pay the unpaid taxes, social insurance, health insurance, and unemployment insurance premiums and fulfill contracts with its clients and employees, unless otherwise agreed by the enterprise, creditors, clients, and employees”
Procedures for business suspension
Procedures for business suspension will be carried out according to the following steps:
Step 1: Prepare business suspension dossiers
Individuals and organizations prepare dossiers and documents in accordance with regulations (for specific information, please see the section below). The business suspension dossier has an important part as the reason for the business suspension, usually, businesses take the reason as financial difficulties and cannot continue to operate.
Step 2: Submit a business suspension application to the Department of Planning and Investment
After preparing the business suspension dossiers, individuals and organizations submit them to the Department of Planning and Investment of the province/city where they have registered the head office of the business.
Step 3: Receive and evaluate the company’s business suspension application
The Business Registration Office accepts documents, consults with relevant agencies (if necessary) to processes and completes the results of the application, then updates the status of the application on the online database.
Step 4: Submit notice of business suspension
In case the application is valid, the enterprise will submit the paper notification (hard copy) to the Business Registration Office to receive the result. In case the dossier needs amendment or supplement, the enterprise will amend and supplement the dossier at the request of the registration office.
Note: The procedure to suspend the company’s business operation only needs to be filed at the Department of Planning and Investment and NOT at the tax agency that is managing the enterprise’s tax.
Step 5: Officially suspend the company’s business operations
After submitting the notice of business suspension, the enterprise will suspend from the time stated on the notice, and all business activities after the date of suspension must stop. Besides, the enterprise can resume operations after the suspension period expires or requests to resume operation before the suspension period expires.
Dossiers for business suspension
To carry out the business suspension procedure. Your business must fully prepare the following documents:
firstly, Notice of business suspension. The notice must bear the signature of the legal representative of the enterprise and the seal of the enterprise.
Also, the notice must contain the following information:
- Company name
- Company ID
- Tax code
- Registered business lines
- Term and reason for suspension
Secondly, the power of attorney for the person to submit the notice on behalf of the enterprise in case the legal representative of the enterprise does not submit it directly.
Thirdly, the Decision to suspend business:
- For a sole proprietorship or a single-member limited liability company, the owner makes the decision.
- In the case of a limited liability company with 2 or more members, the Board of Members makes the decision. Also, a copy of the meeting minutes of the Board of Members recognized by the law.
- In a Joint Stock Company, the decision-making will belong to the Board of Directors. A valid copy of the meeting minutes of the Board of Directors must be submitted.
- For a partnership, the general partners in the company have the right to make the decision. In addition to the decision, the company must attach a copy of the minutes of the meeting.
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
Conditions for business suspension of business in Vietnam
Latest business suspension notice form in Vietnam
Service of suspending business in Gia Lam district, Vietnam
Related questions
The cost of suspending the business will always be cheaper than the cost of dissolving the company. The suspension does not have to completely stop the operation, so you don’t have to worry about the tax and related obligations to the state in the process of suspension. Normally, the cost of dissolving a company will be 5-10 times more expensive than suspending it.
Firstly, notice of business suspension;
Secondly, power of attorney for individuals to carry out the procedures (if enterprises cannot do it themselves);
Thirdly, copy of the company’s business registration certificate (if any).
Firstly, notice of business suspension;
Secondly, decision of the Board of Members on business suspension;
Thirdly, a copy of the meeting minutes of the Board of Members on business suspension;
Fourthly, power of attorney for individuals to carry out the procedures (if enterprises cannot do it themselves);
Lastly, copy of the company’s business registration certificate (if any).
Contact LSX
Finally, hope this article is useful for you to answer the question about “Procedures for business suspension in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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