Cooperatives are collective economic organizations; As a co-owner and has a profound social character, the dissolution procedures of a cooperative are quite different from those of an enterprise. Therefore, to properly implement the dissolution of the cooperative in accordance with the law. Let’s learn about: “Procedures for dissolution of cooperatives in Vietnam” with LSX Lawfirm.
Legal grounds
Cooperative Law 2012
Reasons for dissolution of cooperatives in Vietnam
A cooperative can be dissolved for two reasons:
Firstly, Voluntary dissolution of a cooperative is agreed upon by the general meeting of cooperative members with the termination of business activities of the cooperative.
Secondly, Compulsory dissolution of cooperatives shall be decided by district-level People’s Committees on compulsory dissolution of cooperatives if:
- So, the cooperative has been inactive for 12 consecutive months;
- The cooperative fails to ensure the minimum number of members as prescribed by this Law for 12 consecutive months;
- Then The cooperative fails to hold the annual general meeting of members for 18 consecutive months without reason;
- The certificate of establishment of the cooperative has been revoked;
- By decision of the Court.
Procedures for dissolution of cooperatives in Vietnam
Step 1: Make a decision on dissolution and establish a dissolution council.
At this step; depending on the reason for the voluntary or compulsory dissolution; The decision-making body and the composition of the dissolution council will be different. Specifically:
For voluntary dissolution: The decision to dissolve the cooperative must be approved by the general meeting of members with at least 75% of the total votes in favor. The general meeting of members shall establish a voluntary dissolution council to represent the cooperative. Including: then representatives of the board of directors; supervisory board or controller; Executive Board; member’s representative; cooperative members.
At the same time; district-level People’s Committee dissolution council. Including:
- The chairman of the dissolution council is the representative of the People’s Committee
- The permanent member is the representative of the state agency that issues the registration certificate
- Then other members are representatives of specialized agencies of the same level
- Representative organization; provincial cooperative union; centrally run cities (if the cooperative is a member of the union)
- Then the People’s Committee of the commune, ward or township where the cooperative or union of cooperatives is headquartered; administrative Council; supervisory board, members.
Step 2: The Dissolution Council shall carry out the procedures for dissolution of the cooperative in accordance with the law.
Within 60 days from the date of issuance of the dissolution decision; The Dissolution Council is responsible for performing the following tasks:
- Notice of dissolution to the state agency that has issued the registration certificate to the cooperative (only for voluntary dissolution);
- Then Publish in the local newspaper where the cooperative is located; Union of Cooperatives operates for 03 consecutive issues on voluntary or compulsory dissolution;
- Notice that so organizations; individuals having economic relations with the cooperative; unions of cooperatives on the time limit for debt payment, liquidation of contracts; carry out the handling of assets and capital of cooperatives and unions of cooperatives.
The property and capital of the cooperative shall be handled in the following order: Recovery of the cooperative’s assets; liquidation of assets, except for undivided assets; pay debts and fulfill financial obligations of the cooperative.
So, cooperatives only use undivided assets and not non-refundable support from the state to repay debts; when other assets are not enough to pay the debt. Non-shared assets within the scope of the cooperative’s liability include: Gifts; then give under the agreement as undivided property; so the annual deduction from the investment and development fund shall be decided by the general meeting of members to be included in the undivided assets; then capital and other assets specified by the charter as undivided assets.
So, after completing the above steps; then, the dissolution council must submit a set of documents on the dissolution; seal and original certificate of cooperative registration; cooperative union to the agency that issued the registration certificate
Step 3: The state agency that has issued the certificate of cooperative registration must delete the name of the cooperative from the registration book. From this point on, the cooperative ceased to exist.
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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