Enterprises in the course of business operations may face some problems such as financial difficulties, etc., causing them to need to temporarily suspend their business operations. So what does the law say about business suspension? In the framework of the article below, let’s find out with Lawyer X how long the business suspension period is!
Legal grounds
– Enterprise Law 2020;
– Decree 01/2021/ND-CP.
Consulting content
Cases of businesses temporarily suspending business
After the establishment of the enterprise and the operation process, there are difficulties; The business may suspend business.
An enterprise will temporarily suspend its business in the following two cases:
– The enterprise chooses to suspend business.
For example, A business having financial problems needs to temporarily stop operating to stabilize the company’s finances.
– The business registration authority, the competent state agency shall request the enterprise to suspend its conditional business lines when detecting that the enterprise does not fully satisfy the conditions as prescribed by law.
For example: If a financial company has not yet secured a legal capital of 500 million VND as prescribed by law, the competent authority will request the company to suspend its business for the statutory period to focus on ensuring this level of capital. legal capital as required by law.
Term of business suspension of the enterprise
An enterprise may suspend its business for a maximum of a year. And must send a notice to the Business Registration Office where the enterprise, branch, representative office, or business location has registered; at least 03 days before suspending business before the announced time limit.
However, businesses can suspend business many times in a row and there is no limit to the number of times. Specifically: If it is not possible to resume business activities; Enterprises can continue to notify business suspension (for the second time) and send it to the Business Registration Office (under the Department of Planning and Investment), the second time suspending business is maximum of 01 years.
In case the enterprise suspends its business; The notice must be enclosed with the decision and a valid copy of the meeting minutes of the Members’ Council, for limited liability companies with two or more members; of the company owner for a one-member limited liability company; besides, the Board of Directors for joint-stock companies; of general partners for a partnership company.
If the business suspension period expires, but the enterprise has not yet resumed operation and does not want to dissolve the business, the company can use the solution: operate the business for a short time, then register to suspend the business. At that time, the procedure and time of business suspension (new) will be implemented as above instructions.
Responsibilities of the enterprise during the period of business suspension
By the law, during the temporary suspension of business; the enterprise must fully pay the outstanding tax amount; continue to pay debts; complete the performance of signed contracts with customers and employees.
Unless otherwise agreed by enterprises, creditors, customers, and employees.
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Frequently asked questions
Enterprises in the period of temporary suspension of business will not be allowed to trade, buy and sell goods or provide services. Therefore, businesses will not be invoiced under any circumstances.
Documents to be prepared:
Notice of business suspension according to the form.
Minutes of meeting, decision to suspend business according to authority.
Authorization to carry out business registration procedures.
Copy of the applicant’s identification document.
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