According to statistics, roughly 400 new enterprises are founded every day in Vietnam. However, there is the equivalent of that birth, after a short period of business operations, many enterprises do not keep ongoing profits, and are forced to select the enterprise’s dissolution. In fact, dissolution is a rather complex procedure that necessitates a significant amount of time and takes effort by the enterprise. With many years of experience in advising enterprises, Hong Bang Law Firm would like to provide advice on enterprise dissolution procedures as follows:
Legal basis
- Vietnam’s law on enterprises 2020;
- Decree No. 01/2021/ND-CP on enterprise registration;
- Circular No. 01/2021/TT-BKHDT guidance on enterprise registration.
General regulations on dissolution of enterprises
Enterprise dissolution is understood as the termination of legal persons and related rights and obligations of the enterprise. In the provisions, an enterprise is considered to be dissolved only when “has completed the dissolution procedure as prescribed and is updated by the Business Registration Office in accordance with Clause 8, Article 208, Clause 5 Article 209 of the Law on enterprise”.
Cases of and conditions for dissolution of enterprises
- An enterprise shall be dissolved in the following cases:
- The operating period specified in the company’s charter expires without an extension decision;
- The enterprise is dissolved under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the GMS (for joint stock companies);
- The enterprise fails to maintain the adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business;
- The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration.
An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration. Relevant executives and the enterprise mentioned in Point d Clause 1 of this Article are jointly responsible for the enterprise’s debts.
Procedures for dissolution of enterprises
Dossier:
- The notification of the enterprise’s dissolution;
- Resolutions, decisions and minutes of meetings of the Members’ Council for limited liability companies with two or more members, partnerships, and general meeting of shareholders for joint stock companies; resolutions and decisions of the company owner on a one-member limited liability company on the dissolution of the enterprise;
- The report on liquidation of the enterprise’s assets; list of creditors and paid debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any).
Execution sequence
Step 1: Adopt the decision to dissolve the enterprise and organize the liquidation of assets;
Step 2: Announce the dissolution of the enterprise;
Resolutions, dissolution decisions and meeting minutes must be sent to business registration offices, tax authorities and employees within 07 days from the date of adoption.
Step 3: Liquidate assets, pay the debts of the enterprise;
Step 4: Send the enterprise dissolution dossier to the Business Registration Office
The enterprise submits the enterprise dissolution dossier to the business registration authority within 05 working days from the date of payment of all debts.
Services of Hong Bang Law Firm
- Advise on the appropriate type of business for clients;
- Draft, prepare and check the validity of the dossier;
- Work with state authorities;
- On behalf of the customer to receive the results;
- Hand over the results to the customer.
If you need more detailed advice and answers as well as how to access this service, please contact directly our Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the toll free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com
Wishing you and your family good health, peace and success!
Best regards!
