Under which circumstances is the Farmers Support Fund dissolved? What is the procedure for dissolving the Farmers Support Fund?
Under what circumstances will the Farmers Support Fund be dissolved?
Pursuant to the provisions of Article 40 Decree 37/2023/ND-CP, the regulations are as follows:
Cases of dissolution of the Farmers Support Fund
The Farmers Support Fund will be dissolved under one of the following cases:
1. The Farmers Support Fund is assessed as not completing its tasks and has an average annual loan balance ratio (excluding entrusted loans) to the charter capital of the Farmers Support Fund lower than 20% for five consecutive years from the effective date of this Decree.
2. The ratio of bad debt to total loan balance is higher than 50% and/or the cumulative deficit is greater than or equal to 75% of the actual charter capital of the Farmers Support Fund for five consecutive years from the effective date of this Decree.
3. Cases where the Central/Provincial/District Farmers Support Fund is deemed unnecessary to continue operations as assessed by the Prime Minister of the Government of Vietnam/Provincial People’s Committee/District People’s Committee.
According to the above regulations, the Farmers Support Fund will be dissolved when it falls under one of the following cases:
- The Farmers Support Fund is assessed as not completing its tasks and has an average annual loan balance ratio to the charter capital of the Farmers Support Fund lower than 20% for five consecutive years from August 8, 2023.
- The ratio of bad debt to total loan balance is higher than 50% and/or the cumulative deficit is greater than or equal to 75% of the actual charter capital of the Farmers Support Fund for five consecutive years from August 8, 2023.
Under what circumstances will the Farmers Support Fund be dissolved? What is the dissolution process of the Farmers Support Fund?
What is the dissolution process of the Farmers Support Fund?
Pursuant to the provisions of Article 42 Decree 37/2023/ND-CP, the regulations are as follows:
Dissolution process of the Farmers Support Fund
1. The dissolution council formulates a dissolution plan and reports it to the Prime Minister of the Government of Vietnam/Provincial People’s Committee/District People’s Committee for approval. The dissolution plan includes the following contents:
a) Assessment by an independent auditing organization on the financial status and determination of the remaining charter capital of the Farmers Support Fund, except in cases where the Farmers Support Fund has an audited financial statement by an independent auditor within six months before the dissolution decision;
b) Plan for asset liquidation, handling of capital sources, loans, ongoing investments, and repayment of the Farmers Support Fund’s debts;
c) Plan for transferring entrusted capital from entrusting organizations;
d) Plan to handle obligations arising from labor contracts;
e) Terms for terminating all rights and interests of the Farmers Support Fund.
2. Based on the approval of the plan proposed by the dissolution council, the Prime Minister of the Government of Vietnam/Provincial People’s Committee/District People’s Committee issues a dissolution decision for the Central/Provincial/District Farmers Support Fund and announces the dissolution on the mass media.
3. Within ten working days from the effective date of the dissolution decision:
a) The Farmers Support Fund is responsible for implementing the regulations in Article 43 of this Decree;
b) The dissolution council is responsible for implementing the regulations in Article 44 of this Decree.
4. The dissolution council automatically ceases operations when the Farmers Support Fund has completed the dissolution procedures in accordance with this Decree and relevant legal regulations.
5. The time frame for dissolving the Farmers Support Fund is not more than 2 years from the effective date of the dissolution decision. In necessary cases based on actual demands, the Prime Minister of the Government of Vietnam/Provincial People’s Committee/District People’s Committee may decide to extend the dissolution period for the Central/Provincial/District Farmers Support Fund, but not exceeding 1 year.
Thus, the dissolution process of the Farmers Support Fund is as follows:
- Step 1: The dissolution council formulates a dissolution plan and reports it to the Prime Minister of the Government of Vietnam/Provincial People’s Committee/District People’s Committee for approval.
- Step 2: Based on the approval of the plan proposed by the dissolution council, the Prime Minister of the Government of Vietnam/Provincial People’s Committee/District People’s Committee issues a dissolution decision for the Central/Provincial/District Farmers Support Fund and announces the dissolution on the mass media.
- Step 3: Within ten working days from the effective date of the dissolution decision, the Farmers Support Fund and the dissolution council must fulfill their responsibilities as prescribed.
- Step 4: The dissolution council automatically ceases operations when the Farmers Support Fund has completed the dissolution procedures in accordance with this Decree and relevant legal regulations.
What are the responsibilities of the Farmers Support Fund after the dissolution decision is made?
Pursuant to the provisions of Article 43 Decree 37/2023/ND-CP, the regulations are as follows:
Responsibilities of the Farmers Support Fund after the dissolution decision is made
1. Immediately cease all activities of capital mobilization, lending, and related activities when the dissolution decision takes effect.
2. Within 10 working days from the effective date of the dissolution decision, the Farmers Support Fund must:
a) Close accounting books; inventory assets; reconcile receivables and payables; prepare financial statements up to the effective date of the dissolution decision;
b) Create a list of the Farmers Support Fund's deposits at receiving organizations; list of debts payable, including mobilized capital; list of loan customers and receivables (separated into recoverable and non-recoverable debts); list of entrusted and received entrustments;
c) Send a written request for tax confirmation to the tax authorities regarding the fulfillment of tax obligations by the Farmers Support Fund (if any).
3. Within 30 working days from the effective date of the dissolution decision, the Farmers Support Fund must hand over to the dissolution council:
a) Financial reports, accounting books, and related documents regarding the dissolution of the Farmers Support Fund; list of loans, investments, entrusted, and received entrustments of the Farmers Support Fund;
b) All assets under the ownership, management, and lawful use rights of the Farmers Support Fund (including unrecovered assets).
Upon the dissolution decision, the Farmers Support Fund must assume the responsibilities as prescribed above.
Decree 37/2023/ND-CP takes effect from August 8, 2023.
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