Can a Company in Tax Arrears Temporarily Suspend Business Operations?

Regarding a company with tax debt, is it allowed to temporarily suspend business?

I would like to ask the lawyer, in the case where our company has tax debt, are we allowed to temporarily suspend business operations? Thank you, lawyer.

Answer: According to the provisions of Clause 3, Article 206 of the Law on Enterprises 2020:

During the period of temporary suspension of business, the enterprise must pay off all outstanding taxes, social insurance, health insurance, and unemployment insurance debts; continue to settle other debts, complete contracts executed with customers and employees, unless the enterprise, creditors, customers, and employees have agreed otherwise.

According to this regulation, if a company temporarily suspends business, the company must still pay off the outstanding tax debts. However, this does not mean that a company with tax debt is not allowed to temporarily suspend business operations. The company only needs to notify at least 03 working days before the date of temporary business suspension and settle the tax debts during the suspension period.

How many founding shareholders are required for a joint-stock company?

I am planning to establish a company specializing in software production with a few friends. Could the lawyer clarify how many founding shareholders are required if I want to establish a joint-stock company?

Answer: According to the provisions of Clause 1, Article 120 of the Law on Enterprises 2020:

A newly established joint-stock company must have at least 03 founding shareholders. A joint-stock company converted from a state-owned enterprise, or from a limited liability company, or split, separated, merged, consolidated from another joint-stock company is not required to have founding shareholders; in this case, the company's charter in the enterprise registration file must be signed by the legal representative or the ordinary shareholders of that company.

According to this regulation, if you want to establish a joint-stock company in the near future, your company must have at least 03 founding shareholders upon establishment.

In what case is a company considered a parent company?

In what case is a company considered a parent company of another company?

Answer: According to Clause 1, Article 195 of the Law on Enterprises 2020, a company is considered a parent company of another company if it falls into one of the following cases:

- Owning more than 50% of the charter capital or total ordinary shares of that company;

- Having the direct or indirect right to appoint the majority or all of the members of the Board of Directors, the Director, or the General Director of that company;

- Having the right to decide on the amendment and supplement to the charter of that company.

Thus, if it falls into one of the above cases, a company is considered the parent company of another company.

Sincerely!