Can a Failing Company be Dissolved?
Article 207 of the Law on Enterprises 2020 stipulates the cases and conditions for the dissolution of enterprises as follows:
- An enterprise shall be dissolved in the following cases:
a) The operation period recorded in the company's charter expires without a decision for an extension;
b) According to the resolution or decision of the business owner for a private enterprise, of the Members' Council for a partnership, of the Members' Council or the company owner for a limited liability company, or of the General Meeting of Shareholders for a joint-stock company;
c) The company no longer has the minimum number of members required by this Law for a continuous period of 06 months without carrying out procedures to convert the enterprise type;
d) Revocation of the Certificate of Business Registration, except in cases where the Law on Tax Administration provides otherwise.
- An enterprise may only be dissolved if it ensures the payment of all debts and other property obligations and is not in the process of resolving disputes at the Court or Arbitration. The relevant managers and the enterprise specified at point d, clause 1 of this Article shall be jointly responsible for the enterprise's debts.
*** In any of the above 4 cases, the company will be dissolved. In the event that the company operates at a loss, it will not automatically be dissolved.***
Respectfully!
