Can employees in Vietnam receive salary when their company declares bankruptcy?
Can employees in Vietnam receive salary when their company declares bankruptcy? Can the employee in Vietnam send a written request for initiation of bankruptcy process? Is the company declaring bankruptcy entitled to tax obligation in Vietnam?
Can employees in Vietnam receive salary when their company declares bankruptcy?
The bankrupt joint-stock company has assets of 36 billion VND, including debts of 900 billion VND, insurance and job loss compensation of 9 billion VND, and employee salary debts of 3 billion VND. In this case, I am uncertain whether the employees will receive their full salary or not.
Answer:
Pursuant to Clause 1 Article 54 of the Law on Bankruptcy in 2014 stipulating sequence of redistribution of assets when a company declares bankruptcy as follows:
1. When the judge gives the Decision on the declaration of bankruptcy, the assets of the insolvent entity shall be redistributed in the following sequence:
a) Cost of bankruptcy
b) The unpaid salaries, severance pay, social insurance and medical insurance to employees, other benefits according to the labor contracts and collective bargaining agreements;
c) Debts incurred after the initiation of bankruptcy which are used for resuming the business operation.
d) Financial obligations to the Government; unsecured debts payable to the creditors on the list of creditors; secured debts which are not paid because the value of collateral is not enough to cover such debts.
As regulations above, when a company declares bankruptcy, the assets of the insolvent entity shall be redistributed in the above sequence. The unpaid salaries shall be the second priority payment when the company goes bankrupt.
Can employees in Vietnam receive salary when their company declares bankruptcy? - Image from Internet
Can the employee in Vietnam send a written request for initiation of bankruptcy process?
Can the employee in Vietnam send a written request for initiation of bankruptcy process?
Answer:
Pursuant to Clause 2 Article 5 of the Law on Bankruptcy in 2014 stipulating as follows:
Any employee, internal Trade Union (or the superior Trade Union if the internal Trade Union is not established) is entitled to send a written request for initiation of bankruptcy process after 03 months from the day on which the entity have to pay salaries and other debts to the employees.
Therefore, to ensure the rights and interests of employees, the Bankruptcy Law allows employees to submit a request to initiate bankruptcy process in cases where the enterprise or cooperative is unable to pay its debts.
Note: When requesting the People's Court to initiate bankruptcy process, the employee or the internal Trade Union representative specified in Clause 2 must submit a request to initiate bankruptcy process.
Is the company declaring bankruptcy entitled to tax obligation in Vietnam?
Is the company declaring bankruptcy entitled to tax obligation in Vietnam? Thank you!
Answer:
Pursuant to Clause 1 Article 54 of the Law on Bankruptcy in 2014 stipulating sequence of redistribution of assets when a company declares bankruptcy as follows:
1. When the judge gives the Decision on the declaration of bankruptcy, the assets of the insolvent entity shall be redistributed in the following sequence:
- Cost of bankruptcy
- The unpaid salaries, severance pay, social insurance and medical insurance to employees, other benefits according to the labor contracts and collective bargaining agreements;
- Debts incurred after the initiation of bankruptcy which are used for resuming the business operation.
- Financial obligations to the Government; unsecured debts payable to the creditors on the list of creditors; secured debts which are not paid because the value of collateral is not enough to cover such debts.
As regulations above, the company declaring bankruptcy has to pay tax obligations to the Government after redistribute other assets in the above sequence.
Best regards!
