Do household businesses in Vietnam that cease operations need to go through the termination procedures?

Do household businesses in Vietnam that cease operations need to go through the termination procedures?

Pursuant to Article 92 of the Decree 01/2021/NĐ-CP stipulating shutdown of household business as follows:

1. When a household business shuts down, it must send a notification of shutdown of operation to the district-level business registration authority where it was registered. The notification must be accompanied by the following documents:

a) The notification of invalidation of TIN by the tax authority;

b) The copy of the minutes of meeting of family household members on shutdown of the household business if the household business is established by family household members;

c) The original certificate of household business registration.

2. The household business shall fully pay debts, including tax debts and financial liabilities which have been not yet fulfilled before submitting the application for shutdown of the household business, unless otherwise agreed upon by the household business and its creditors. The district-level business registration authority shall consider the validity of received documents and give a notification of shutdown to the household business.

Therefore, when your household business ceases operations, you must go through the procedures to notify the business registration authority of the termination of your business activities. If you do not terminate your business, you will be subject to administrative penalties.

Do household businesses in Vietnam that cease operations need to go through the termination procedures? - Source: Internet

What are the fines imposed on a household business in Vietnam that stops operating without carrying out termination procedures?

Pursuant to Article 63 of the Decree 122/2021/NĐ-CP stipulating violations against regulations on information provision and reporting by household businesses as follows;

1. A fine ranging from VND 5,000,000 to VND 10,000,000 shall be imposed for any of the following violations:

a) Failure to submit a business report at the request of the district-level business registration authority;

b) Changing the household business’s owner without submitting an application for changes to household business to the district-level business registration authority where the household business is registered;

c) Suspending or resuming business ahead of schedule without sending a written notification to the district-level business registration authority where the household business is registered;

d) Changing business location without notifying the district-level business registration authority;

dd) Shutting down a household business without sending a notification or without returning the original certificate of household business registration to the district-level business registration authority;

e) Changing a business line without sending a notification the business registration authority of the district where the household business’s head office is located;

g) Carrying out business operations at multiple locations without notifying the business registration authority of the district where the household business is headquartered, tax authority or market surveillance authority.

In the case of a tax offence, fines therefor shall be imposed according to regulations on penalties for administrative tax offences.

2. Remedial measures:

The violator is compelled to:

a) submit a business report at the request of the district-level business registration authority as requested if the violation specified in Point a Clause 1 of this Article is committed;

b) notify the district-level business registration authority to the enterprise registration if any of the violations specified in Points b, c, d, dd, e and g Clause 1 of this Article is committed.

Pursuant to Clause 2 Article 4 of the Decree 122/2021/NĐ-CP stipulating as follows:

2. The fines prescribed in this Decree are the fines applicable to organizations (except for the fines prescribed in point c, clause 2, Article 28; points a and b, clause 2, Article 38; Article 62 and Article 63 of this Decree are the fines applicable to individuals). For the same administrative violation, the fine for an individual is equal to 1/2 (one-half) of the fine for an organization.

Therefore, ceasing operations as a household business without notifying the business registration authority will be fined from VND 5,000,000 to VND 10,000,000. In addition, it is required to notify the business registration authority of the termination of the household business's operations.

Best regards!