Do household businesses suspending its business have to send a notification to the business registration authority in Vietnam?

Do household businesses suspending its business have to send a notification to the business registration authority in Vietnam?

Article 91 of Decree 01/2021/ND-CP stipulates business suspension and resumption of business ahead of notified schedule as follows:

1. If the suspension period is 30 days or longer, the household business must send a notification to the business registration authority of district where it was registered and its supervisory tax authority.

2. If the household business suspends business or resumes its business ahead of the notified schedule, the household business shall send a written notification to the business registration authority of district where it was registered at least 03 working days before the planned date of business suspension or resumption of business ahead of the notified schedule. Such notification must be enclosed with the copy of the minutes of the meeting of family household members on business suspension or resumption of business ahead of schedule if the household business is established by family household members. When receiving the notification, the district-level business registration authority shall give a confirmation slip to the household business. Within 03 working days from the receipt of the valid application, the district-level business registration authority shall issue a certificate of registration of business suspension or certificate of registration of resumption of business ahead of the notified schedule to the household business.

Thus, in case your business household suspends its business for more than 30 days, it is compulsory that you notify the business registration authority of the district where it has registered its business in accordance with the law in Vietnam.

How much is fine for household businesses when suspending its business without sending a written notification in Vietnam?

Article 63 of Decree 122/2021/ND-CP stipulates 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.

Besides, in Clause 2, Article 4 of Decree 122/2021/ND-CP, the fine levels are as follows:

2. The fines for administrative violations specified in this Decree are imposed upon organizations (except for the fines for violations specified in Point c Clause 2 Article 28; Points a and b Clause 2 Article 38; Article 62 and Article 63 of this Decree, which are imposed upon individuals). For the same violation, the fine incurred by an individual is 1/2 (half) that incurred by an organization.

According to this Article, in case your household business suspends its business without notifying the business registration authority, you may be fined from VND 2,500,000 to VND 5,000,000, and at the same time must notify the district-level business registration authorityin accordance with regulations in Vietnam.

Do household business owners have right to set up a sole proprietorship in Vietnam?

Article 80 of Decree 01/2021/ND-CP stipulates rights to establish household businesses and obligations to apply for household business registration as follows:

1. Any individual or family household member that is a Vietnamese citizen and has full legal capacity as prescribed in the Civil Code shall have the right to establish household businesses in accordance with this Chapter, except the following cases:

a) Minors; people with limited legal capacity; incapacitated people; people having difficulties in controlling their behaviors;

b) People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, or is prohibited by the court from holding certain positions or doing certain works;

c) Other cases prescribed by relevant laws.

2. Each individual or family household member mentioned in Clause 1 of this Article may register only one household business nationwide, and is entitled to contribute capital to and buy shares/stakes of other enterprises as an individual.

3. Individuals and family household members that apply for household business registration must not concurrently hold the position of sole proprietor, general partner of a partnership, unless otherwise agreed by the other general partners.

According to the above provisions in Vietnam, the owner of a household business is not entitled to establish a sole proprietorship as prescribed by law.

Best Regards!