Is there any procedure required when shutdown of household business in Vietnam?

Is there any procedure required when shutdown of household business in Vietnam?

Question: I am currently in Dong Nai, the epidemic is affecting my work. I want to shut down my business, do I need to follow any procedures?

Reply:

Pursuant to Article 92 of Decree 01/2021/ND-CP regulating 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.

Thus, if you want to shut down your business operation in Vietnam, you need to follow the procedures as cited above.

Note: You are responsible to 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.

Is there any procedure required when shutdown of household business in Vietnam? (Image from the Internet)

When converting from a household business to a sole proprietorship, do household business operations have to shut down in Vietnam?

Question: Question: When converting from a household business to a sole proprietorship, do household business operations have to shut down in Vietnam? What are the regulations? Thanks for advice.

Reply:

Pursuant to Article 27 of Decree 01/2021/ND-CP, there are regulations on registration of conversion from household business into enterprise as follows:

1. The application for registration of an enterprise which is converted from a household business shall be submitted to the Business Registration Office of province where the enterprise will be headquartered.

2. The application for registration of an enterprise which is converted from a household business includes the original certificate of household business registration, the copy of the tax registration certificate and the documents specified in Articles 21, 22, 23 and 24 hereof corresponding to each enterprise type but excludes the investment registration certificate specified in Point b Clause 4 Article 22, Point c Clause 4 Article 23 and Point c Clause 3 Article 24 hereof. If foreign investors/foreign-invested business entities contribute capital to or purchase of shares/stakes of the enterprise converted from a household business in case procedures for registration of capital contribution or purchase of shares/stakes must be followed in accordance with the Law on Investment, the application for enterprise registration must include the written approval given by the investment registration authority for capital contribution or purchase of shares/stakes by such foreign investors/foreign-invested business entities.

3. Within 02 working days from the date of issue of the enterprise registration certificate, the Business Registration Office shall send the copy of the enterprise registration certificate and original certificate of household business registration to the business registration authority of district where the household business is located for completing procedures for shutdown of the household business.

Thus, according to regulations in Vietnam, when converting from a household business to an enterprise (including sole proprietorship), the household business must shut down its operations. The shutdown is carried out in the above order.

What is “dissolved, bankrupt or cease to exist” status in Vietnam?

Question: Let me ask, according to the latest regulations, what is “dissolved, bankrupt or cease to exist” status in Vietnam? Thank you.

Reply:

Pursuant to the provisions in Clause 6, Article 41 of Decree 01/2021/ND-CP:

6. “dissolved, bankrupt or cease to exist” means the legal status of the enterprise that has completed dissolution procedures and has its status updated by the Business Registration Office according to Clause 8 Article 208, Clause 5 Article 209 of the Law on enterprises; that is subject to a decision to declare bankrupt issued by the Court in accordance with regulations of the Law on bankruptcy; or that ceases to exist due to full division, consolidation or merger according to Clause 5 Article 198, Clause 5 Article 200 or Clause 4 Article 201 of the Law on Enterprises. Starting date of the “dissolved, bankrupt or cease to exist” status is the date on which the Business Registration Office updates the enterprise's status on the National Enterprise Registration Database.

Best regards!