Suspending Business Operations Without Notification: Are Enterprises Subject to Penalties?
Clause 1, Article 200 of the 2014 Enterprise Law stipulates:
Enterprises have the right to suspend their business operations but must notify in writing the business registration agency of the timing and duration of the suspension or resumption of business operations at least 15 days before the suspension or resumption of business operations. This regulation applies in cases where enterprises resume business ahead of the notified schedule.
Thus, suspending business operations is a right of the enterprise; however, the enterprise must notify in writing the business registration agency of the timing and duration of the suspension at least 15 days prior to the business suspension or resumption.
Additionally, according to Clause 1, Article 57 of Decree 78/2015/ND-CP:
When enterprises carry out procedures for the suspension of business operations, they must concurrently send a notice of suspension of activities of branches, representative offices, and business locations to the Business Registration Office where the branches, representative offices, and business locations are registered.
If an enterprise suspends its business operations but does not notify or does not notify within the required time frame to the business registration agency, it may be subject to penalties according to Article 32 of Decree 50/2016/ND-CP, specifically:
- A fine ranging from VND 1,000,000 to VND 2,000,000 for the following acts:
...
d) Failure to notify or untimely notification to the business registration agency about the timing and duration of business suspension or resumption;
- A fine ranging from VND 2,000,000 to VND 3,000,000 for the following acts:
a) Registering for business suspension but failing to notify the suspension of activities of branches, representative offices, business locations;
...
- Measures for remedying consequences:
a) Compelling notification to the business registration agency and tax authorities as prescribed for the violations at Point a, Clause 1 of this Article;
b) Compelling notification to the business registration agency as prescribed for the violations at Points b, c, d, and dd, Clause 1 and Clause 2 of this Article.
Therefore, if an enterprise suspends its operations without notifying the suspension period, it will be fined from VND 1-2 million; failing to notify the suspension of activities of branches, representative offices, business locations will result in a fine from VND 2-3 million.
Sincerely!
