The enterprise dissolution after a period of operation suspension in Vietnam
My enterprise has completed the procedures for operation suspension since August 2019. Now, I want to dissolve my enterprise, is it possible? And what procedures do I need to do and what documents do I need to prepare? Thank you.
Dissolution conditions:
According to Article 201 of the Enterprise Law 2014, your company is be dissolved in the following cases and must meet the following dissolution conditions:
- A enterprise shall be dissolved in the following cases:
+ The operation period written in the company’s charter expires without a decision on extension;
+ The dissolution is decided by the owner of the sole proprietorship, by all general partners of the partnership, by the Board of members or owner of the limited liability company, or insurance the General Meeting of Shareholders of the joint-stock company;
+ The company fails to maintain the minimum number of members prescribed by this Law for 06 consecutive months without following procedures for business conversion;
+ The Certificate of Business registration is revoked.
- The enterprise shall only be dissolved if all debts and liabilities can be settled and the enterprise is involved in any dispute at a court or arbitral tribunal. Relevant managers and enterprises mentioned in Point d Clause 1 of this Article are jointly responsible for the enterprise’s debts.
Thus, if your company wants to dissolve, the dissolution will be decided by the owner of the sole proprietorship, by all general partners of the partnership, by the Board of members or owner of the limited liability company, or insurance the General Meeting of Shareholders of the joint-stock company and must meet the conditions specified in Clause 2 of this Article.
Dissolution petitions:
According to Clause 1, Article 204 of the Enterprise Law 2014, the petition for dissolution include the following documents:
- A notification of the enterprise dissolution;
- A report on liquidation of the enterprise’s assets; a list of creditors and paid debts, including tax debts, outstanding social insurance contributions, and debts owed to employees after deciding the dissolution (if any);
- The seal and seal certificate (if any);
- The Certificate of Business registration.
Procedures for dissolution (in the case of Point b, Clause 1, Article 201 of the Enterprise Law 2014):
According to the provisions of Article 202 of the Enterprise Law 2014, the procedures for enterprise dissolution are prescribed as follows:
The dissolution in the cases mentioned in Points a, b, and c Clause 1 Article 201 of this Law shall be carried out as follows:
- Ratify the decision on dissolution. The decision on dissolution must contain:
+ The enterprise’s name and headquarter address;
+ Reasons for dissolution;
+ Procedures for finalizing contracts and settling debts of the enterprise; the deadline for settling debts and finalizing contracts must not exceed 06 months from the day on which the decision on dissolution is ratified;
+ Plans for settlement of obligations derived from employment contracts;
+ Full name and signature of the enterprise's legal representative.
- Sole proprietorship’s owner, the Board of members, owner, or the Board of Directors shall directly organize the enterprise’s asset liquidation, unless a separate liquidation organization must be established according to the company’s charter.
- Within 07 working days from the approval date, the decision on dissolution meeting minutes must be sent to the business registration authority, tax authority, and employees of the enterprise; the decision on dissolution shall be posted on National Business Registration Portal, the enterprise’s headquarter, branches, and representative offices.
If there are unsettled financial obligations, the decision on dissolution shall be enclosed with the debt settlement plan and sent to the creditors, people with relevant rights, obligations, and interests. The plan must contain the creditors’ names and addresses; the amount of debts, deadline, location, and method of payment; method and deadline for settlement of creditors’ complaints.
- The business registration authority shall post a notification of the status of every enterprise undergoing dissolution process on the National Business Registration Portal right after receiving the decision on dissolution from the enterprise. The notification must be posted together with the decision on dissolution and debt settlement plan (if any).
- The enterprise’s debts shall be paid in the following order:
+ Unpaid salaries, severance pay, social insurance as prescribed by law, other benefits of employees according to collective bargaining agreement and signed employment contracts;
+ Tax debts;
+ Other debts.
- After all debts and dissolution costs are paid, the remaining value shall be received by the sole proprietorship’s owner, members, shareholders, or owner of the company according to their holding of stakes or shares in the company.
- The legal representative of the enterprise shall send the petition for dissolution to the business registration authority within 05 working days from the day on which all of the enterprise’s debts are settled.
- The business registration authority shall update the enterprise’s legal status of National Enterprise Registration Database if no opinions or objections from relevant parties are received after 180 days from the day on which the decision on dissolution is receipt as prescribed in Clause 3 of this Article or within 05 working days from the receipt of the petition for dissolution.
- Government shall elaborate the procedures for business dissolution.
Best regards!
