What are conditions for dissolution of joint stock companies in Vietnam in 2024? What documents are included in the application for dissolution of joint stock companies in Vietnam?

What are conditions for dissolution of joint stock companies in Vietnam in 2024?

Pursuant to Article 207 of the Law on Enterprises in 2020 stipulating cases of and conditions for dissolution of enterprises:

Cases of and conditions for dissolution of enterprises

1. An enterprise shall be dissolved in the following cases:

a) The operating period specified in the company's charter expires without an extension decision;

b) The enterprise is dissolved under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the GMS (for joint stock companies);

c) The enterprise fails to maintain the adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business;

d) The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration.

2. An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration. Relevant executives and the enterprise mentioned in Point d Clause 1 of this Article are jointly responsible for the enterprise’s debts.

As regulated above, a joint stock company may only be dissolved in following cases:

- All of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration.

- Relevant executives and the enterprise whose Certificates of Enterprise Registration are revoked, unless otherwise prescribed by the Law on Tax administration, are jointly responsible for the enterprise’s debts.

What are conditions for dissolution of joint stock companies in Vietnam in 2024? What documents are included in the application for dissolution of joint stock companies in Vietnam? - image from internet

What documents are included in the application for dissolution of joint stock companies in Vietnam?

Pursuant to Article 210 of the Law on Enterprises in 2020 stipulating the application for dissolution of joint stock companies in Vietnam:

Application for dissolution

1. An application for dissolution of an enterprise shall consist of:

a) The notification of the enterprise’s dissolution;

b) The report on liquidation of the enterprise’s assets; list of creditors and paid debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any).

2. Members of the Board of Directors (for joint stock companies), members of the Board of Members (for limited liability companies), the owner (for sole proprietorships), the Director/General Director, general partners and legal representatives shall be responsible for the accuracy and truthfulness of the application.

3. In case the application contains inaccurate or false information, the persons specified in Clause 2 of this Article shall jointly provide the outstanding employees’ benefits, taxes and other debts and bear personal responsibility for the consequences that occur within 05 years from the day on which the application is submitted to the business registration authority.

As regulated above, an application for dissolution of an enterprise shall consist of:

- The notification of the enterprise’s dissolution;

- The report on liquidation of the enterprise’s assets;

- List of creditors and paid debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any).

What actions are prohibited from the issuance date of the dissolution decision of joint stock companies in Vietnam?

Pursuant to Article 211 of the Law on Enterprises in 2020 stipulating actions prohibited from the issuance date of the dissolution decision:

Actions prohibited from the issuance date of the dissolution decision

1. From the issuance date of the dissolution decision, the enterprise and its executives are prohibited from the following actions:

a) Concealing, disguising assets;

b) Denying or reducing the creditors’ claims to the debts;

c) Convert unsecured debts into debts secured with the enterprise’s assets;

d) Concluding new contracts, except for dissolving the enterprise;

dd) Pledging, donating, leasing out assets;

e) Terminating effective contracts;

g) Raising capital in any shape or form.

2. The persons who commit the violations mentioned in Clause 1of this Article, depending on their nature and seriousness, will be held liable to administrative penalties or criminal prosecution and pay damages.

As regulated above, actions prohibited from the issuance date of the dissolution decision include:

- Concealing, disguising assets;

- Denying or reducing the creditors’ claims to the debts;

- Convert unsecured debts into debts secured with the enterprise’s assets;

- Concluding new contracts, except for dissolving the enterprise;

- Pledging, donating, leasing out assets;

- Terminating effective contracts;

- Raising capital in any shape or form.