Enterprise Law 2020: Suspension, Cessation, Termination of Operations, and Dissolution of Enterprises

Enterprise Law 2020: Temporary suspension, suspension, termination of operation, and dissolution of enterprises - Illustrative image.

According to the provisions of Clause 2, Article 206 of the Enterprise Law 2020, the business registration authority, the competent state authority may request an enterprise to temporarily suspend, suspend operation, or terminate business in the following cases:

- Temporarily suspend or terminate the business of conditional business lines, conditional market access business lines for foreign investors when it is discovered that the enterprise does not meet the corresponding conditions as prescribed by law;

- Temporarily suspend business at the request of relevant authorities as prescribed by law on tax management, environment, and other relevant legal regulations;

- Suspend operations, terminate business activities in one or several sectors according to the court's decision.

Furthermore, Clause 1, Article 207 of the Enterprise Law 2020 stipulates the cases in which an enterprise is dissolved, including:

- The expiration of the operating period recorded in the company's charter without a decision to extend;

- According to the resolution or decision of the business owner for a private enterprise, of the members' council for a partnership, of the members' council, company owner for a limited liability company, of the general shareholders' meeting for a joint-stock company;

- The company no longer meets the minimum number of members as prescribed by this Law for a continuous period of 6 months without completing the procedures for changing the type of enterprise;

- The enterprise registration certificate is revoked, except in cases where the Law on Tax Management stipulates otherwise.

Additionally, Clause 3, Article 206 of the Enterprise Law 2020 stipulates that during the period of temporary suspension of business, enterprises must pay all outstanding taxes, social insurance, health insurance, and unemployment insurance; continue to pay debts, complete the performance of signed contracts with customers and employees, unless otherwise agreed by the enterprise, creditors, customers, and employees.

Businesses must notify in writing the business registration authority at least 3 working days before the date of temporary suspension or resumption of business ahead of the notified schedule.

Details of the document can be seen at Enterprise Law 2020, effective January 1, 2021.

Le Vy

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