Order and Procedures for Dissolution of Enterprises from January 01, 2021

Order and Procedures for Dissolving Enterprises from January 1, 2021 - Illustrative Image.

In Article 208 of the Law on Enterprises 2020, the process for dissolving enterprises in cases specified in points a, b, and c of clause 1, Article 207 of this Law is prescribed as follows:

1. Approval of a resolution or decision to dissolve the enterprise. The resolution or decision to dissolve the enterprise must include the following main contents:

- Name and address of the enterprise's head office;- Reason for dissolution;- Timeframe and procedures for liquidating contracts and settling the enterprise's debts;- Plan for handling obligations arising from labor contracts;- Full names and signatures of the private enterprise owner, company owner, Chairman of the Members' Council, Chairman of the Board of Directors.

2. The owner of the private enterprise, the Members' Council, or the company owner, Board of Directors directly organizes the liquidation of the enterprise's assets, except where the company charter provides for the establishment of a separate liquidation organization.

3. Within 07 working days from the approval date, the resolution, dissolution decision, and meeting minutes must be sent to the Business Registration Authority, tax authority, and employees in the enterprise. The dissolution resolution or decision must be published on the National Business Registration Portal and posted publicly at the enterprise's head office, branches, and representative offices.

In case the enterprise still has outstanding financial obligations, the dissolution resolution or decision and the debt settlement plan must be sent to creditors, individuals, organizations with related rights, obligations, and interests. The debt settlement plan must include the creditors' names and addresses, the amount of debt, the timeframe, place, and method of debt payment, and the manner and timeframe for resolving creditors' complaints.

4. The Business Registration Authority must announce the dissolution procedure status of the enterprise on the National Business Registration Portal immediately upon receiving the dissolution resolution or decision from the enterprise. The announcement must include the publication of the dissolution resolution or decision and the debt settlement plan (if any).

5. The enterprise's debts are settled in the following priority order:

- Wages, severance allowances, social insurance, health insurance, unemployment insurance as prescribed by law, and other benefits of employees according to collective labor agreements and signed labor contracts;- Tax debts;- Other debts.

6. After settling the dissolution costs and debts, the remaining assets are distributed to the private enterprise owner, members, shareholders, or company owner according to the ownership proportions of capital contributions or shares.

7. The legal representative of the enterprise shall submit the dissolution dossier to the Business Registration Authority within 05 working days from the date of settling all enterprise debts.

8. After 180 days from the date of receiving the dissolution resolution or decision as specified in clause 3 of this Article, if no objection of the dissolution from the enterprise or related parties is received in writing, or within 05 working days from the date of receiving the dissolution dossier, the Business Registration Authority updates the legal status of the enterprise on the National Business Registration Database.

Details of the regulations are specified in the Law on Enterprises 2020, promulgated on June 17, 2020.

Le Vy

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