Vietnam: Procedures for termination of multi-level marketing activities

Decree No. 40/2018/ND-CP of Vietnam’s Government specifies that MLM activities are terminated in the following cases: the MLM registration certificate expires without renewal; the MLM company terminates MLM activities at its own will; the MLM registration certificate is revoked by the competent authority.

When terminating MLM activities, the MLM company shall:

- Send a written notification of termination of MLM activities to the Ministry of Industry and Trade, post up the notice thereof at its head office, branches, representative offices and business locations, and on its website;

- Terminate or finalize MLM contracts and solve benefits for MLM participants in accordance with law regulations on MLM management;

- Fulfill obligations specified in the decision given by a competent authority on penalties for violations against regulations on MLM activities.

Procedures for termination of multi-level marketing activities

* In case a MLM company terminates MLM activities at its own will, it must make a documentation of notification of termination of MLM activities, comprising:

- The notice of termination of MLM activities;

- The report made according to the Form No. 15 stated in the Appendix enclosed herewith;

- A copy of the certificate of company registration of the latest modification or other document of the same validity;

- The original MLM registration certificate;

- A copy of the decision on the termination of MLM activities issued by the proprietor if the MLM company is a private enterprise, or the company owner if the MLM company is a single-member limited liability company; the decision on and the minutes of the meeting discussing the termination of MLM activities issued by the Members’ Council if the MLM company is a limited liability company with two or more members, or the General Shareholders’ Meeting if the MLM company is a joint-stock company, or partners if the MLM company is a partnership;

After fully preparing the documents, the order and procedures for terminating multi-level marketing activities shall be carried out as follows:

- The MLM company shall submit the documentation of notification of termination of MLM activities to the Ministry of Industry and Trade (either directly or by post);

- Within 10 working days from the receipt of a valid notification documentation, the Ministry of Industry and Trade shall issue a written certification of receipt of the documentation of notification of termination of MLM activities, inform Provincial Departments of Industry and Trade nationwide of the company’s termination of MLM activities by one of the modes prescribed in Clause 5 Article 10 herein, and post such information on its website.

* In case a MLM company terminates MLM activities because its MLM registration certificate expires or is revoked, the documentation of notification of termination of MLM activities must comprise:

- The notice of termination of MLM activities;

- The report made according to the Form No. 15 stated in the Appendix enclosed herewith;

- A copy of the certificate of company registration of the latest modification or other document of the same validity;

- The original MLM registration certificate.

After fully preparing the documents, the order and procedures for terminating multi-level marketing activities shall be carried out as follows:

- Within 30 working days after the MLM registration certificate expires or is revoked, the MLM company shall submit the documentation of notification of the termination of MLM activities to the Ministry of Industry and Trade (either directly or by post);

- Within 10 working days from the receipt of a valid notification documentation, the Ministry of Industry and Trade shall issue a written certification of receipt of the documentation of notification of termination of MLM activities, inform Provincial Departments of Industry and Trade nationwide of the company’s termination of MLM activities by one of the modes as prescribed, and post such information on its website.

View more details at Decree No. 40/2018/ND-CP of Vietnam’s Government, effective from May 02, 2018.

-Thao Uyen-

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