Vietnam: Rules for settlement of assets when a cooperative is dissolved or declared bankrupt

According to Circular No. 31/2018/TT-BTC of the Ministry of Finance of Vietnam, the settlement of assets acquired from various sources of capital when a cooperative is dissolved or declared bankrupt shall be carried out in compliance with the following rules:

- The settlement of assets acquired from various sources of capital shall be carried out in the following order: Firstly, assets shall be transferred to cooperatives or state organizations among which other cooperatives located in the same district shall be given priority so as to serve public interests of local residential community; if assets cannot be transferred to state organizations, these assets shall be liquidated or sold to eligible entities; assets may be liquidated when they are fully depreciated, obsolete or damaged and could not be repaired or could not be effectively used after being repaired.

- Issuance of certification of the cooperative’s dissolution and decision to revoke the Certificate of cooperative registration (in case of voluntary dissolution) or decision to dissolve the cooperative (in case of compulsory dissolution).

- When a cooperative is declared bankrupt, its board of directors shall cooperate with relevant agencies and enterprises to receive, inventory, classify and perform asset valuation procedures.

- Undivided assets which are the rights to use land plots granted or leased by the Government shall be settled under regulations of the Law on land.

- In case documents and materials for determining the origin of an asset or the ratio of each source of capital to the asset's cost are not available, such asset shall be considered as an undivided asset.

- Tax liabilities incurred due to the selling or liquidation of assets must be paid in accordance with applicable laws and regulations.

More details can be found in Circular No. 31/2018/TT-BTC of the Ministry of Finance of Vietnam, which takes effect from May 14, 2018.

- Thanh Lam -

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE