Currently, due to the complicated developments of the Covid-19 pandemic, many businesses in Vietnam are seriously affected and are forced to choose the solution of temporarily suspending business operations. So in case an enterprise temporarily suspends business but does not notify, what are the legal consequences?
Article table of contents
DOWNLOAD Notice of business suspension/business resumption before the notified date
According to Vietnam’s current regulations, business suspension is a right of enterprises. However, an enterprise may suspend its business as long as a written notification of the time and duration of suspension and time of resumption is sent to the business registration authority at least 15 days before the date of suspension or resumption. This regulation still applies in case the enterprise resumes its business before the notified date. (Clause 1 Article 200 of the Law on Enterprises 2014 of Vietnam).
Moreover, during the suspension period, the enterprise shall pay outstanding tax, keep paying its debts, and execute contracts with customers and employers, unless otherwise agreed among the enterprise, its creditors, customers, and employees.
According to Clause 2 Article 57 of Decree No. 78/2015/NĐ-CP of Vietnam’s Government: “The suspension period must not exceed one year. If the enterprise or its branch/representative office/business location is still suspended after this period, another notification must be sent to the Business Registration Office. The total duration of continuous suspension must not exceed two years.”.
If the enterprise temporarily suspends business operations for 01 year without notifying the Business Registration Authority and the tax authority, it shall have its certificate of enterprise registration revoked according to Point c Clause 1 Article 211 of the Law on Enterprises 2014 and be administratively sanctioned according to Decree No. 50/2016/NĐ-CP of Vietnam’s Government, specifically as follows:
Article 32. Other report-related offenses
1. A fine of VND 1,000,000 - VND 2,000,000 shall be imposed for any of the following violations:
…
d) Failure to notify or notify on time the business registration authority or tax authority of the time and duration of business suspension or time of resumption;
2. A fine of VND 2,000,000 - VND 3,000,000 shall be imposed for any of the following violations:
a) Registering a business suspension without notifying the suspension of the branch, representative office, or business location;
3. Remedial measures:
a) Send a notification to the business registration authority or tax authority of the information mentioned in Point a Clause 1 of this Article;
b) Send a notification to the business registration authority of the information mentioned in Point b, Point c, Point d, Point dd Clause 1 and Clause 2 of this Article.
Thus, enterprises that fail to notify or notify on time the business registration authority or tax authority of the time and duration of business suspension or time of resumption shall be fined from VND 1,000,000 to VND 2,000,000. Enterprises that register a business suspension without notifying the suspension of the branch, representative office, or business location shall be fined from VND 2,000,000 to VND 3,000,000. Concurrently, remedial measures will be applied to force notification to the business registration agency of the contents according to regulations.
Thu Ba
