The Law on Enterprises 2020 of Vietnam will take effect from January 01, 2021, which has stipulated several new points compared to the current Law on Enterprises. In particular, the Law on Enterprises 2020 of Vietnam has shortened the notice period before suspending business of the enterprise.
Article table of contents
According to Article 200 of the Law on Enterprises 2014 of Vietnam (current regulations), 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. To be specific:
“Article 200. Enterprise suspension
1. A 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.
2. The business registration authority or competent authority shall request an enterprise to suspend the business lines subject to conditions if such conditions are not satisfied by the enterprise.
3. 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.”
However, according to Article 206 of the Law on Enterprises 2020 of Vietnam, the notice period before suspending business of the enterprise has been shortened. To be specific:
“Article 206. Business suspension and termination
1. An enterprise shall send a written notification to the business registration authority at least 03 working days before the suspension or resumption date.
3. During the suspension period, the enterprise shall fully pay the unpaid taxes, social insurance, health insurance, unemployment insurance premiums and fulfill contracts with its clients and employees, unless otherwise agreed by the enterprise, creditors, clients and employees.”
Thus, according to the above provisions, the Law on Enterprises 2020 of Vietnam has shortened the notice period before suspending business of the enterprise from 15 working days to 03 working days. Besides, the Law on Enterprises 2014 of Vietnam did not stipulate that the enterprise must fully pay the unpaid taxes, social insurance, health insurance, unemployment insurance premiums suspending business as prescribed by the Law on Enterprises 2020.
It can be that the Law on Enterprises 2020 of Vietnam has more specific regulations on the obligations of enterprises when suspending business, the enterprise must fully pay the unpaid taxes, social insurance, health insurance, unemployment insurance premiums and fulfill contracts with its clients and employees. Concurrently, the enterprise shall send a written notification to the business registration authority only 03 working days before the suspension or resumption date.
Moreover, the Law on Enterprises 2020 of Vietnam also stipulates cases that the business registration authority and competent authorities are entitled to request an enterprise to suspend or terminate its business operation:
- The enterprise that does not fully satisfy the conditions for doing business in restricted business lines must suspend or terminate business operation in the corresponding business lines; (stipulated in the Law on Enterprises 2014)
- Relevant authorities request the suspension in accordance with regulations of law on tax administration, environment and relevant laws; (new case supplemented by the Law on Enterprises 2020)
- Operations in one or some business lines have to be suspended or terminated under a court decision. (new case supplemented by the Law on Enterprises 2020)
The Law on Enterprises 2020 of Vietnam will take effect from January 01, 2021 and replace the Law on Enterprises 2014. Thus, enterprises need to understand and comply with the provisions of the law.
Ty Na
- Key word:
- Law on Enterprises 2020
