Vietnam: Guidance on procedures for enterprise dissolution under the Law on Enterprises 2020

Specifically, according to Clause 1 Article 207 of the Law on Enterprises 2020 of Vietnam, an enterprise shall be dissolved in the following cases:

+ The operating period specified in the company's charter expires without an extension decision;

+ The enterprise is dissolved under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the General Meeting of Shareholders (for joint stock companies);

+ The enterprise fails to maintain the adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business;

Enterprise dissolution in 03 cases specified above shall be carried out as follows:

Step 1: A resolution or decision on the dissolution is issued

According to Clause 1 Article 208 of the Law on Enterprises 2020 of Vietnam, dissolution resolution or decision shall contain the following information:

- The enterprise’s name and headquarters address;

- Reasons for dissolution;

- Time limit and procedures for finalization of contracts and payment of the enterprise’s debts;

- Plan for settlement of obligations under employment contracts;

- Full name and signature of the owner of the sole proprietorship, the company’s owner, the President of the Board of Members, the President of the Board of Directors

Step 2: Organize the liquidation of the enterprise’s assets

According to Clause 2 Article 208 of the Law on Enterprises 2020 of Vietnam, the owner of the sole proprietorship, the Board of Members or the owner, the Board of Directors directly organizes the liquidation of the enterprise’s assets.

However, if the company's charter stipulates the establishment of a separate liquidation organization, it shall proceed in accordance with the provisions of the charter.

Note: An enterprise’s debts shall be paid in the following order of priority:

- Unpaid salaries, severance pay, social insurance, health insurance, unemployment insurance premiums and other benefits of employees under the collective bargaining agreement and concluded employment contracts;

- Tax debts;

- Other debts;

Step 3: Publicly announce the dissolution resolution or decision

According to Clause 3 Article 208 of the Law on Enterprises 2020 of Vietnam, within 07 working days from the ratification date, the resolution or decision on dissolution and the minutes of the meeting shall be sent to the business registration authority, tax authority and the enterprise’s employees. 

The resolution or decision shall be posted on the National Enterprise Registration Portal, displayed at the enterprise’s headquarters, branches and representative offices.

Note: In case the enterprise still has unpaid debts, the resolution or decision and the debt payment  plan shall be sent to the creditors and persons with related rights, obligations and interest. The debt payment  plan shall contain the creditors’ names, debts, repayment time, location and method; method and time limit for settling creditors’ complaints;

Step 4: Application for dissolution

According to Clause 1 Article 210 of the Law on Enterprises 2020 of Vietnam, an application for dissolution of an enterprise shall consist of:

- The notification of the enterprise’s dissolution;

- The report on liquidation of the enterprise’s assets;

- List of creditors and paid debts, including tax debts, social insurance, health insurance, unemployment insurance of employees after the dissolution decision is issued (if any).

Note: The enterprise’s legal representative shall submit the application for dissolution to the business registration authority within 05 working days from the day on which the enterprise’s debts are fully paid.

Step 5: Update the enterprise’s status on the national enterprise registration database

According to Clause 5 Article 210 of the Law on Enterprises 2020 of Vietnam, after 180 days from the notification date without further comments from the enterprise or written objections from relevant parties, or within 05 working days from the receipt of the application for dissolution, the business registration authority shall update the enterprise’s status on the national enterprise registration database.

Le Vy

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