Actions prohibited from the issuance date of the dissolution decision in Vietnam

Cases of and conditions for dissolution of enterprises in Vietnam

Pursuant to Article 207 of the Law on Enterprises 2020, 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 GMS (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;

- The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration 2019.

An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration. The relevant manager and the enterprise who have their Business Registration Certificate revoked are jointly responsible for the enterprise’s debts.

Actions prohibited from the issuance date of the dissolution decision in Vietnam (Internet image) 

What are included in the application for dissolution of enterprises in Vietnam?

Pursuant to Article 210 of the Law on Enterprises 2020, 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).

Members of the Board of Directors (for joint stock companies), members of the Board of Members (for limited liability companies), the owner (for sole proprietorships), the Director/General Director, general partners and legal representatives shall be responsible for the accuracy and truthfulness of the application.

In case the application contains inaccurate or false information, the persons specified above shall jointly provide the outstanding employees’ benefits, taxes and other debts and bear personal responsibility for the consequences that occur within 05 years from the day on which the application is submitted to the business registration authority.

Actions prohibited from the issuance date of the dissolution decision in Vietnam

Pursuant to Article 211 of the Law on Enterprises 2020, from the issuance date of the dissolution decision, the enterprise and its executives are prohibited from the following actions:

- Concealing, disguising assets;

- Denying or reducing the creditors’ claims to the debts;

- Convert unsecured debts into debts secured with the enterprise’s assets;

- Concluding new contracts, except for dissolving the enterprise;

- Pledging, donating, leasing out assets;

- Terminating effective contracts;

- Raising capital in any shape or form.

The persons who commit the violations mentioned in Clause 1of this Article, depending on their nature and seriousness, will be held liable to administrative penalties or criminal prosecution and pay damages.

Mai Thanh Loi

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