Procedures for termination of multi-level marketing activities in Vietnam from June 20, 2023

Procedures for termination of MLM activities in Vietnam from June 20, 2023 (Internet image)

1. What is multi-level marketing?

According to Clause 1, Article 3 of Decree 40/2018/ND-CP, multi-level marketing (MLM) means a business model that utilizes the network of participants at different levels wherein commissions, bonuses and other economic benefits are or may be paid to participants based on their personal sales and the sales made by other distributors below the participants, also known as downline distributors.

2. Procedures for termination of MLM activities in Vietnam from June 20, 2023

2.1. In the case that the MLM enterprise conducts self-termination of its MLM activities in Vietnam

- Application for termination of MLM activities includes:

+ Notification for the termination of MLM activities under form No. 06 provided in the Appendix attached to this Decree;

+ Report in accordance with form No. 06a provided in the Appendix attached to this Decree;

+ 01 copy of latest change of enterprise registration certificate or the documents with equivalent legal validity;

+ 01 original MLM registration certificate;

+ 01 copy of decision on termination of MLM activities of the owner for a sole proprietorship or limited liability company with one member; decision and meeting minutes on the termination of MLM activities of the members’ council for a limited liability company with two or more members; decision and meeting minutes of the general shareholders for a joint stock company; partners’ in a partnership.

- Procedures to terminate MLM activities:

+ The enterprise shall submit the Notice of termination of MLM activities to the Ministry of Industry and Trade (in person, online or by post);

+ If the application is not satisfactory according to Point a of this Clause, the Ministry of Finance shall issue a request for supplementation of the application within 10 working days from the day on which the application is received. The time limit for supplementation is 15 working days from the day on which the request is received.

+ In case the enterprise fails to supplement the application within the time limit or the enterprise is still unsatisfactory, the Ministry of Industry and Trade shall issue a written notice of the return of the application and provide explanation.

+ Within 10 working days from the date on which the application to terminate MLM activities is received, the Ministry of Industry and Trade shall issue a document confirming the receipt of the application, notify provincial Departments of Industry and Trade nationwide by one of the methods provided in clause 5 Article 10 of this Decree and publish information on the Ministry of Industry and Trade’s web portal;

(Article 18 of Decree 40/2018/ND-CP, as amended by clause 13 Article 1 of Decree 18/2023/ND-CP)

2.2. In case of termination of MLM activities due to expiration or revocation of the MLM registration certificate in Vietnam

- Application for termination of MLM activities includes:

+ Notification for the termination of MLM activities under form No. 06 provided in the Appendix attached to this Decree;

+ Report in accordance with form No. 06a provided in the Appendix attached to this Decree;

+ 01 copy of latest change of enterprise registration certificate or the documents with equivalent legal validity;

+ 01 original MLM registration certificate.

- Procedures to terminate MLM activities:

+ Within 30 working days from the date on which the MLM registration certificate expires or is revoked, the enterprise shall submit the Notice of termination of MLM activities to the Ministry of Industry and Trade (in person, online or by post);

+ If the application is not satisfactory according to Point a of Clause 2 of Article 18 of Decree 40/2018/ND-CP, the Ministry of Finance shall issue a request for supplementation of the application within 10 working days from the day on which the application is received. The time limit for supplementation is 15 working days from the day on which the request is received.

+ In case the enterprise fails to supplement the application within the time limit or the enterprise is still unsatisfactory, the Ministry of Industry and Trade shall issue a written notice of the return of the application and provide explanation.

+ Within 10 working days from the date on which the application to terminate MLM activities is received, the Ministry of Industry and Trade shall issue a document confirming the receipt of the application, notify provincial Departments of Industry and Trade nationwide by one of the methods provided in clause 5 Article 10 of Decree 40/2018/ND-CP and publish information on the Ministry of Industry and Trade’s web portal.

(Article 18 of Decree 40/2018/ND-CP, as amended by clause 13 Article 1 of Decree 18/2023/ND-CP)

Decree 18/2023/ND-CP takes effect from June 20, 2023.

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