The process of dissolving a business in Vietnam is a complex procedure that must adhere to legal regulations. If a business is facing difficulties and is no longer able to operate, dissolution may be the best option to legally terminate its activities. Below are the steps that need to be taken to dissolve a business.
Before proceeding with the dissolution, the business needs to carry out the following procedures:
- Termination of branch, representative office, and business location activities: According to Decree 01/2021/ND-CP, businesses must cease the operations of these units before submitting the dissolution application.
- Implementing dissolution according to the 2020 Enterprise Law: According to Article 208, the enterprise must carry out steps from passing the dissolution resolution, liquidating assets, to sending a dissolution notice to the competent authorities.
Step 1: Organize a Meeting Through a Dissolution Decision
The company needs to hold a meeting and pass a resolution for dissolution. This decision must be approved by:
- Owner of a single-member limited liability company.
- The members' council for a limited liability company with two or more members.
- The general meeting of shareholders for a joint-stock company.
- The partners in a partnership company.
The content of the dissolution decision includes:
- Name and address of the company's headquarters.
- Reason for dissolution.
- The deadline, procedures for contract liquidation and debt payment shall not exceed 6 months.
- Solutions for handling obligations arising from employment contracts.
- The signature of the legal representative of the enterprise.
Step 2: Announce the Decision to Dissolve
Within 7 working days from the date of approval, the business must:
- Send the resolution, decision on dissolution, and meeting minutes to the Business Registration Office, the tax authority, and the employees.
- Publish the dissolution decision on the National Business Registration Portal and publicly announce it at the headquarters, branches, and representative offices.
- If there are outstanding financial obligations, the business must submit a debt resolution plan to creditors and relevant parties.
Step 3: Liquidate Assets and Settle Debts
The enterprise organizes the liquidation of assets and settles debts in order of priority:
1. Wages, allowances, social insurance, health insurance, unemployment benefits, and other rights of workers.
2. Tax debt.
3. Other debts.
After settling all debts and dissolution expenses, the remaining amount will be distributed among the owners according to their capital contributions.
Step 4: Confirm Customs Tax Obligations, Import and Export Taxes
The enterprise sends a letter to the General Department of Customs to confirm tax obligations, even when there are no import or export activities. The General Department of Customs will notify the status of the tax file within 10-15 days.
Step 5: Submit the Tax Code Registration Application to the Tax Authority.
Businesses need:
- Send a letter requesting the cancellation of the tax identification number to the tax office where the business is headquartered.
- Send a letter requesting tax settlement and payment of any tax debts (if applicable).
Step 6: Submit the Dissolution Application to the Business Registration Office.
Within 5 working days from the date of settling all debts, the enterprise must submit the dissolution application, including:
- Announcement of business dissolution.
- Report on asset liquidation, list of creditors, and the amount of debt that has been settled.
Step 7: Update Activity Status on the National Portal
After receiving the application, the Business Registration Office will update the legal status of the enterprise in the National Business Registration Database within 5 working days. If there are no objections, the Business Registration Office will issue a dissolution notice.
If after 180 days from receiving the dissolution notice there are no objections from the relevant parties, the business will be confirmed as dissolved.
3. Prohibited Activities Từ When There Is a Decision to Dissolve
According to Article 211 of the 2020 Enterprise Law, enterprises and managers are prohibited from carrying out the following activities:
- Conceal, dissipate assets.
- Waive or reduce the right to claim a debt.
- Convert unsecured debt into secured debt.
- Sign a new contract (except for the contract for the dissolution of the business).
- Pledge, mortgage, gift, lease of assets.
- Mobilize capital in all forms.
Violations may be subject to administrative penalties or criminal prosecution and must compensate for damages if they cause consequences.
If you need more information or assistance, please contact A Dong Company for detailed advice.
Address: Room F2&F3 FOSCO Building, No. 2 Phung Khac Khoan, Da Kao Ward, District 1, Ho Chi Minh City
Hotline: 0903 693 301 - 0909 393 329 - 0903 641 946
Email: info@a-dong.com.vn
Website: a-dong.com.vn
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