When is the change in legal status when an enterprise temporarily suspends business?

Changing the legal status when an enterprise temporarily suspends business is specified in Clause 1 Article 41 Decree 01/2021/ND-CP as follows:

Legal status of enterprises

Legal statuses of enterprises in the National Database on Business Registration include:

1. “Temporary suspension of business” is the legal status of an enterprise that is temporarily suspending business according to the provisions of Clause 1, Article 206 of the Law on Enterprises. The date of changing the legal status “Temporary suspension of business” is the date the registered enterprise begins to temporarily suspend business. The end date of the legal status “Temporary suspension of business” is the end date of the business suspension period that the enterprise has announced or the date the enterprise registers to resume business before the announced deadline.

At the same time, base Clause 1 Article 206 Law on Enterprises 2020 regulations:

Suspension, suspension of operations, termination of business

1. Enterprises must notify the Business Registration Authority in writing at least 03 working days before the date of suspension of business or resumption of business before the announced deadline.

…

Accordingly, when temporarily suspending business, the enterprise is responsible for notifying the Business Registration Authority in writing at least 03 working days before the date of suspension.

The date of changing the legal status “Temporary suspension of business” is the date the registered enterprise begins to temporarily suspend business.

The end date of the legal status “Temporary suspension of business” is the end date of the business suspension period that the enterprise has announced or the date the enterprise registers to resume business before the announced deadline.

If an enterprise temporarily suspends business, what additional documents must be included with the suspension notice?

Procedures for notifying an enterprise to temporarily suspend business are specified in Clause 2, Article 66 Decree 01/2021/ND-CP as follows:

Registering to temporarily suspend business and resume business before the announced deadline for enterprises, branches, representative offices, and business locations

1. In case an enterprise, branch, representative office, or business location temporarily suspends business or resumes business before the announced deadline, the enterprise sends a notice to the Business Registration Office where the enterprise, branch, representative office, or business location is located at least 03 working days before the date of suspension of business or resumption of business before the announced deadline. In case an enterprise, branch, representative office, or business location wishes to continue to temporarily suspend business after the end of the notified period, it must notify the Business Registration Office at least 03 working days before the date of continued business suspension. The business suspension period of each notice must not exceed one year.

2. In case an enterprise temporarily suspends business, the notice must be accompanied by a resolution, decision and a copy of the meeting minutes of the Board of Members for limited liability companies with two or more members, partnerships, or of the Board of Directors for joint stock companies; Resolution and decision of the company owner for a one-member limited liability company on temporary business suspension.

3. After receiving the business registration dossier, the Business Registration Office issues a Receipt, checks the validity of the dossier and issues a confirmation that the enterprise, branch, representative office, or business location has registered to temporarily suspend business, and a confirmation that the enterprise, branch, representative office, or business location has registered to resume business before the announced deadline within 03 working days from the date of receiving the valid dossier.

Thus, according to regulations, in case an enterprise temporarily suspends business, the notice must include:

– Resolutions, decisions and copies of meeting minutes of the Board of Members for limited liability companies with two or more members or partnerships on temporary business suspension;

– Resolutions, decisions and copies of meeting minutes of the Board of Directors for joint stock companies on business suspension;

– Resolution or decision of the company owner for a one-member limited liability company on temporary suspension of business.

During the temporary suspension of business, what responsibilities do businesses have?

Responsibilities of enterprises during the temporary suspension of business are specified in Clause 3, Article 206 of the Law on Enterprises 2020 regulations:

Suspension, suspension of operations, termination of business

2. Business registration agencies and competent state agencies require enterprises to temporarily suspend, suspend operations, or terminate business in the following cases:

a) Temporarily suspend or terminate business in conditional business lines, conditional market access industries and trades for foreign investors when detecting that the enterprise does not meet the corresponding conditions according to the provisions of law;

b) Temporarily Cessation of business at the request of relevant agencies according to the provisions of law on tax management, environment and other relevant laws;

c) Suspension of operations, termination of business in one or several lines of business or in a number of fields according to the decision of the Court.

3. During the temporary suspension of business, enterprises must fully pay taxes, social insurance, health insurance, and unemployment insurance; continue to pay debts, complete the implementation of contracts signed with customers and employees, unless the business, creditors, customers and employees have otherwise agreed.

4. The Government regulates in detail the order and procedures for coordination between the Business Registration Authority and competent state agencies in the cases specified in Clause 2 of this Article.

Thus, according to regulations, during the temporary suspension of business, enterprises are responsible for:

– Pay all outstanding taxes, social insurance, health insurance, and unemployment insurance;

– Continue to pay debts, complete the implementation of contracts signed with customers and employees, unless otherwise agreed upon by the business, creditors, customers and employees.