What Is the Order and Procedure for Dissolving a Joint Stock Company? What Does the Dissolution Dossier Include?

What are the cases and conditions for dissolving a joint stock company?

Pursuant to Article 207 of the Law on Enterprises 2020 on cases and conditions for enterprise dissolution as follows:

– An enterprise is dissolved in the following cases:

+ Expiry of the operation term stated in the company charter without an extension decision;

+ Under the resolution or decision of the enterprise owner for private enterprises, of the Members’ Council for partnerships, of the Members’ Council or company owner for limited liability companies, or of the General Meeting of Shareholders for joint stock companies;

+ The company no longer has the minimum number of members as prescribed by this Law for 06 consecutive months without carrying out procedures to convert the enterprise type;

+ Having the Enterprise Registration Certificate revoked, except where the Law on Tax Administration provides otherwise.

– An enterprise may only be dissolved when it ensures full payment of all debts and other asset obligations and is not in the process of dispute resolution at a Court or Arbitration. The relevant managers and the enterprise prescribed at Point d, Clause 1 of this Article are jointly liable for the enterprise’s debts.

What does the joint stock company dissolution dossier include?

Under Article 210 of the Law on Enterprises 2020 on enterprise dissolution dossiers as follows:

– An enterprise dissolution dossier includes the following documents:

+ Notice of enterprise dissolution;

+ Report on liquidation of enterprise assets; list of creditors and debts paid, including full payment of tax debts and social insurance, health insurance, and unemployment insurance debts for employees after the enterprise dissolution decision (if any).

– Members of the Board of Directors of joint stock companies, members of the Members’ Council of limited liability companies, company owners, private enterprise owners, Directors or General Directors, general partners, and legal representatives of enterprises are responsible for the truthfulness and accuracy of enterprise dissolution dossiers.

– Where a dissolution dossier is inaccurate or forged, the persons prescribed in Clause 2 of this Article are jointly liable for paying unresolved employee benefits, unpaid taxes, and other unpaid debts, and bear personal liability before law for consequences arising within 05 years from the date of submitting the enterprise dissolution dossier to the business registration agency.

How are the order and procedures for dissolving a joint stock company carried out?

The order and procedures for dissolving a joint stock company are carried out under Article 208 of the Law on Enterprises 2020, specifically:

The dissolution of an enterprise in the cases prescribed at Points a, b, and c, Clause 1, Article 207 of this Law is carried out as follows:

– Adopting the enterprise dissolution resolution or decision. The enterprise dissolution resolution or decision must include the following principal contents:

+ The enterprise’s name and head office address;

+ The reason for dissolution;

+ The time limit and procedures for liquidating contracts and paying the enterprise’s debts;

+ The plan for handling obligations arising from labor contracts;

+ The full name and signature of the private enterprise owner, company owner, President of the Members’ Council, or President of the Board of Directors;

– The private enterprise owner, Members’ Council or company owner, or Board of Directors directly organizes the liquidation of enterprise assets, except where the company charter provides for establishing a separate liquidation organization;

– Within 07 working days from adoption, the dissolution resolution or decision and the meeting minutes must be sent to the business registration agency, the tax authority, and employees of the enterprise. The dissolution resolution or decision must be published on the National Portal on enterprise registration and publicly posted at the head office, branches, and representative offices of the enterprise.

Where the enterprise still has unpaid financial obligations, it must send, together with the dissolution resolution or decision and the debt settlement plan, to creditors and persons with related rights, obligations, and interests. The debt settlement plan must contain the creditor’s name and address; the debt amount, time limit, place, and method of payment of such debt; and the method and time limit for resolving creditors’ complaints;

– The business registration agency must announce the enterprise’s status of undergoing dissolution procedures on the National Portal on enterprise registration immediately after receiving the enterprise’s dissolution resolution or decision. The announcement must be accompanied by the published dissolution resolution or decision and the debt settlement plan (if any);

– The enterprise’s debts are paid in the following order of priority:

+ Wage debts, severance allowances, social insurance, health insurance, and unemployment insurance as prescribed by law and other employee benefits under the collective labor agreement and signed labor contracts;

+ Tax debts;

+ Other debts;

– After payment of enterprise dissolution costs and debts, the remainder is divided among the private enterprise owner, members, shareholders, or company owner in proportion to their capital contribution or share ownership;

– The enterprise’s legal representative sends the enterprise dissolution dossier to the business registration agency within 05 working days from the date of full payment of all the enterprise’s debts;

– After 180 days from receipt of the dissolution resolution or decision under Clause 3 of this Article without receiving opinions on dissolution from the enterprise or written objections from relevant parties, or within 05 working days from receipt of the dissolution dossier, the business registration agency updates the enterprise’s legal status on the National Database on enterprise registration;

– The Government prescribes in detail the order and procedures for enterprise dissolution.