In what cases is an enterprise dissolved? What are the order and procedures for dissolution of a business according to the latest current regulations?

In what cases is an enterprise dissolved?

In Clause 1, Article 207 of the Law on Enterprises 2020, an enterprise is dissolved when it falls into one of the following cases here:

“1. The enterprise is dissolved in the following cases:

a) The end of the operating term stated in the company charter without a decision to extend;

b) According to the resolution or decision of the business owner for private enterprises, of the Board of Members for partnerships, of the Board of Members, the company owner for for limited liability companies, of the General Meeting of Shareholders for joint stock companies;

c) The company no longer has the minimum number of members as prescribed by this Law for a period of 06 consecutive months without carrying out procedures for converting the type of enterprise;

d) The Business Registration Certificate is revoked, except in cases where the Law on Tax Administration stipulates other.”

Note: Enterprises can only be dissolved when they ensure payment of all debts and other property obligations and are not in the process of resolving disputes in Court or Arbitration.

How are the order and procedures for dissolution of enterprises regulated by law?

According to Article 70 of Decree 01/2021/ND-CP, the order and procedures for dissolution of enterprises for the cases at Points a, b, c Clause 1, Article 207 of the Law on Enterprises 2020 are prescribed as follows following:

Step 1: Within 07 working days from the date of passing the resolution or decision on dissolution, the enterprise shall send a notice of dissolution to the Business Registration Office where the enterprise’s head office is located. Accompanying the notice must be the following documents:

– Resolutions, decisions and meeting minutes of the Board of Members for limited liability companies with two or more members, partnerships, and of the General Meeting of Shareholders for joint stock companies; Resolutions and decisions of the company owner for single-member limited liability companies on dissolution of the enterprise;

– Debt settlement plan (if any).

Step 2: Within 01 working day from the date of receiving notice of enterprise dissolution, the Business Registration Office must post the documents specified in Clause 1 of this Article and notify the status of the enterprise undergoing dissolution procedures on the National Business Registration Portal, change the legal status of the enterprise in the National Business Registration Database to the state of undergoing dissolution procedures and send information about the enterprise’s dissolution to the Tax Authority. Enterprises carry out procedures to fulfill tax obligations with Tax Authorities according to the provisions of the Law on Tax Administration.

Step 3: Within 05 working days from the date of payment of all debts of the enterprise, the enterprise sends the enterprise dissolution registration application to the Business Registration Office where the enterprise is headquartered.

Note: Before submitting the enterprise dissolution registration application, the enterprise must carry out procedures to terminate the operation of the enterprise’s branch, representative office, or business location at the Business Registration Office where the branch, representative office, or business location is located.

Step 4: After receiving the application for enterprise dissolution registration, the Business Registration Office sends information about the enterprise’s dissolution registration to the Tax Authority. Within 02 working days from the date of receiving information from the Business Registration Office, the Tax Authority shall send comments on the completion of the enterprise’s tax payment obligation to the Business Registration Office.

Step 5: Within 05 working days from the date of receipt of the enterprise dissolution registration dossier, the Business Registration Office will change the legal status of the enterprise in the National Business Registration Database to dissolved status if it does not receive a refusal from the Tax Authority, and at the same time issue a notice of dissolution of the enterprise.

In case after 180 days from the date the Business Registration Office receives the notice enclosed with the enterprise’s resolution or dissolution decision, the Business Registration Office does not receive the enterprise’s dissolution registration dossier and written objections from the relevant parties, the Business Registration Office will change the legal status of the enterprise in the National Business Registration Database to a dissolved state, send information about the enterprise’s dissolution to the Tax Authority, and issue a notice. Notify the dissolution of the enterprise within 03 working days from the end of the above period.

Note: For businesses using seals issued by the police, the business is responsible for returning the seal and the Certificate of seal sample registration to the police according to regulations when completing dissolution procedures.

Thus, in case you want to dissolve your business for personal reasons, you need to follow the order and procedures prescribed above.

What does the enterprise dissolution dossier according to the latest regulations include?

Pursuant to Clause 1, Article 210 of the Law on Enterprises 2020, the enterprise dissolution dossier includes the following documents:

– Notice of enterprise dissolution;

– Report on liquidation of corporate assets; List of creditors and paid debts, including payment of all tax debts and social insurance, health insurance, and unemployment insurance payments for employees after deciding to dissolve the enterprise (if any).