Obligation to file a request to open bankruptcy proceedings when the company becomes insolvent of the owner of a one-member limited liability company

Is the owner of a single-member limited liability company obliged to file a request to open bankruptcy proceedings when the company becomes insolvent?

1. What is an insolvent enterprise?

Pursuant to Clause 1, Article 4 of the Bankruptcy Law 2014 regulations regulations on insolvent enterprises and cooperatives are as follows:

“An insolvent enterprise or cooperative is an enterprise or cooperative that fails to fulfill its debt payment obligation within 03 months from the payment due date”

According to the above regulations, your enterprise is considered insolvent when it fails to pay the debt within 03 months from the due date. payment due.

2. Who is obligated to file a request to open bankruptcy procedures?

Pursuant to the provisions of Clauses 3 and 4, Article 5 of the Bankruptcy Law 2014, the following people are obligated to file a request to open bankruptcy procedures:

“3. The legal representative of an enterprise or cooperative is obligated to file a request to open bankruptcy procedures when the enterprise, cooperatives become insolvent.

4. Owners of private enterprises, Chairman of the Board of Directors of joint stock companies, Chairman of the Board of Members of limited liability companies with two or more members, owners of single-member limited liability companies, partners of partnerships are obliged to file a request to open bankruptcy proceedings when the enterprise becomes insolvent.”

According to regulations above, when a single-member limited liability company becomes insolvent, the company owner is obligated to file a request to open bankruptcy proceedings.

Thus, according to the information you have provided, you are the owner of a single-member limited liability company. Therefore, when the company becomes insolvent, you are the one who is obliged to file a request to open bankruptcy proceedings.

3. What methods are there to file a request to open bankruptcy proceedings?

The method of filing a request to open bankruptcy proceedings is specified in Clause 1, Article 30 of the 2014 Bankruptcy Law, specifically:

“1. A person requesting to open bankruptcy proceedings must submit the application and accompanying documents and evidence to the competent People’s Court by one of the following methods:

a) Submit directly to the People’s Court;

b) Send it to the People’s Court by post.”

According to the above regulations, you can apply in one of the following two forms:

– Submit directly at the People’s Court

– Send it to the People’s Court by post

Note: When applying, you need to submit relevant documents and evidence.

4. Will the owner of a single-member limited liability company not file a request to open bankruptcy proceedings be fined?

Pursuant to Article 67 of Decree 82/2020/ND-CP stipulating Violations of regulations on filing obligations, as follows:

“A fine from 1,000,000 VND to 3,000,000 VND shall be imposed for the actions of the owner of a private enterprise, the chairman of the board of directors of a joint stock company, the chairman of the board of members of a limited liability company with two or more members, the owner of a one-member limited liability company, a general partner of a partnership or the legal representative of the enterprise or cooperative failing to file a request to open bankruptcy procedures when Enterprises and cooperatives become insolvent”

Accordingly, when your company becomes insolvent but you do not file a request to open bankruptcy proceedings, you may be fined 1,000,000 VND to 3,000,000 VND.

Note: Above are the fines for individuals. In case an organization commits an administrative violation like an individual, the fine is equal to 2 times the fine for an individual (Based on the provisions in Clause 4, Article 4 of Decree 82/2020/ND-CP).