What activities are business managers strictly prohibited from performing since the decision to dissolve the business?

What activities are business managers strictly prohibited from performing since the decision to dissolve the business?

Pursuant to Article 211 of the Law on Enterprises 2020, regulations on prohibited activities from the date of dissolution decision are as follows:

Prohibited activities since the decision to dissolve
1. Since the decision to dissolve the enterprise, the enterprise and enterprise managers are strictly prohibited from performing the following activities:
a) Hiding or dispersing assets;
b) Giving up or reducing debt collection rights;
c) Converting unsecured debts into debts secured by the enterprise’s assets Enterprise;
d) Sign a new contract, except for the purpose of dissolving the enterprise;
dd) Pledge, mortgage, donate, lease assets;
e) Terminate the implementation of an already effective contract;
g) Mobilize capital in any form consciousness.
…..

Thus, the enterprise manager is strictly prohibited from performing the following activities since the decision to dissolve the enterprise:

– Hiding or dispersing assets;

– Waiver or reduction of debt collection rights;

– Convert unsecured debts into debts secured by the business’s assets;

– Sign a new contract, except for the case of dissolution of the enterprise;

– Pledge, mortgage, donate or lease property;

– Terminate the implementation of an effective contract;

– Mobilize capital in all forms.

In what cases is an enterprise dissolved?

Pursuant to the provisions of Article 207 of the Law on Enterprises 2020, the cases and conditions for dissolution of enterprises are as follows:

Cases and conditions for dissolution of enterprises
1. The enterprise is dissolved in the following cases:
a) The operating term stated in the company charter ends without a decision to extend;
b) According to resolutions and decisions of the business owner for private enterprises, of the Board of Members for partnerships, of the Board of Members and company owner for limited liability companies, and 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 but Failure to carry out procedures for converting the type of business;
d) Having the Business Registration Certificate revoked, unless otherwise prescribed by the Law on Tax Administration.
….

Thus, the enterprise is dissolved in the following cases:

– The operating term stated in the company charter ends without a decision to extend;

– According to the resolutions and decisions of the business owner for private enterprises, of the Board of Members for partnerships, of the Board of Members and company owner for limited liability companies, and 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 a period of 06 consecutive months without carrying out procedures for converting the business type;

_ The Certificate of Business Registration has been revoked, unless the Law on Tax Administration has other provisions.

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.

The relevant manager and the enterprise are jointly responsible for the debts of the enterprise.

What documents are included in a business dissolution file?

Pursuant to the provisions of Clause 1, Article 210 of the Law on Enterprises 2020, regulations on enterprise dissolution documents are as follows:

Business dissolution records
1. Enterprise dissolution documents include the following documents:
a) Notice of enterprise dissolution;
b) Report on liquidation of enterprise 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).
….
Thus, 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).