Enterprise dissolution is the process of terminating the activities and existence of a business organization, and at the same time marking the end of legal status and related rights and obligations in the economic market. This process is clearly mentioned in the Law on Enterprises along with relevant legal documents. Hereafter, KALF sends to customers the order, procedures and dossiers of procedures for dissolution of enterprises in Vietnam.

1. Cases of dissolution of enterprises

According to Clause 1, Article 207 of the Law on Enterprises 2020, there are the following provisions:

–     Ending the operation term stated in the company’s charter without an extension decision;

–     According to resolutions and decisions of the enterprise owner for private enterprises, of the Board of members for partnerships, of the Board of members and owners of the company for limited liability companies, of the General Meeting of Shareholders for joint-stock companies;

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

–     The enterprise registration certificate is revoked, unless otherwise provided for by the Law on Tax Administration.

2. Order and procedures for dissolution of enterprises

Pursuant to Article 208 of the Law on Enterprises 2020 as follows:

–     Approve resolutions and decisions to dissolve enterprises. A resolution or decision on dissolution of an enterprise must include the following principal contents:

·       Name and address of the head office of the enterprise;

·       Reason for dissolution;

·       Time limit and procedures for liquidation of contracts and payment of debts of enterprises;

·       Plan for handling obligations arising from labor contracts;

·       Full names and signatures of the owner of the sole proprietorship, the owner of the company, the Chairman of the Board of members, the Chairman of the Board of Directors;

–     The owner of the sole proprietorship, the Board of members or the owner of the company or the Board of Directors shall directly organize the liquidation of the enterprise’s assets, unless the company’s charter provides for the establishment of a separate liquidation organization;

–     Within 07 working days from the date of adoption, resolutions, dissolution decisions and meeting minutes must be sent to the business registration authority, tax authority and employees in the enterprise. The resolution or decision on dissolution must be posted on the National Enterprise Registration Portal and publicly posted at the head office, branch or representative office of the enterprise.

–     In case the enterprise still has unpaid financial obligations, it must enclose the resolution or decision on dissolution and the debt settlement plan to creditors, persons with relevant rights, obligations and interests. The debt settlement plan must contain the name and address of the creditor; debt amount, duration, place and method of payment of such debt; methods and time limits for settling creditors’ complaints;

The business registration authority must notify the status of the enterprise undergoing dissolution procedures on the National Enterprise Registration Portal immediately after receiving the resolution or decision on dissolution of the enterprise. Enclosed with the notice must be the resolution, dissolution decision and debt settlement plan (if any);

–     Debts of enterprises shall be paid in the following order of priority:

·       Salary arrears, severance allowances, social insurance, health insurance, unemployment insurance as prescribed by law and other benefits of employees under signed collective labor agreements and labor contracts;

·       Tax debts;

·       Other debts;

–     After the enterprise dissolution expenses and debts have been paid, the remaining amount shall be divided among the owner of the sole proprietorship, members, shareholders or owners of the company according to the proportion of ownership of the contributed capital or shares;

–     The legal representative of the enterprise shall send the enterprise dissolution dossier to the business registration authority within 05 working days from the date of payment of all debts of the enterprise;

–     After 180 days from the date of receipt of the resolution or decision on dissolution as prescribed in Clause 3 of this Article without receiving opinions on the dissolution from the enterprise or objections of the relevant parties in writing or within 05 working days from the date of receipt of the dissolution dossier, The business registration authority shall update the legal status of the enterprise on the National Enterprise Registration Database;

3. Dossier of enterprise dissolution

–     Notice of enterprise dissolution;

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

Above is the entire content of consultancy related to the order, procedures and dossiers of enterprise dissolution. In case you need support, please contact KALF for answers.