DISSOLUTION OF ENTERPRISES
According to the Enterprise Law 2014, procedures for dissolution of enterprises are conducted in the following cases:
– The operation duration stated in the company charter expires and there is no decision to extend it;
– As decided by the enterprise owner, for a private enterprise; by all general partners, for a partnership; by the Members’ Council or the company owner, for a limited liability company; or by the General Meeting of Shareholders, for a joint stock company;
– The company no longer has the minimum number of members provided in this Law for 6 consecutive months without carrying out the procedures for the conversion of the form of enterprise;
Order and procedures for dissolution of enterprises:
– A decision on dissolution of an enterprise shall be approved: Such decision must have the following principal details:
+ Name and head office address of the enterprise;
+ Reasons for dissolution;
+ Time limit and procedures for liquidating contracts and paying debts of the enterprise; the time limit for paying debts and liquidating contracts must not exceed 6 months from the date of approval of the dissolution decision;
+ Plan for dealing with obligations arising from labor contracts;
+ Full name and signature of the at-law representative of the enterprise.
– The liquidation of assets of the enterprise: The owner of a private enterprise, the Members’ Council or company owner or the Board of Directors shall directly organize the liquidation of assets of the enterprise, unless the establishment of a separate liquidation organization is provided by the company charter.
– Within 7 working days after being approved, the dissolution decision and the meeting minutes shall be sent to the business registration agency, the tax agency and employees in the enterprise. The decision on enterprise dissolution shall be posted on the National Enterprise Registration Portal and publicly displayed at the head office, branches and representative offices of the enterprise.
– If the enterprise has outstanding financial obligations, a debt settlement plan shall be sent together with the dissolution decision to the creditors and persons with related interests and obligations. The plan must include the name and address of the creditor; the debt amount, time limit, location and method of payment of such debt; the method and the time limit for settling complaints of the creditor.
– The business registration agency shall notify the situation of the enterprises that are carrying out the dissolution procedures on the National Enterprise Registration Portal immediately after receiving the decisions on the dissolution of the enterprises. Apart from the notification, the dissolution decision and debt settlement plan, if any, shall be posted.
Debts of the enterprise shall be settled in the following order:
- Unpaid amounts of wages, retrenchment allowances and social insurance premiums in accordance with law and other benefits of employees pursuant to the signed collective labor agreements and labor contracts;
- Outstanding tax;
- Other debts.
After paying all debts and costs of the dissolution of the enterprise, the remainder shall be divided to the owner of the private enterprise, among members and shareholders, or to the company owner in proportion to their capital contribution or share ownership ratios.
The at-law representative of the enterprise shall send a request for dissolution to the business registration agency within 5 working days after all debts of the enterprise are fully paid.
Procedures of enterprises dissolution:
Step 1: Disclose dissolution information of an enterprise
Enterprises must publicly posted decision on enterprise dissolution at its head office and branches and publish this decision on the National Enterprise Registration Portal.
Step 2: Confirm the obligations at the customs office
After completing step 1, the enterprise will send an official dispatch to the General Department of Customs to confirm the customs obligations to dissolve the enterprise. Within 10-15 days the customs office will issue a notice of the status of the enterprise’s customs file.
Step 3: Procedures at the Tax Office
– Send a written request for dissolution to the Tax Department (enclosed with the notarized copy of the business registration certificate and tax registration certificate);
– Send an application for settlement of tax liability;
– Close the taxes owed;
– Pay fines (if any);
After obtaining tax debt certification from the Sub-departments of Taxation where the enterprise is located, the Tax Office decides to close enterprise tax codes.
Step 4: Procedures at the Business Registration Office
After receiving the decision to close tax codes, the enterprise will send the dossier to the Business Registration Office. It will issue a receipt of dissolution.
Step 5: Pay legal company seal
After receiving a receipt of dissolution from the Business Registration Office, the enterprise will send the dossier of paying legal company seal to the provincial-level police.
Step 6: Pay the Business Registration Certificate
The provincial-level police will make decision on cancelling the seal use value. The enterprise will send the decision on cancelling the seal use value to the Business Registration Office and wait for the final dissolution decision. (The Business Registration Office will decide to delete the enterprise’s name in order to complete dissolution procedures.).
A dissolution dossier of an enterprise includes:
Clause 1, Article 204 of Enterprise Law 2014 stipulates a dissolution dossier of an enterprise includes:
– A notification of the enterprise dissolution;
– A report on liquidation of the enterprise’s assets; a list of creditors and paid debts, including tax debts, outstanding social insurance contributions, and debts owed to employees after deciding the dissolution (if any);
– The seal and seal certificate (if any);
– The Certificate of Business registration.
Documents that enterprises need prepare:
– A notification of tax code disclosure;
– A notification of the enterprise dissolution;
– Confirmation of completion of customs procedures;
– Confirmation of bank account disclosure/ or commitments to not open any bank account before;
– The business registration certificate (original);
– Seal registration (original);
– Legal company’s seal;
– Dissolution dossier (Based on the information provided by enterprises, Siglaw will directly prepare a dissolution dossier and then transfer to enterprises to sign.)