CASES OF AND CONDITIONS FOR SHUTTING DOWN AND DISSOLUTION OF ENTERPRISES AND BRANCHES IN VIETNAM

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Shutdown and dissolution is legal procedures to terminate the existing of an enterprise under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the GMS (for joint stock companies);

Shutdown and dissolution an enterprise is more and more complicated than procedures of registration for establishment, management, reorganization, and shall be followed the conditions and procedures:

CASES OF AND CONDITIONS FOR

SHUTTING DOWN AND DISSOLUTION OF ENTERPRISES

An enterprise shall be shutdown and dissolved in the following cases:

The operating period specified in the company’s charter expires without an extension decision;
The enterprise is dissolved under a resolution or decision of the owner (for sole proprietorships), the Board of Partners (for partnerships), the Board of Members and the owner (for limited liability companies) or the GMS (for joint stock companies);
The enterprise fails to maintain the adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business;
The Certificate of Enterprise Registration is revoked, unless otherwise prescribed by the Law on Tax administration.

Conditions for enterprise Shutdown and dissolution :

An enterprise may only be dissolved after all of its debts and liabilities are fully paid and it is not involved in any dispute at the court or arbitration.
Relevant executives and the enterprise in cases of the Certificate of Enterprise Registration is revoked are jointly responsible for the enterprise’s debts.

SHUTTING DOWN AND DISSOLUTION BRANCHES, REPRESENTATIVE OFFICES AND BUSINESS LOCATIONS

Shutdown of branches, representative offices, business locations of an enterprise shall be decided by the enterprise or under a decision to revoke the certificate of branch/representative office registration issued by a competent authority.
The enterprise’s legal representative and the head of the branch/representative office that is shut down shall be jointly responsible for the accuracy and truthfulness of the application for shutdown of the branch/representative office/business location.
The enterprise whose branch is shut down shall execute the contracts and pay the debts, including tax debts, of the branch and continue employing or fully provide lawful benefits for the branch’s employees as prescribed by law.

One of the most challenged procedures in shutdown and dissolution of an enterprise in Vietnam is tax inspection, tax settlement and tax completion certificate prior to the final step at the licensing department.

The enterprise keeps accounting records in accordance with accounting laws, tax reports, lawful invoices for investments, revenues, expenses during its operation and ready to prove for any tax obligation and fully pay tax arrears upon tax inspection decisions.

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