The tasks to be performed when dissolving an enterprise in Vietnam

Navigating the process of dissolving an enterprise in Vietnam requires careful attention to several mandatory procedural tasks that business owners must complete to ensure legal compliance with the country’s regulatory framework. When deciding to dissolve an enterprise, owners need to carry out a series of important tasks to guarantee a lawful, transparent, and efficient dissolution process. Dissolution is not only a legal procedure but also involves handling assets, paying off debts, and fulfilling obligations to employees and state agencies. Failure to fully implement the necessary steps may result in legal or financial risks for the enterprise later on. In the article below, Viet An Law will guide you through the tasks to be performed when dissolving an enterprise in Vietnam.

What is enterprise dissolution? Cases of enterprise dissolution

Enterprise dissolution is a way to terminate the operation and existence of an enterprise or legal entity when meeting the dissolution conditions and procedures specified by law.

Based on Clause 1, Article 207 of the 2020 Enterprise Law, the cases of business dissolution include:

• The expiration of the operating term stated in the company’s charter without a decision to extend it;
• According to the resolution or decision of the owner for a private enterprise, of the Members’ Council for a partnership, of the Members’ Council or company owner for a limited liability company, of the General Meeting of Shareholders for a joint stock company;
• The enterprise no longer has the minimum number of members as prescribed for a continuous period of 06 months without carrying out procedures to convert the type of enterprise.
• The business registration certificate is revoked, unless otherwise provided.

In addition, according to regulations, an enterprise can only be dissolved when it ensures full payment of debts and other property obligations and is not in the process of resolving disputes at the Court or Arbitration.

The tasks to be performed when dissolving an enterprise in Vietnam

Step 1: Pass a resolution or decision to dissolve the enterprise

The resolution or decision to dissolve the enterprise must include the following main contents:

• Name and head office address of the enterprise.
• Reason for dissolution.
• Deadline and procedures for liquidating contracts and paying the enterprise’s debts.
• Plan for handling obligations arising from labor contracts.
• Full name and signature of the private enterprise owner, company owner, chairman of the members’ council, and chairman of the board of directors.

Step 2: Send a notice of dissolution

Within 07 working days from the date of passing the dissolution decision or resolution, the enterprise must send a notice of enterprise dissolution to the Business Registration Office where the enterprise’s head office is located.

The notification dossier includes:

• Notice of enterprise dissolution according to the form.
• Debt settlement plan (if any).

Before submitting the dossier, the enterprise must carry out the procedure to terminate the enterprise operation of branches, representative offices, and enterprise locations at the Business Registration Office where the branches, representative offices, and enterprise locations are located.

Step 3: Fulfilling tax obligations at the tax authority, customs obligations, and returning the legal entity seal

Within 01 working day from the date of receiving the notice of enterprise dissolution, the Business Registration Office must post the prescribed documents and announce the enterprise’s dissolution status on the national business registration information portal, change the legal status of the enterprise in the national business registration database to “undergoing dissolution procedures,” and send information about the enterprise’s dissolution to the Tax Authority.

After that, the enterprise needs to perform the following tasks:

• The enterprise carries out procedures to fulfill tax obligations with the Tax Authority by the Law on Tax Administration. Such as:
• Submitting a written request for enterprise dissolution to the Sub-Department of Taxation (enclosed with a notarized copy of the Business Registration Certificate and Tax Registration Certificate);
• Submitting a written request for tax finalization;
• Paying all outstanding taxes;
• Paying fines (if any).
• The enterprise proceeds to send a written request to the General Department of Customs for confirmation of customs obligations for enterprise dissolution. Within 10-15 days, the Customs Authority issues a notice on the status of the enterprise’s customs dossier.
• For enterprises using seals issued by the Police Authority, the enterprise is responsible for returning the seal and the Certificate of registered seal specimen to the Police Authority to obtain a certificate of seal revocation. In this case, the seal and the certificate of seal specimen in the enterprise dissolution dossier are replaced by the certificate of seal revocation.

Step 4: Submit the dissolution registration dossier

Within 05 working days from the date of paying off all the enterprise’s debts, the enterprise submits the enterprise dissolution registration dossier to the Business Registration Office where the enterprise’s head office is located.

The dossier includes:

• Notice of enterprise dissolution according to the form.
• Enterprise asset liquidation report; list of creditors and paid debt amounts: including payment of tax debts, social insurance, health insurance, unemployment insurance for employees after enterprise dissolution (if any);
• Seal and certificate of seal specimen (if any) or certificate of seal revocation (in case of seal registration with the Police Authority);
• Business registration certificate
• Authorization letter for the authorized representative;
• Legal personal documents of the representative (or authorized representative), including ID card/citizen ID/passport…
• Confirmation from the bank where the enterprise opened the account that the account has been closed (in case the bank account has not been opened, there is a written commitment that the account has not been opened and there are no debts at any bank or individual organization);
• Documents proving that the enterprise has published the dissolution announcement by regulations;
• Notice from the Tax Authority on the closure of the tax code (in case of no tax registration, there must be a written confirmation from the Tax Authority);
• For enterprises with branches, representative offices must submit the dissolution dossier of the branches and representative offices.

Step 5: Enterprise dissolution

• After receiving the enterprise dissolution registration dossier, the Business Registration Office sends information about the enterprise’s dissolution registration to the Tax Authority.
• Within 02 working days from the date of receiving the information from the Business Registration Office, the Tax Authority sends an opinion on the completion of the enterprise’s tax payment obligations to the Business Registration Office.
• Within 05 working days from the date of receiving the enterprise dissolution registration dossier, the Business Registration Office changes the legal status of the enterprise in the national business registration database to “dissolved” if it does not receive a refusal opinion from the Tax Authority, and issues a notice of the enterprise’s dissolution.

Prohibited activities from the enterprise’s dissolution decision

Article 211 of the 2020 Enterprise Law stipulates that from the time of the enterprise’s dissolution decision, the enterprise and its managers are strictly prohibited from performing the following activities:

• Concealing or disposing of assets;
• Abandoning or reducing debt claims;
• Converting unsecured debts into secured debts with the enterprise’s assets;
• Signing new contracts except to carry out the enterprise’s dissolution;
• Pledging, mortgaging, donating, or leasing assets;
• Terminating the performance of effective contracts;
• Raising capital in any form.

Priority order for debt payment upon enterprise dissolution

The enterprise’s debts are paid in the order of priority specified in Clause 5, Article 208 of the Enterprise Law 2020 as follows:

• Salary debts, severance allowances, social insurance, health insurance, unemployment insurance as prescribed by law, and other employee benefits under collective labor agreements and signed labor contracts;
• Tax debts;
• Other debts;

After paying the enterprise’s dissolution expenses and debts, the remaining amount is distributed to the private enterprise owner, members, shareholders, or owner in proportion to their ownership of contributed capital or shares;

The above is the information shared by Viet An Law with clients regarding the tasks to be performed when dissolving an enterprise in Vietnam. Clients with related questions or legal support needs, please contact Viet An Law for the best assistance.