Dissolution

Dissolution is an option chosen by many enterprises to terminate business operations when encountering insurmountable difficulties. However, this is a rather complicated procedure that must be carried out at many competent state authorities, especially regarding tax finalization and tax code termination.

I. Legal regulations that enterprises need to pay attention to:

1. Enterprises can only be dissolved when they ensure full payment of debts and other property obligations and are not in the process of resolving disputes at Court or Arbitration. The relevant manager and the enterprise whose Enterprise Registration Certificate is revoked must be jointly responsible for the enterprise's debts unless otherwise specified.

Before applying for dissolution registration, the enterprise shall carry out procedures to terminate the operation of its branch, representative office, or business location at the Business Registration Office where the branch, representative office, or business location (if any) is located.

2. Dissolution shall be approved by the owner for a one-member limited liability company, by the Board of Members for a limited liability company with two or more members, or for a partnership company or a General Meeting of Shareholders for joint stock companies.

3. Within 07 working days from the date of approval, the dissolution resolution or decision, and meeting minutes shall be sent to the business registration authority, tax authority, and enterprise’s employees and posted on the National Business Registration Portal and publicly listed at the enterprise's headquarters, branches, and representative offices.

In case the enterprise has unpaid financial obligations, it shall attach a debt settlement plan to creditors, people with related rights, obligations, and interests. The debt settlement plan shall include the name and address of the creditor; debt amount, term, location, and method of payment of that debt; method and time limit for settling creditors' complaints.

4. Enterprise debts are paid in the following order of priority:

a) Salary arrears, severance pay, social insurance, health insurance, unemployment insurance as prescribed by law and other employee benefits according to the collective labor agreement and labor contract signed;

b) Tax debt;

c) Other debts.

II. Procedures enterprise needs to follow:

1. Carry out procedures to request confirmation of tax obligation completion at the Customs authority if the enterprise has import-export activities.

2. Carry out procedures to request confirmation of completion of tax obligations and invalidation of tax code at the Tax authority.

3. Carry out procedures to return the seal and seal sample certificate to the Police authority if the enterprise uses a seal issued by the Police authority.

4. Carry out dissolution procedures at the Department of Planning and Investment.

III. Documents need to be prepared:

1. Notice of enterprise dissolution;

2. Resolutions or decisions, and meeting minutes of the Board of Members for limited liability companies with two or more members, for partnerships, or of the General Meeting of Shareholders for joint stock companies; Resolutions or decisions of the company owner for single-member limited liability companies on enterprise dissolution;

3. Debt settlement plan (if any);

4. 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 enterprise (if any);

5. Seal and seal sample certificate (if any);

6. Enterprise Registration Certificate.

7. Accounting books and documents.

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