Dissolving a company, especially a large one, is a relatively complex process that requires time and adherence to the prescribed legal procedures. In Part 2, LawPlus will guide businesses on the procedures for dissolution due to the revocation of the enterprise registration certificate or a court decision.
Table of Contents/Mục lục
1. Cases of Enterprise Registration Certificate Revocation
Previously, Enterprise Law 2014 did not specifically regulate the cases of Enterprise Registration Certificate (ERC) revocation. However, the effective Law on Enterprise No. 59/2020/QH14 as of January 1, 2021 (Enterprise Law 2020) added the following cases in which an enterprise’s Certificate of Business Registration may be revoked:
- The declared information in the business registration dossier is falsified.
- The enterprise is .established by individuals prohibited from establishing a business according to the provisions in Clause 2, Article 17 of this Law.
- The enterprise ceases its business operation for one year without notifying the Business Registration Authority and the tax authority.
- The enterprise fails to submit reports as required in Point c, Clause 1, .Article 216 of this Law to the Business Registration Authority within a period of six .months from the expiry date of the reporting deadline or upon a written request.
- Other cases as determined by a court’s decision or a proposal .from an authorized agency according to the provisions of the law.
2. Procedures
For the case of dissolution due to the enterprise having its ERC revoked or under a court .decision, the dissolution of the enterprise shall be carried out according to the following procedures:
Step 1: Notify the enterprise status
The Business registration Authority must notify the status of the enterprise undergoing. dissolution procedures on the National Business Registration Portal at the same time as issuing a decision .to revoke the ERC or immediately after when receiving the .effective dissolution decision of the Court. Enclosed with the notice must be posted the decision to revoke the ERC or the decision of the Court;
Step 2: Decide dissolution
Within 10 days after receiving the decision to revoke the ERC. or the effective Court’s decision, the enterprise must convene a meeting to decide on dissolution. The decision on dissolution and a copy of the decision on revocation of the enterprise .registration certificate or the effective court decision must be sent to the business registration agency, .tax authority, and employees in the enterprise. publicly listed at the head office and branches of the enterprise. For cases that are required by law to be published in newspapers, the decision .on dissolution of the enterprise must be .published in at least one written or electronic newspaper in three consecutive issues.
Step 3: Settle all debts
In case the enterprise has unpaid financial obligations,. it must simultaneously send together with the dissolution decision of the enterprise the debt settlement plan to its creditors, persons with related interests and obligations. The notice must contain the name and address of the creditor; debt amount, term, place and method of payment of such debt; method and time limit for settling the creditor’s complaint. The enterprise’s debts are .paid in the following order:
- Debts of salary, severance allowance, social insurance as prescribed .by law and other benefits of employees under the collective labor agreement and signed labor contract;
- Tax debt;
- Other debts.
- After all debts and business dissolution expenses have been paid, the remainder shall be divided among the private business owners, members, shareholders or company owners in proportion to their ownership of contributed capital and shares.
Step 4: Propose Dissolution
The legal representative of the enterprise shall send a dissolution request to the business registration agency within 05 working days from the date of payment of all debts of the enterprise.
The dossiers for dissolute enterprise includes:
- Notice of enterprise dissolution;
- Report on liquidation of corporate assets; list of creditors and paid debts, including payment of all tax debts and social insurance premiums, employees after deciding to dissolve the enterprise (if any);
- Seal and seal sample certificate (if any);
- Business registration certificate.
A member of the Board of Directors of a joint-stock company, a member of the Members’ Council of a limited liability company, the owner of the company, the owner of a private enterprise, the director or general director, a general partner, a representative The legal representative of the enterprise is responsible for the truthfulness and accuracy of the enterprise dissolution dossier.
In case the dissolution dossier is inaccurate or forged, the persons specified above shall be jointly responsible for paying the unpaid debts, unpaid taxes and unresolved benefits of the employees and bear the responsibility of the employees. personal responsibility before the law for the consequences arising within 5 years from the date of submitting the application for dissolution of the enterprise to the business registration agency.
Step 5: Update the legal status of the business
After 180 days from the date of notification of the dissolution of the enterprise without receiving written objections from related parties or within 05 working days from the date of receipt of the dissolution dossier, the business registration agency shall: update the legal status of the enterprise on the National Database of Business Registration.
Prohibited activities since the dissolution decision
Since the decision to dissolve the enterprise is. issued, it is strictly .forbidden for the enterprise and its manager to carry out the following activities:
- Concealing or dispersing property;
- Waive or reduce the right to collect debt;
- Convert unsecured debts into debts secured by assets of the enterprise;
- Sign a new contract, except for the case of enterprise dissolution;
- Pledge, mortgage, gift or lease of property;
- Termination of performance of an effective contract;
- Raise capital in any form.
Depending on the nature and seriousness of the violation, individuals who violate the above prohibitions may be .administratively sanctioned .or examined for penal liability; If damage is .caused, compensation must be. made.
Conclusion
Withdrawal of the ERC or a decision of the Court is the case where the enterprise is .dissolved in a passive state. Accordingly, enterprises should pay attention to the order of implementation steps and official announcements; legal responsibilities for contracts, transactions, commitments to suppliers, partners; warranty liability for the goods; and the settlement of labor relations responsibilities to avoid disputes that lead to a longer and more complicated dissolution procedure.
The advice and legal provisions referenced in this article are at the time of consultation and may no longer be valid at the time readers access this article. Therefore, for detailed advice and implementation support, please contact LawPlus via email info@lawplus.vn.or phone number +84 2862 779399.
