Legal regulations on enterprises dissolution

1. Conditions for dissolution of enterprises

An enterprise can only be dissolved when it meets the following conditions:

• The enterprise pays all debts and property obligations such as: tax debt; salary arrears, severance allowance, social insurance, health insurance, unemployment insurance and other benefits of employees.

• The enterprise is not in the process of resolving disputes in court or commercial arbitration.

• Enterprises must carry out procedures for terminating the operation of branches, representative offices and business locations of the enterprise (if any) before submitting the application for enterprise dissolution.

Enterprise dissolution is a relatively complicated procedure among business registration procedures.

2. Dissolution procedures

Step 1: A resolution or decision on the dissolution is issued.

Step 2: The owner of the sole proprietorship, the Board of Members or the owner, the Board of Directors directly organizes the liquidation of the enterprise’s assets, unless the company’s charter requires establishment of a separate liquidation organization.

Step 3: The resolution or decision on dissolution and the minutes of the meeting shall be sent to the business registration authority, tax authority and the enterprise’s employees.

Step 4: Enterprises carry out procedures to fulfill tax obligations with tax authorities and pay outstanding debts and pay fines for violations (if any).

Dossier for invalidation of tax identification numbers includes:

• Application for termination of the tax identification number.

• Decision on dissolution (of the owner in the case of a private enterprise, of the owner and the Board of Members in the case of a limited liability company, of the General Meeting of Shareholders in the case of a joint-stock company).

• Report of the meeting of the Board of Members or the General Meeting of Shareholders on the dissolution of the enterprise.

• A copy of the enterprise registration certificate (ERC).

• If the enterprise has import-export activities, it must add a document certifying the fulfillment of tax obligations from the General Department of Customs.

Step 5: The enterprise shall return the seal and certificate of seal sample registration to the police agency if the enterprise uses the seal issued by the police agency.

Step 6: Submit dossier of dissolution enterprise.

3. Settlement time

Within 05 working days from the date receiving the application of dissolution enterprise, the Business Registration Office will change the legal status of the enterprise in the National Database of Business Registration to dissolution if not receiving the tax authority's refusal, and at the same time issue a notification of the dissolution of the enterprise.

4. Legal basis

Law on Enterprise 2020.