THE BUSINESS SUSPENSION PROCEDURE

Decree no. 01/2021/ND-CP stipulates the business registration, defining the word business suspension is one of the legal status, according to clause 1 article 41 of this Decree, in which stipulating “Business suspension is legal status of a business which is carrying on the business suspension procedure in accordance with clause 1 article 206 of the 2020 Law on enterprise. The date transfers the legal status “business suspension” is the date that company starting to register for business suspension. The date terminates the legal statute of business suspension is the date that company terminating the business suspension term the company have already notified before or the date that the company continues to work before the date of suspension business they had notified”.

In the past, the 2014 Law on Enterprise stipulates that the company shall notice to the business registration agency at least 15 days before the day of business suspension or the day of continuing the business, whereas the 2020 Law on Enterprise has changed the term at least 03 working days. According to that, the Decree no. 01/2020/ND-CP stipulates the business registration also having some regulations according to the new law of business suspension procedure.

By this Article, KAV Lawyers will give some information about the procedure of implementing business suspension for company in accordance with the regulation of the new Law on Enterprise and the new Decree.

The company should keep in mind the compulsory situations in which company shall suspend or terminate the business according to law:

  • The company does not fully satisfy the conditions for doing business in restricted business lines;
  • Relevant authorities request the suspension in accordance with regulations of law on tax administration, environment and relevant laws;
  • Under a court decision.

In order to implement this procedure, the company should follow these steps:

Step 1: Preparing the dossier

In order to register for business suspension, the company should prepare these documents:

  • A notification of suspension of the business;
  • A legitimate copy of the minutes of meeting of the Board of members (if the enterprise is a multi-member limited liability company; partnership); a legitimate copy of the minutes of meeting of the Board of Directors (if the enterprise is a joint-stock company);
  • Decision of the Board of Directors (if the enterprise is a joint-stock company); decision of the Board of members (if the enterprise is a multi-member limited liability company; partnership); decision of the company’s owner (if the enterprise is a single-member limited liability company) about the business suspension.
  • The attorney power (in case of authority representative);

Step 2: Submitting the dossier

  • Legal representative of the enterprise/ legally authorized person after preparing 01 dossier, shall contact to the Business Registration Office, where the enterprise located to hand-out the dossier or shall apply online.
  • The applicant receives the receipt from the Business Registration Office, in the receipt will have an appointment to return the result, the applicant will base on this appointment go to the Business Registration Office to get the certificate.

Step 3: Receiving the result

  • After considering the validity of the dossier, if the dossier is valid, the Business Registration Office shall issue a certificate of business suspension of the enterprise within 03 working days from the date of receiving the valid dossier.
  • After that the Business Registration Office will update the legal status of the enterprise in the data of national business registration become business suspension status.

Step 4: Notifying with tax agency

Enterprises are organizations and individuals operating with business registration at the Business Registration Office, operating under the Enterprise Law, do not need to notify the suspension of operation or business to the tax office before suspending their operation or business. The others do not need to implement business registration shall notify the business suspension to tax office before terminating their business (article 4 decree 126/ND-CP dated on 19/10/2020).

Noted:

  • In case the enterprise would like to continue the suspension after the expiration of the notification, it must notify the Business Registration Office at least 03 working days before the date on which the enterprise continues to suspend.
  • The suspension period of each notice must not exceed one year.
  • The licensing fee is exempted if: it is required to send a written application for suspension business to tax office before the expiration of fee payment (30/1 annually) and has not paid the fee for the year of application for suspension business (Clause 5, Article 4 of Decree No. 139/2016/ND-CP, amended and supplemented by Decree 22/2020/ND-CP).

Above is an article about the business suspension procedure, if you have any questions or any other legal advice, please contact KAV Lawyers by the contacts below:

Email: [email protected] or [email protected]

Phone: (+84) 28 6270 7075 or (+84) 949 761 861

KAV Lawyers – A notable law firm, it is a pleasure to serve you.

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