Guide to the most detailed company dissolution procedures

Company dissolution is a business administrative procedure. This is the procedure to terminate the legal status and operations of the enterprise. To carry out the dissolution procedure, the company must fulfill its obligations regarding taxes, finances, etc. The sequence, procedures for dissolving a company ensure compliance with business laws and other guiding documents. The following article by Long Phan will specifically guide the procedures for dissolving a company.

What is company dissolution?

Company dissolution, also known as company closure, is the termination of activities and legal status of the company. A business undergoes dissolution when it no longer has the conditions or capacity to operate and conduct its affairs. The company must undergo a series of legal procedures to terminate its activities, as well as its related rights and obligations.

Cases of company dissolution

Based on the provisions of Article 207 of the 2020 Law on Enterprises, companies shall be dissolved under specific circumstances and conditions as follows:

• The operating period specified in the company’s charter expires without an extension decision
• The enterprise is dissolved under a resolution or decision of the owner
• The adequate number of members prescribed in this Law for 06 consecutive months without converting into another type of business
• Revocation of the business license.
• All of its debts and liabilities are fully paid

The sequence and procedures for dissolution of an enterprise

Application for dissolution

Pursuant to Article 210 of the Law on Enterprises 2020, an application for dissolution of an enterprise include:

• The notification of the enterprise’s dissolution;
• The report on liquidation of the enterprise’s assets
• List of creditors and settled debts.

The accuracy and validity of the enterprise dissolution documents are ensured by the following components:

• The honesty of the documents by the board of management members (for joint-stock companies), board of members (for limited liability companies), company owners, private business owners, directors, general directors, authorized representatives under the law of the enterprise.
• In cases where the dissolution documents are inaccurate, falsely stated by the parties specified in Clause 2 of Article 210 of the Law on Enterprises 2020, they shall be jointly responsible for settling the rights of unresolved employees along with unpaid taxes, outstanding debts, and personal legal responsibility for consequences arising within 05 years from the date of submission of the company dissolution documents.

The fee for company dissolution:

Based on Article 5 of Circular 47/2019/TT-BTC regulating the objects exempted from fees, specific fees are as follows:

• Companies supplementing, changing information due to changes in administrative boundaries.
• Companies registering for dissolution, suspending business, terminating branch, representative office activities, business location.
• Companies registering business online.
• State agencies requesting information for state management.
• Small and medium-sized enterprises converting business households.

Therefore, according to Article 5 of Circular 47/2019/TT-BTC, in cases of company dissolution exempted from fees, dissolution fees are exempted.

Dissolution procedures:

The procedures for company dissolution are regulated in Article 208 of the Law Enterprises 2020 and Article 70 of Decree 01/2021/NĐ-CP as follows:

Step 1: Within 07 working days from the day on which the resolution or decision on dissolution, the enterprise shall send a notification on dissolution to the Business Registration Office of province where it is headquartered

Step 2: 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 status of the enterprise undergoing dissolution procedures on the National Business Registration Portal.
• Transfer the legal status of the enterprise in the National Business Registration Database from the current status to undergoing dissolution status.
• Send company dissolution information to the tax authority..

The enterprise shall fulfill tax obligations with the tax authority as prescribed by tax management law.

Step 3: Within 05 working days from the day on which the enterprise’s debts are fully paid, the enterprise shall submit an application for dissolution to the Business Registration Office of province where it is headquartered

Step 4: After receiving the application for dissolution, the Business Registration Office shall send information about the dissolved enterprise to the tax authority. Within 02 working days from receipt of information from the Business Registration Office, the tax authority shall give its opinions about the enterprise’s fulfillment of tax liabilities to the Business Registration Office

Step 5: Within 05 working days from the receipt of the application for dissolution, the Business Registration Office shall change the enterprise’s legal status on the National Enterprise Registration Database into “dissolved” if the tax authority has no objection, and issue a notification of the enterprise’s dissolution.

After 180 days from the receipt of the notification of dissolution, enclosed with the resolution or decision on dissolution, if the Business Registration Office does not receive the application for dissolution from the enterprise and receives no written objections from relevant parties, it shall change the enterprise’s legal status on the National Enterprise Registration Database into “dissolved”. Thus, if an enterprise wants to dissolve, it needs to follow the prescribed sequence and procedures.

Authority to handle dissolution procedures:

According to Article 216 of the 2020 Enterprise Law, Articles 14 and 15 of Decree 01/2021/NĐ-CP, the Business Registration Office – Department of Planning and Investment where the enterprise’s main office is located has the authority to handle enterprise dissolution procedures.

Processing time:

The usual time to complete company dissolution procedures is around 7 – 10 working days. In case of errors, requests for amendments, supplements, the time to complete procedures at the Business Registration Office – Department of Planning and Investment may be longer depending on specific cases.

Consulting on company dissolution procedures:

To support in guiding company dissolution procedures, consulting services at Long Phan focus on the following issues:

• Advising on the necessary legal procedures for company dissolution.
• Assisting in completing documents as required by current laws.
• Providing advice on processing time, authority to decide on company dissolution.
• Providing continuous support and advice throughout the dissolution process until completion.
• Contacting and carrying out company dissolution procedures.

Additionally, depending on the customer’s needs and practical situation, we can provide other related services regarding company dissolution flexibly and accurately.

Therefore, enterprises needing to carry out dissolution procedures should carefully study the documents and procedures mentioned above. Nowadays, dissolution procedures can be carried out online, making it more convenient for enterprises. If you have any further questions or need in-depth consultation, please contact 0906.735.386.