Characteristics and procedures for registering dependent accounting branches

Article overview

Dependent accounting branches are a form of business expansion, making financial and operational management easier. With this branch, the parent business can focus on operating business strategies, while the branch carries out specific activities locally. Registering a dependent accounting branch helps you optimize management costs and easily meet legal requirements.

Characteristics and procedures for registering dependent accounting branches
Characteristics and procedures for registering dependent accounting branches

What is a dependent accounting branch?

A dependent accounting branch is a form of branch in which the branch does not have independent legal status and all financial activities of the branch are “included” in the general financial statements of the parent company. This means that the branch will transfer all accounting data such as revenue, expenses, documents and other financial transactions to the parent company so that the parent company can perform accounting, consolidation and financial reporting at the end of the year.

Characteristics of dependent accounting branches

A dependent accounting branch must first have the characteristics of a branch specified in Clause 1, Article 44 of the Law on Enterprises 2020, specifically as follows:

  • Dependent unit: Branch does not have independent legal status and depends on the parent company.
  • Performing the functions of the enterprise: The branch performs part or all of the functions of the parent company.
  • Authorized representative function: Branches can represent authorized by the parent company.
  • Suitable business lines: The branch’s lines of business must be consistent with the lines of business of the parent company.
  • No separate legal status: The branch cannot independently perform its legal obligations.
  • Subject to the management of the parent company: The branch must comply with the direction and management of the parent company.

In addition, dependent accounting branches also have the following characteristics:

  • There is an accounting unit that depends on the parent company
  • Data in accounting books are compiled into the parent company, so the parent company is responsible for tax and financial obligations on behalf of the branch.
Some characteristics of dependent accounting branches
Some characteristics of dependent accounting branches

Current dependent accounting branch registration procedures

Currently, a company can register a dependent accounting branch in the same province or another province, depending on the needs of that company.

Registration procedures for the dependent accounting branch will be carried out according to Article 31 of Decree 01/2021/ND-CP, as follows:

Step 1: Prepare documents

According to Clause 1, Article 31 of Decree 01/2021/ND-CP, businesses need to prepare documents after registering a dependent accounting branch.

  • Announcement of branch establishment.
  • Resolution/decision to establish a branch from the competent authorities of the parent company.
  • Copy of legal documents of the branch head.
  • Decision to establish a branch.
  • Power of attorney if the applicant is not the legal representative of the company.

Step 2: The enterprise submits an application to register the operation of a dependent accounting branch at the Business Registration Office where the branch is located.

Step 3: Update branch information to the National Database

  • Within 03 working days from the date of receiving valid documents, the Business Registration Office will issue a Certificate of Branch Registration to the enterprise and update information about the branch in the National Database on Business Registration.
  • If the dossier is not valid, the Business Registration Office will notify the enterprise in writing about the contents that need to be amended and supplemented.
Procedure for registering a dependent accounting branch
Procedure for registering a dependent accounting branch

Does a dependent accounting branch have to declare taxes?

Dependent accounting branches still have to declare taxes. Specifically, depending on each branch’s case, tax declaration will be carried out according to the following regulations:

  • A dependent accounting branch in the same province as the head office shall declare VAT at the tax authority of the head office, unless the branch has its own seal, bank account and sells goods/services, in which case the branch may declare tax separately.
  • Dependent accounting branches in different provinces from the head office declare taxes centrally at the head office and allocate tax amounts to tax authorities of the provinces where business operations are conducted.

Consulting on procedures for registering dependent accounting branches

Coming to Long Phan, you only need to provide some necessary documents, and we will assist you in carrying out quick and simple procedures. Services that Long Phan provides include:

  • Consulting on conditions for establishing dependent accounting branches.
  • Consulting and supporting the preparation of registration documents to establish a dependent accounting branch.
  • Consulting on the process of applying for a Dependent Accounting Branch Registration Certificate from the authorities.
  • Support businesses in drafting contracts related to the operations of dependent accounting branches.
  • Instructions on procedures when there are changes in branch operations, such as changes in registration information, changes in address, changes in legal representatives, etc.
  • Consulting on how to resolve disputes when disputes arise.

Long Phan brings you professional dependent accounting branch registration consulting services, saving time and costs, and helping you complete procedures quickly and effectively. For detailed advice and support, please contact the hotline: 0906735386. Let Long Phan accompany you on your business development journey, supporting all legal procedures so you can focus on your business with peace of mind.