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Dissolving a company branch is an opportunity for businesses to complete necessary procedures, ensure the rights of stakeholders, and comply with legal regulations. From announcing dissolution, and liquidating assets to working with state agencies, this process, if done properly, will help businesses save time, and costs. Please follow Long Phan’s following article to understand the steps to do it effectively.
When a business decides to dissolve a branch, this process often stems from many specific reasons, including:
Change business strategy:
Branch dissolution can occur when a business decides to focus resources on markets or fields with greater potential, transform its business model, or reposition its brand. This may mean closing branches that are no longer relevant or contribute sufficiently to strategic goals.
Internal restructuring:
Branch dissolution is part of the restructuring process to optimize operations, reduce management costs and adjust the organizational structure to suit the new direction.
Ineffective business:
Branches that do not meet sales or profit expectations may need to be dissolved to avoid wasting resources, allowing the business to focus on more efficient operations.
Step 1: Submit application to terminate tax code validity
Dossier for invalidation of tax code includes:
The company prepares a dossier to terminate the validity of the above branch’s tax code and sends it to the branch’s direct management tax agency.
Within 02 working days, the tax authority will update the status on the business’s tax registration system to “Taxpayer stops operating but has not completed the procedure to deactivate the tax code”.
Within 03 working days from the date the taxpayer completes tax payment obligations such as: fully submitting declarations, reports and no tax debt, the tax authority issues a notice to the taxpayer to terminate the validity of the tax code.
Step 2: Submit application for dissolution of the Branch
Branch dissolution documents include:
Before dissolving a branch, within 10 days from the date of decision to dissolve the branch, the company must send the branch dissolution dossier to the Business Registration Office where the branch is located.
After receiving the application for termination of branch operations, the Business Registration Office sends information about the branch to the Tax Authority. Within 02 working days from the date of receiving information from the Business Registration Office, the Tax Authority will send comments on the branch’s fulfillment of tax payment obligations.
Within 05 working days from the date of receipt of the branch dissolution dossier, if no refusal is received from the Tax Authority, the Business Registration Office shall issue a notice of termination of branch operations.
When dissolving a branch, businesses need to pay attention to a number of important notes to ensure compliance with legal regulations and minimize arising risks. Points to note include:
1. Workers’ rights
2. Tax liability
3. Submit application for dissolution of branch
Submit the branch dissolution application on time, specifically within 10 days from the date of decision to terminate branch operations. Along with that, you need to prepare all the documents that we have informed above. This ensures quick branch termination and avoids penalties.
When dissolving a branch, optimizing processes and minimizing costs is what many businesses aim for. Here are ways to shorten time and save costs effectively:
1. Carefully prepare documents and procedures
2. Use online business registration service
Online service portals help businesses reduce time and become quicker and more convenient, as well as reduce administrative costs that may arise when dissolving in the traditional way.
3. Contact the business registration agency for instructions
4. Seek advice from a consultant
Long Phan provides professional services to support businesses throughout the process of branch dissolution. Specifically, Long Phan’s consulting and support services include:
With the motto “Give trust – Receive solutions”, Long Phan always strives to bring businesses high quality services, reasonable costs and quick processing processes. If you need assistance with branch dissolution, please contact us immediately via the hotline 0906735386 for advice and the most suitable solution for your business.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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