The process of dissolving a company branch is quick and economical

Article overview

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.

Instructions on the steps to dissolve a company branch
Instructions on the steps to dissolve a company branch

There are a number of reasons why businesses need to dissolve branches

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.

The procedure for dissolving a company branch is quick and economical

Step 1: Submit application to terminate tax code validity

Dossier for invalidation of tax code includes:

  • Proposal to invalidate the branch’s tax code;
  • Decision to dissolve the branch;
  • Minutes of meeting on dissolution of the enterprise’s branch (if the branch’s managing enterprise is a two-member limited liability company or joint stock company);
  • Photocopy of business registration certificate of the branch and managing enterprise;
  • Power of attorney (if someone else submits the application on behalf of another person);
  • Official dispatch on legal responsibility after dissolution.

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:

  • Notice of dissolution (termination of operation) of the branch;
  • Decision to dissolve the branch;
  • Decision and copy of the Meeting Minutes of the Board of Members for LLCs with 2 or more members or partnerships;
  • Decision and copy of Board of Directors meeting minutes on branch dissolution for joint stock companies;
  • Notice confirming return of branch seal (if any);
  • Notice confirming completion of tax obligations for the branch;
  • Power of attorney for the applicant (if any);
  • Copy of applicant’s ID card/Passport.

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.

Procedure for dissolving of company branches in accordance with regulations
Procedure for dissolving of company branches in accordance with regulations

Note when dissolving a branch

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

  • Terminate labor contract: Enterprises need to comply with legal regulations on termination of labor contracts when dissolving branches. This includes notifying workers in advance within the prescribed time.
  • Payment of allowances and benefits: It is necessary to fully pay salaries, severance pay, social insurance and other allowances to employees in accordance with regulations. Full and timely implementation of these obligations not only helps businesses avoid disputes but also shows respect and responsibility to employees.

2. Tax liability

  • Tax declaration and settlement: Before dissolving the branch, the enterprise needs to complete its tax obligations to the tax authority. Including fully submitting relevant tax returns and performing tax finalization on time to ensure no tax debt arises after dissolution.
  • Termination of branch tax code: After completing tax obligations, it is necessary to carry out procedures to invalidate the branch tax code according to the law.

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.

Ways to shorten time and save costs when performing dissolution

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

  • Preparing necessary documents (such as dissolution decisions, financial reports, asset liquidation minutes, etc.) carefully helps avoid having to supplement or edit them multiple times, thereby reducing the time it takes to process procedures.
  • In addition, you must ensure that the necessary documents are certified, signed and stamped properly before submitting to the competent authority.

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

  • Before proceeding with dissolution, businesses should contact the business registration agency for detailed explanations of the steps, procedures, and necessary documents to avoid errors and save time on editing or supplementing later.
  • Specialized officials will support and provide detailed information about the dissolution process, helping businesses quickly complete the necessary steps.

4. Seek advice from a consultant

  • Using consulting services from experts or law firms specializing in business dissolution will help businesses fully comply with legal regulations, thereby avoiding unnecessary risks.
  • Although there may be costs of hiring experts, this will save businesses larger costs if legal disputes, complaints or other legal problems arise during the dissolution process.
Things to keep in mind to effectively and quickly dissolve a branch
Things to keep in mind to effectively and quickly dissolve a branch

Comprehensive branch dissolution service in Long Phan

Long Phan provides professional services to support businesses throughout the process of branch dissolution. Specifically, Long Phan’s consulting and support services include:

  • Advise on the dissolution roadmap in accordance with the actual situation of the branch and overall business activities.
  • Assist in preparing and drafting necessary documents and records such as dissolution decision, meeting minutes, notice of termination of operations, and related documents.
  • Support in processing employee benefits, including severance pay, payment of social insurance benefits and termination of labor contracts according to legal regulations.
  • Consulting and performing tax finalization, handling outstanding tax obligations before terminating branch operations.
  • Business representatives work directly with the business registration agency to complete dissolution procedures quickly and smoothly.
  • Support in handling liquidation of assets, debts and arising issues until procedures are completed.
  • Consulting on other related issues.

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.