Temporarily suspending the operation of a representative office of a limited liability company

Temporarily suspending the operation of a representative office of a limited liability company is a strategic solution that helps businesses optimize operating costs, restructure business activities and focus resources on key market areas. The following article Long Phan Consulting Company will analyze in detail the issues related to procedures for temporarily suspending the operation of a representative office of a limited liability company.

In which cases is temporarily suspending the operation of a representative office of a limited liability company permitted?

A representative office is a dependent unit of an enterprise, specified in Clause 2, Article 44, Law on Enterprises 2020. This is a unit that has no business purpose or generates direct revenue. The representative office has the function of authorized representative for the interests of the limited liability company and protects those interests.

A LLC can decide to temporarily suspend representative office operations in many different cases. Common reasons include:

• Business situation is difficult;
• Organizational restructuring;
• The representative office has completed its set goals.

Temporary suspension of representative office operations must be notified in advance to the business registration agency. Pursuant to Clause 1, Article 66, Decree 01/2021/ND-CP, enterprises must send a notice at least 03 working days before the date of temporary suspension of operations.

In practice, many businesses choose to temporarily suspend representative office operations instead of completely terminating them to maintain a legal presence in the market. This provides a strategic advantage when businesses plan to restore operations in the future, while minimizing operating costs during the temporary shutdown period.

Application dossier for temporarily suspending the operation of a representative office of a limited liability company

Documents for temporarily suspending the operation of a representative office of a limited liability company need to be prepared fully and accurately. According to Article 66, Decree No. 01/2021/ND-CP, the dossier for temporary suspension of representative office operations includes the following documents:

• Notice of temporary suspension of representative office operations according to the prescribed form (Appendix II-21 issued with Circular No. 01/2021/TT-BKHDT). The notice must clearly state the time of suspension and the time of resumption of operation of the representative office;
• Decision of the owner of the limited liability company on temporary suspension of representative office operations, clearly stating the reason for suspension and expected time of suspension;
• In case the person performing the procedure is not the legal representative of the enterprise, a valid authorization document must be added along with a copy of the valid Citizen Identification Card, Identity Card or Passport of the authorized person.

Note: Information about the representative office and the managing LLC must be accurate, complete and consistent with the business registration documents saved at the business registration agency. The seal and signature of the legal representative or authorized person must be clear and valid.

Procedure for temporarily suspending the operation of a representative office of a limited liability company

The order for implementing procedures for temporarily suspending the operation of a representative office of a limited liability company is specified in detail in Article 66, Decree 01/2021/ND-CP.

Specifically, perform the following steps:

Step 1: Prepare and submit application

Submitting an application to temporarily suspend representative office operations can be done by one of the following three methods:

• Submit directly to the One-Stop Department of the Business Registration Office under the Department of Planning and Investment of the province/city where the representative office is located.
• Send documents via postal service to the address of the Business Registration Office.
• Submit your application online through the National Business Registration Portal at address https://dangkykinhdoanh.gov.vn.

Currently, state management agencies encourage businesses to use online application submission methods to save time and costs. When submitting an application online, businesses will receive a file number to track the progress of the application.

Step 2: Review and resolve

Within 03 working days from the date of receiving the application, the Business Registration Office will review the validity of the application and provide feedback to the business:

• In case the dossier is complete and valid: the Business Registration Office will issue a Certificate of temporary suspension of representative office operations.
• In case the dossier is incomplete or invalid: the Business Registration Office will notify you in writing, clearly stating the content that needs to be amended or supplemented and the deadline for implementation.

Step 3: Get results

Businesses can choose one of the following methods of receiving results:

• Receive directly at the One-Stop Department of the Business Registration Office. When coming to receive results, the recipient needs to bring their receipt and identification documents. If the recipient of the results is an authorized person, a valid authorization document must be presented.
• Receive results via postal service. Enterprises need to register information about receiving documents on the delivery service website of the Department of Planning and Investment where the representative office is located.
• Receive results online through the National Business Registration Portal (applicable to online application submission).

After receiving confirmation of temporary suspension of representative office operations, businesses need to store this document carefully to present when necessary, especially when working with tax authorities and other state management agencies.

Issues to note before and after temporarily suspending the operation of a representative office of a limited liability company

The process of temporarily suspending the operation of a representative office of a limited liability company requires businesses to pay attention to many legal and practical issues. Experience from businesses that have implemented this procedure shows that careful preparation before and after suspension is the deciding factor in the success of the process.

First, note before suspending operations:

Before proceeding with procedures to temporarily suspend representative office operations, businesses need to perform the following tasks:

• Review and liquidate ongoing contracts between representative offices and partners and customers to avoid disputes.
• Notify partners and customers about the temporary suspension of representative office operations, and provide alternative contact information during the suspension period.
• Resolve issues related to employees working at representative offices in accordance with the provisions of the Labor Code.
• Notify relevant specialized management agencies about temporary suspension of operations (if any).

Second, note after temporary shutdown:

After receiving confirmation of temporary suspension of representative office operations, businesses should note:

• The maximum period of temporary suspension of representative office operations is 01 year as prescribed in Clause 1, Article 66, Decree 01/2021/ND-CP. If there is a need to continue the suspension after this period, the enterprise must carry out extension procedures.
• During the temporary shutdown, representative offices are not allowed to conduct any business activities. All civil and commercial transactions on behalf of the company must be carried out by the head office or other dependent units.
• Each representative office needs to have a separate record of temporary suspension of operations. Enterprises cannot combine multiple representative offices into one set of documents, because each unit has its own internal code on the business registration agency’s system.
• In case you want to continue operating before the registered temporary suspension period, the enterprise must notify the Business Registration Office at least 03 working days before resuming operations.

>>> See more: Salary, insurance, and labor consulting services for representative offices.

Consulting services on procedures for temporarily suspending the operation of a representative office of a limited liability company at Long Phan Consulting Company

Long Phan Consulting Company provides comprehensive consulting services on procedures for temporarily suspending the operation of a representative office of a limited liability company. With a team of experienced specialists, we support businesses in carrying out procedures quickly, accurately and effectively.

Long Phan Consulting Company’s full service includes:

• In-depth consulting on issues related to temporary suspension of representative office operations, helping businesses understand their legal rights and obligations;
• Support in preparing documents for temporary suspension of representative office operations in accordance with legal regulations, ensuring validity and completeness;
• Enterprise representatives submit documents and monitor progress at the Business Registration Office;
• Support businesses to resolve problems that arise during the temporary suspension of representative office operations;
• Consulting on legal issues arising after temporary suspension of representative office operations.

Using consulting services helps businesses save time, resources and avoid risks that may arise.

Frequently asked questions

Below are frequently asked questions about procedures for suspending operations of representative offices of One Member Limited Liability Company.

How long does it take for the Business Registration Office to process a representative office suspension application?

The Business Registration Office will review the validity of the application and respond to the business within 03 working days from the date of receipt.

What is the maximum period of temporary suspension of operations of a representative office?

The temporary suspension of operation of a representative office must not exceed 01 year.

Does the company need to notify the tax authority about the temporary suspension of representative office operations?

Yes, businesses need to make tax finalization with the managing tax agency before suspending the operation of the representative office.

Are representative offices allowed to conduct business during the suspension period?

No, during the suspension period, representative offices are not allowed to conduct any business activities.

If the company wants to continue operating before the registered deadline, what procedures does the company need to follow?

Enterprises must notify the Business Registration Office in writing at least 03 working days before they want to resume operations.

Can the application for temporary suspension of operations be submitted to multiple representative offices?

No, each representative office needs a separate set of temporary shutdown documents.

What documents are needed in the authorization document when the applicant is not the legal representative?

A valid authorization document must be accompanied by a copy of the valid Citizen Identification Card, Identity Card or Passport of the authorized person.

Conclude

Temporarily suspending the operation of a representative office of a limited liability company is an important procedure that requires businesses to strictly comply with regulations. Customers need to pay special attention to the notification period, necessary documents and legal obligations before, during and after the suspension. To receive professional support regarding this procedure, please contact Long Phan Consulting Company immediately via the hotline: 1900636389 to receive comprehensive and timely solutions.