Terminating the operation of an LLC branch

Article overview

Terminating the operation of an LLC branch is an important legal procedure. This requires businesses to fully comply with the legal procedures. To ensure the termination process goes smoothly and according to regulations, businesses need to prepare complete termination documents and follow the prescribed steps. In this article, Long Phan will guide customers in detail step by step through the procedures for terminating branch operations.

Procedures for terminating the operation of an LLC branch
Procedures for terminating the operation of an LLC branch

Cases of terminating the operation of an LLC branch

According to Article 213 of the Law on Enterprises 2020, a branch of a limited company will terminate its operations in the following cases:

Case 1: The branch is terminated according to the decision of the enterprise itself.

Case 2: The branch terminates its operations according to the decision to revoke the Branch Operation Registration Certificate of the competent authority. Specifically, according to the provisions of Article 212 of the Law on Enterprises 2020, a branch may have its business license revoked in the following cases:

  • The content declared in the branch registration application is fake;
  • The branch ceases business operations for 01 year without notifying the Business Registration Authority and the tax authority;
  • The court or competent agency issues a termination decision according to the provisions of law.

Procedures for terminating the operation of an LLC branch

Documents need to be prepared

According to Article 72 of Decree 01/2021/ND-CP, the dossier for termination of branch operations includes the following documents:

  • Notice of termination of branch operations;
  • Resolutions, decisions and copies of meeting minutes of the Board of Members for limited liability companies with two or more members, partnerships, and of the Board of Directors for joint stock companies on termination branch operations;
  • Resolution and decision of the company owner for a one-member limited liability company on termination of branch operations;
  • Power of attorney for the person performing the procedure (if any);
  • Copy of personal legal documents for the authorized person (if any).

In addition, businesses need to prepare documents for tax code termination including the following documents:

  • Notice of request for invalidation of tax code;
  • Original tax registration certificate or explanation for loss of paper;
  • Decision to terminate branch operations or decision to revoke the operating registration certificate.

Legal basis: Article 14 of Circular 105/2020/TT-BTC

Download notification form requesting tax code termination: Here

Procedure for terminating the operation of an LLC branch
Procedure for terminating the operation of an LLC branch

Steps to terminate branch operations

The process of terminating the operation of a limited liability company branch as prescribed in Article 72 of Decree 01/2021/ND-CP includes the following basic steps:

Step 1: Complete tax obligations and submit tax code termination documents to the tax authority.

Step 2: Prepare and submit documents to terminate branch operations at the Business Registration Office.

Step 3: Within 02 working days from the date of receiving the dossier, the Business Registration Office coordinates with the tax authority to confirm the tax status of the branch.

Step 4: Within 5 working days from the date of receiving the dossier, if no refusal is received from the Tax Authority, the Business Registration Office will terminate the branch’s operations in the Database. The country of business registration issues a notice on the termination of branch operations.

Legal issues to keep in mind when closing a branch

Enterprises need to pay attention to legal issues when closing branches according to regulations to avoid legal risks. Specifically:

  • First, the enterprise must carry out procedures to terminate branch operations within 10 days from the decision to terminate branch operations.
  • Second, completing tax obligations is a mandatory requirement. Enterprises must fully pay tax debts before terminating branch operations.
  • Third, resolve employee rights according to the Labor Code. Enterprises need to comply with regulations on termination of labor contracts. Social insurance, health insurance, and unemployment insurance regimes must be handled according to regulations.
  • Fourth, handle the branch’s assets and debts according to the Enterprise Law. Enterprises must liquidate contracts and transactions of branches. The transfer of assets, rights and obligations to the parent company must be carried out in accordance with the legal process.

Consulting services on branch termination

With the purpose of supporting customers to carry out procedures to quickly and effectively terminate the operation of a limited liability company branch, Long Phan provides professional branch operation termination consulting services. This service includes:

  • Analyze the specific situation of the branch;
  • Proposing appropriate plans to terminate operations;
  • Support the implementation of legal procedures according to the correct process;
  • Instructions on preparing documents and drafting documents according to the form;
  • Representing customers to submit documents and monitor the processing progress at the competent authorities;
  • Consulting on solving problems that arise during the termination of operations.
Consulting on terminating the operation of an LLC branch
Consulting on terminating the operation of an LLC branch

To ensure that the process of terminating the operation of an LLC branch is carried out quickly and effectively, customers can choose to use Long Phan’s professional consulting services. Please contact hotline 090.673.5386 immediately to receive detailed advice from experts with extensive experience in the field of corporate law.