Should I choose to suspend my business or dissolve the company?

During the pandemic, complicated developments have had a significant impact on economic stability. To choose the right direction for your business at this time, you must clearly understand the nature of two forms of business suspension and business dissolution.

Legal basis for business suspension and company dissolution:

• Enterprise Law 2020.

• Consolidation document 902/VBHN-BKHDT in 2019 consolidating the Decree on business registration issued by the Ministry of Planning and Investment.

How to properly understand about business suspension and company dissolution?

Suspension of business means an enterprise suspending all business activities of the company, including: production; trade; import and export; sign a contract;…  The enterprise must notify in writing the business registration agency no later than 03 working days before the date of suspension of business or resumption of business before the notice period.

Dissolution of an enterprise is the process of ending the existence of an enterprise in the condition that the enterprise has the ability to pay or secure payment of its property obligations.

Different from suspend is to be stopped temporarily for a certain period of time; The business will then be reopened to operate as usual. Dissolution is a way to remove and terminate a legal entity.

Cases of dissolution according to the provisions of Article 207 of the Enterprise Law 2020 are as follows:

1. An enterprise is dissolved in the following cases:

End of operation term stated in the company’s charter without decision on extension;

According to resolutions and decisions of the business owner, for a private enterprise, of the Members’ Council for a partnership, of the Members’ Council, the company owner, for a limited liability company, of General Meeting of Shareholders for joint-stock companies;

The company no longer meets the minimum number of members as prescribed by this Law for a period of 06 consecutive months without carrying out procedures for transformation of enterprise type;

Certificate of enterprise registration shall be revoked, unless otherwise provided for by the Law on Tax Administration.

An enterprise may only be dissolved when it ensures payment of all debts and other property obligations and is not in the process of settling disputes at Court or Arbitration.

With this question, we advise your company to suspend business for the following reasons:

About cost:

The cost of suspending the business will always be cheaper than the cost of dissolving the company. Suspending does not mean terminating the operation; so there will be no tax closing; and obligations to the state in the implementation process. Normally, the cost of dissolving a company will be 5-10 times more expensive than suspending it.

Company existence:

While dissolution is the permanent termination of operations of a company; The suspension is just for the company to stop doing business for a while. Therefore, temporarily suspending business will be better for guests who wish to continue business in the future. Then we will have a senior company ready to operate; instead of starting a new company.

Selling company:

Selling a company is an option for many people. Currently, buying and selling the company is quite simple because many people want to buy the company to operate; participating in bids;… Suspending business will be a way to find a company transaction partner that we no longer need to use.

At the end of the business suspension period, what should the company do?

After the suspension period ends, the business does not need to make an application for re-operation, the business registration authority will change the status of your company from “Temporarily suspended” to “” The business is active”.

———————–

Contact us immediately if your business is struggling with legal issues:

• Establish a business.

• Dissolution and suspension of the company.

• Project investment certificate.

• Procedures for foreigners.

• Licensing procedure.

• Fire protection.

• Apply for a food safety license.

—————

VISION TAX AGENT AGENT JOINT STOCK COMPANY

Head office:  Floor 6 – VCCI Building, 91 Nguyen Chi Thanh, Dong Tho Ward, Thanh Hoa City

Hotline: 038982069