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Business suspension procedure

17/01/2021

What is business suspension?

Business suspension is an activity that an enterprise will suspend its business for a certain period of time for various reasons such as having difficulty in business and unable to continue business or need time to rearrange work.

There are many reasons for the company to lead to suspend operations, but most of them are facing financial, labour difficulties, ... etc., forcing the owner to conduct procedures for business suspension.

Based on the legal basis of Article 206 of the Enterprise Law 2020 and Decree 78/2015 / ND-CP on business registration, Khoa Tin Law Firm will present all issues relating to business suspension:

How is the business suspension procedure?

Step 1: Prepare dossier for business suspension

Individuals, organizations: Drafting dossier, documents according to regulations (information about specific profiles, people can see below). Dossier of business suspension have an important part that is the reason for suspending business, businesses usually use the reason as financial difficulties and cannot continue to operate.

Step 2: Submit the application for temporary business suspension to the Department of Planning and Investment

After completing the preparation of the dossier for business suspension, individuals and organizations shall submit online to the Department of Planning and Investment of the province / city registering the head office of the business.

Step 3: Receive and verify dossiers of temporary business suspension

The Business Registration Office will process the dossier, consult relevant agencies (if necessary) during the process and completing the result of handling dossier and update the status of the dossier on the online database.

Step 4: Receive notification of business suspension

In case the dossier needs to be modified or supplemented, the enterprise will modify or supplement the dossier acorrding to the request of the governmental body.

Note: The procedure for temporary business suspension of the company only needs to be submitted at the Department of Planning and Investment and is NOT required to be filed at the tax-managing agency of the enterprise.

Step 5: Officially suspend the company's business

After receiving the notice of business suspension, the enterprise will suspend from the time stated on the notice, all business activities after the date of suspension must be stopped, the enterprise will be allowed to resume operation after the suspension period expires or request for reopening sooner before the expiration of suspension period.

Which legal documents are included in business suspension dossier?

Preparing documents assessed by individuals and organizations is the most difficult step in the business suspension procedure. Because the dossier must ensure absolute accuracy, and each type of business (JSC, company limited, partnership ...) has different requirements. Meanwhile, information about dossier on the internet is quite confused, each website has its own information. That is reason why people get panic, worry when they research and prepare dossier.

Information on dossiers of business suspension is specified clearly in Decree 78/2015 / ND-CP. Khoa Tin Law Firm will re-present for readers to understand clearly.

Dossier of temporary business suspension of multiple-member company limited:

- 1 Notice of business suspension (according to the prescribed form)

- 1 Decision and a copy of the minutes of the meeting of the Board of Members on the suspension of the business

- 1 Power of attorney (if the individual or organization uses the services of an external entity)

Dossier of temporary business suspension of single-member company limited

- 1 Notice of business suspension (according to the prescribed form)

- 1 Decision of the company owner on the suspension

- 1 Power of attorney (if the individual or organization uses the services of an external entity)

Dossier of temporary business suspension of  joint stock company

- 1 Notice of business suspension (according to the prescribed form)

- 1 Decision and a copy of the minutes of the meeting of the Board of Directors on the suspension;

- 1 Power of attorney / authorization contract (if the individual or organization uses the services of an external entity)

Dossier of business suspension of partnerships

- 1 Notice of business suspension (in the prescribed form)

- 1 Decision and copies of the meeting minutes of the general partners

- 1 Power of attorney (if the individual or organization uses the services of an external entity)

Thus, business suspension is not a complicated procedure but it is very necessary in case the company is facing difficulties in business operation, the business suspension helps the enterprise not be responsible for the Tax obligations as well as other obligations to governmental agencies, this helps company save a lot of money during the difficult period of the company.

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