When business is facing many difficulties and many businesses cannot continue to operate, temporarily ceasing business is an option worth considering if the business does not want to dissolve. In general, temporarily suspending business is simpler and easier to carry out than stopping business completely (dissolving). In the following article, Aladin Law will describe the documents businesses must prepare and the actions required to implement business suspension procedures.
1. What is business suspension?
Suspension of business requires the business to register with the Department of Planning and Investment regarding the temporary suspension of operations. Business suspension must be carried out in accordance with the business suspension procedures prescribed in the Enterprise Law 2020.
According to the provisions of Clause 1, Article 41 of Decree 01/2021/ND-CP, business suspension is the legal status of an enterprise that is temporarily suspending business according to the provisions of Clause 1, Article 206 of the Enterprise Law. The date of changing the legal status to “business suspended" is the date the enterprise registered to suspend business. The end date of the legal status "business suspended" is the date that the enterprise has announced or the date the enterprise registered to resume business before the announced deadline.
2. Procedures for registering business suspension for enterprises
Legal basis for suspension of business
Enterprise Law 2020
Decree No. 01/2021/ND-CP takes effect on January 4, 2021
Circular No. 01/2021/TT-BKHDT takes effect on May 1, 2021
Business suspension applications include:
According to Article 66 of Decree 01/2021/ND-CP:
- Notice of temporary business suspension (reference form in Appendix No. II-19 Circular 01/2021/TT-BKHDT);
- Resolution and decision to suspend business (of the owner of a single-member limited liability company, of the Board of members of a multiple-member limited liability company, of the Board of Directors of a joint stock company, etc.);
- Copy of the meeting minutes of the Board of Members for a limited liability company with two or more members, a partnership; the Board of Directors for a joint stock company; of the partners for a partnership;
- Resolution and decision of the company owner for a single-member limited liability company on suspension of business.
Enterprises, branches, representative offices, and business locations that suspend business shall send a notice to the Business Registration Office where the enterprise, branch, representative office, or business location is located no later than 03 working days before the date of business suspension.
Or you can submit your application through the National Business Registration Portal at https://dangkykinhdoanh.gov.vn/
After receiving the business's application, the Business Registration Office will process it within 03 working days to provide the following results:
- Confirmation that the enterprise has registered to suspend business if the application is valid;
- Notification of amendments and supplement documents if the documents are not valid.
Business suspension period
In accordance with Clause 1, Article 41 of Decree 01/2021/ND-CP, the business suspension period cannot exceed one year. Before the suspension period ends, the business can extend the suspension indefinitely. This is a new and superior feature of the Enterprise Law 2020 on suspension of businesses compared to a maximum of 02 consecutive years (according to the previous Enterprise Law 2014).
3. Suspend business at the request of competent authorities
In case the Business Registration Office receives a document from competent authorities regarding businesses engaging in restricted business lines or business lines restricted to foreign investors without fulfillment of conditions prescribed by law, the Business Registration Office issues a notice requesting businesses to suspend business in restricted business lines, and business lines restricted to foreign investors.
In case the business does not suspend or terminate restricted business lines and business lines restricted to foreign investors, the Business Registration Office requires businesses to report according to the provisions of Point c, Clause 1, Article 216 of the Law on Enterprises
Within 03 working days from the date the Business Registration Office receives the document from the competent authorities requesting to suspend the business, the Business Registration Office updates the information in the National Business Registration Database and publishes it on the National Business Registration Portal.
Notice:
During the business suspension period, businesses will not be allowed to sign contracts or issue invoices. During suspension, the business does not have to submit tax reports.
Above is information about business suspension procedures for businesses. In case you need advice, please contact us if you are having legal problems or need assistance. You can contact us through the online legal consultation hotline number 1900.57.57.73. In addition, you can also send a detailed email to the email address: luatsu@aladinlaw.vn to receive quick, effective support and answers to your questions. We appreciate your cooperation and look forward to accompanying you on every legal journey.