Vietnamese
Dissolution is the way that many owners choose to stop the enterprise’s operations that are not operating efficiently. So, what should be done to dissolve the single-member limited liability companies?
1. Cases of dissolution of single-member LLCs
In accordance with the Article 207 of the Enterprise Law 2022, single-member LLCs shall be dissolved in the cases as follows:
- The operation duration stated in the company charter expires and no decision to extend such operation duration is issued;
- Under the resolution or decision of the owner;
- Single-member LLCs has its enterprise registration certificate revoked, unless otherwise prescribed in the Law on Tax Administration.
Within that, in accordance with the Article 212 of the Enterprise Law 2020, Single-member LLCs will have its enterprise registration certificate revoked in the following cases:
+ The contents declared in the enterprise registration dossier are forged;
+ The enterprise was established by persons who are prohibited from establishing enterprises;
+ The enterprise has ceased business operations for 1 year without notifying such cessation to the business registration agency and the tax office;
+ The enterprise fails to send reports to the business registration agency within 6 months from the deadline for sending such reports or after receiving a written request;
+ Other cases as decided by a court or requested by a competent agency.
2. Conditions for dissolution of single-member LLCs
In accordance with the Enterprise Law 2020, conditions for dissolution of single-member LLCs are as follows:
2. An enterprise may only be dissolved when it commits to fully pay debts and perform other property obligations and is not currently involved in the dispute resolution process at court or arbitration. Related managers and the enterprise falling into the case specified at Point d, Clause 1 of this Article must be jointly liable for the enterprise’s debts.
Accordingly, single-member LLCs must satisfy both conditions for dissolution as follows:
- Commits to fully pay debts and perform other property obligations
Note: The conditions is to commit to pay not must pay all the debts and perform other property obligations.
- Single-member LLCs are not currently involved in the dispute resolution process at court or arbitration.
3. Procedures for dissolution of single-member LLCs
In accordance with Article 208, Article 209 of the Enterprise Law 2020 and Article 70, Article 71 of the Decree No. 01/2021/ND-CP, the dissolution of single-member LLCs is different depending on various procedures. In particulars:
* Dissolution for operation duration stated in the company charter expires and no decision to extend such operation duration is issued
Step 1: Approve the decision on dissolution of single-member limited liability companies.
The decision of dissolution for single-member LLCs must have all the major contents as follows:
- Name, address of the headquarter
- Reasons for the dissolution
- Term and procedure for contract liquidation and paying all debts.
- Plans on settling the arising obligations form the labor contracts
- Full name and signature of the owner
Step 2: Public the decision on dissolution of single-member limited liability companies.
Within a period of 07 working days after adopting the resolution or decision on dissolution, shall send a notice of its dissolution to the business registration section where its head office is located.
The notice must be enclosed with the following papers:
- The dissolution decision of the enterprise owner;
- The debt settlement plan (if any).
Step 3: Organize the liquidation of assets and debt settlement
Debts of the single-member LLCs shall be settled in the following order of priority:
- Unpaid amounts of wages, severance allowances, and social insurance, health insurance and unemployment insurance premiums
- Outstanding tax amounts
- Other debts;
Step 4: Submit the dossier of dissolution to the Business Registration Division where the headquarter is located.
Time of submission: Within a period of 05 working days after the debts of the enterprise are fully paid
A dissolution dossier must comprise
- A notice of the enterprise dissolution
- A report on liquidation of the enterprise’s assets; list of creditors and paid debt amounts.
Past 180 days from the date of notifying the enterprise’s status of currently carrying out dissolution procedures, if receiving no written rejection from related parties, or within 5 working days after receiving the dissolution dossier, the business registration agency shall update information about the legal status of the single-member LLCs in the national business registration database.
* In the case of revocation of enterprise registration certificates of single-member LLCs
Step 1: Business registration agencies shall revoke the enterprise registration certificate of single-member LLCs.
Step 2: Single-member LLCs take the meeting for decision of resolution.
Time of implementation: Within 10 days after receiving the decision on revocation of the enterprise registration certificate or the court’s legally effective decision
Step 3: Disclosure of information of the single-member limited liability companies:
After receiving the decision on revocation of the enterprise registration certificate, the enterprise dissolution decision and a copy of the decision on revocation of the enterprise registration certificate or the court’s legally effective decision shall be sent to the business registration agency, tax office and employees of the enterprise.
The decision is publicly displayed at the head office, branches and representative offices of single-member LLCs. If it is required by law, the enterprise dissolution resolution or decision shall be posted on at least 1 printed newspaper or electronic newspaper in 3 consecutive issues.
At the same time, a debt settlement plan shall be sent together with the enterprise dissolution decision to the creditors and persons with related interests and obligations.
Step 4: Liquidation of the enterprise’s assets and obligations
Step 5: Send a dossier for enterprise dissolution
Time of submission: Within a period of 05 working days after the debts of the enterprise are fully paid
Place of submission: the Business registration division of the locality where company’s head office is based.
A dossier must comprise:
- Notice of decision on dissolution of single-member limited liability companies.
- A report on liquidation of the enterprise’s assets; list of creditors and paid debt amounts.
Past 180 days from the date of receipt of the dissolution resolution or decision specified in Clause 3 of this Article, if receiving no written opinions on the dissolution from the enterprise or no rejection from the stakeholders, or within 5 working days after receiving the dossier for enterprise dissolution, the business registration agency shall update information about the legal status of the enterprise in the national business registration database;.
