Shall the company be handled by the competent authority when suspending its business?

My name is Hoang T. Anh. I founded the company in 2015, until March 2018, I issued a notification of business suspension. Since then, my company has not operated again. Therefore, I hope FDVN Law Firm (FDVN) can advise me that if my company continues to stop operating, how shall the competent authority handle it?

FDVN’s opinions:

Thank you for concerning FDVN legal services. Basing on your consulting requirements, after studying the legal documents, FDVN Law Firm offers the following advice:

[1]. Legal provisions related to business suspension

Pursuant to Article 206 of the Law on Enterprises 2020, the provisions on business suspension are as follows: “An enterprise shall send a written notification to the business registration authority at least 03 working days before the suspension or resumption date.”

Pursuant to Clause 1, Article 66 of Decree No. 01/2021/ND-CP: “When an enterprise or branch/representative office/business location suspends its operation or resumes its operation ahead of schedule, a notification shall be sent to Business Registration Office where the enterprise or its branch/representative office/business location was registered at least 03 working days before the date of suspension or resumption. The suspension period must not exceed one year. If the enterprise or its branch/representative office/business location is still suspended after this period, another notification must be sent to the  Business Registration Office at least 03 working days before the date of suspension. The business cessation duration of each notification must not exceed one year.”

Thus, according to the provisions of law, the time limit for business suspension must not exceed 01 years. Upon the expiration of the notice period, if the company still suspends its business activities, a notification must be sent to the Business Registration Office but must not exceed 01 year. Your company has noticed the business suspension in March 2018.  Up to now, your company has not been operational again, so it shall be subject to legal sanctions.

[2] Handling cases of business operation suspension beyond the permitted time limit

Pursuant to Article 212 of the Law on Enterprises 2020, an enterprise’s Certificate of Enterprise Registration shall be revoked in the following cases:

“a) The enterprise registration application contains fraudulent information;

b) The enterprise is established by persons banned from establishing enterprises specified in Clause 2 Article 17 of this Law;

c) The enterprise is suspended for 01 year without notifying the business registration authority and the tax authority;

d) The enterprise fails to send reports in accordance with Point c Clause 1 Article 216 of this Law to the business registration authority within 06 months from the deadline or from the receipt of a written request;

dd) Other cases under decision of the court or request of competent authorities as prescribed by law.”

Thus, in case your company suspends its business for more than 01 year without notifying the business registration agency and tax authority, the business registration certificate will be revoked.

Above is FDVN Law Firm's opinion for your consulting requests based on studying the relevant legal provisions. Hopefully, FDVN's advice would be helpful to you.

Dinh Thi Thong - FDVN Law Firm

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