DISSOLUTION

ENTERPRISE DISSOLUTION

Enterprise dissolution is the process of terminating the business operations of an organization in accordance with the law. This is an important procedure that requires careful handling of each legal step to ensure the lawful interests of all related parties and full compliance with applicable regulations.

1. CONCEPT AND GROUNDS FOR ENTERPRISE DISSOLUTION

Enterprise dissolution refers to the termination of business activities, liquidation of assets, settlement of obligations with related parties, and removal of the enterprise’s name from the National Business Registration System. Dissolution may arise from various reasons, including:

• The enterprise no longer wishes to continue business operations;

• Expiration of the operating term stated in the charter without extension;

• A decision by a competent authority (e.g., revocation of the Enterprise Registration Certificate);

• Division, separation, consolidation, or merger of the enterprise;

• Ineffective business operations making continuation impossible.

Cases of enterprise dissolution:

• Dissolution by decision of the enterprise owner:
  The enterprise owner or the competent body specified in the charter has the right to decide on dissolution when voluntarily terminating operations.

• Dissolution upon expiration of the operating term stated in the charter without extension:
  If the charter specifies an operating term and such term is not extended, the enterprise must proceed with dissolution.

• Dissolution due to failure to maintain the minimum number of members for a continuous period of six (06) months without conversion of the enterprise type.

• Dissolution due to revocation of the Enterprise Registration Certificate:
  When the competent authority revokes the certificate, the enterprise loses its legal status and must be dissolved.

Mandatory principle prior to dissolution:

An enterprise may only be dissolved after all debts and other property-related obligations have been fully settled, and when it is not involved in any dispute being resolved by a court or arbitration.

2. CONDITIONS FOR ENTERPRISE DISSOLUTION

Pursuant to the current Law on Enterprises (as amended and supplemented in 2025), an enterprise may only be dissolved when all of the following conditions are satisfied:

• All outstanding financial obligations have been fully settled (including tax liabilities, salary payments, and debts to partners);

• A lawful dissolution decision has been issued by the owner, Members’ Council, or General Meeting of Shareholders;

• All asset liquidation obligations have been completed, debts have been fully paid, and tax procedures with the tax authority have been finalized.

If outstanding debts remain, the dissolution application will not be approved until all financial obligations are fully resolved.

3. ENTERPRISE DISSOLUTION PROCEDURE

The enterprise dissolution process generally includes the following steps:

Step 1: Issuance of a dissolution decision

The enterprise must issue a dissolution decision clearly stating the reason for dissolution, the time of dissolution, the plan for settlement of financial obligations, and the assignment of persons responsible for carrying out the procedures.

Step 2: Notification of dissolution to the Department of Finance

The dissolution notice must be submitted to the business registration authority and publicly announced on the National Enterprise Registration Portal within 07 working days from the date of the dissolution decision.

Step 3: Asset liquidation and settlement of obligations

After the enterprise’s status in the National Enterprise Registration Database is updated to “undergoing dissolution procedures,” the enterprise shall proceed with asset liquidation, debt recovery, and payment of debts in the following order of priority: salaries, tax liabilities, debts to partners, and other obligations.

Step 4: Completion of procedures with the tax authority

The enterprise must submit the application for termination of the tax identification number, finalize tax settlements, and obtain confirmation of fulfillment of tax obligations from the tax authority.

Step 5: Submission of the dissolution dossier to the Department of Finance

The dissolution dossier includes:

• Resolution or Decision on enterprise dissolution;

• Minutes of meetings;

• Enterprise asset liquidation report;

• List of creditors and debts already paid, including full payment of tax liabilities and social insurance, health insurance, and unemployment insurance contributions for employees after the dissolution decision (if any);

• Confirmation of fulfillment of tax obligations;

• Original Enterprise Registration Certificate.

Upon approval of the dossier, the enterprise will be removed from the business registration system.

4. IMPORTANT LEGAL NOTES

• The enterprise must ensure that dissolution does not affect the lawful rights of employees. Salary payments, severance allowances, and social insurance obligations must be fully settled.

• If the enterprise’s license is revoked due to legal violations, dissolution shall be decided by the competent authority.

• If the enterprise is involved in disputes or litigation, the dissolution process may be suspended until a final judgment or decision is issued.

5. ENTERPRISE DISSOLUTION CONSULTING SERVICES OF 1 LAW

With a team of experienced professionals, we provide comprehensive enterprise dissolution consulting and implementation services, including:

• Advising on dissolution conditions and procedures suitable for each type of enterprise;

• Drafting legal documents and representing clients in working with competent state authorities;

• Assisting with asset liquidation, debt settlement, and completion of tax obligations;

• Ensuring a fast, lawful, and cost-effective dissolution process.

If you are considering enterprise dissolution or require in-depth legal consultation, please contact us for timely and effective support. 1 LAW is committed to accompanying clients through every critical legal stage of their business.