“In the course of business operations, enterprises cannot avoid certain risks such as market, financial and strategic risks. Inability to handle risks well or not improvising to deal with the challenges of the economy can put businesses at risk of dissolution or bankruptcy. Some enterprises, making changes to business goals or operational purposes, or simply not willing to continue operating can choose to dissolve or be subjected to dissolution under the provisions of the Law on Enterprise 2020. So, what are the cases and conditions for dissolution of enterprise?”
According to the provisions of Clause 1, Article 207 – Law on Enterprise 2020, enterprises will be dissolved in the following cases:
Besides the provisions on the right to dissolve and terminate enterprises, the ‘Law on Enterprise’ also contains provisions aimed at protecting the legitimate rights and interests of entities related to the dissolved enterprise. In particular, the interests of creditors and employees of the business are protected. Therefore, the conditions for the dissolution of the enterprises are prescribed by the Law on Enterprises as follows:
In this article, we only refer to the enterprise dissolution procedure applicable to the cases in Sections 1.1, 1.2, and 1.3 of this Article. They are:
Dissolution application is specified as follows:
Note: After the decision on dissolution of the enterprise is issued, the enterprises are strictly prohibited from carrying out the following activities: Concealing, disguising assets, denying or reducing the creditors’ claims to the payable debts, converting unsecured debts into debts secured with the enterprise’s assets, Concluding new contracts except for those necessary for dissolving the enterprise, pledging, donating, leasing out assets, terminating effective contracts, or raising capital in any manner.
Above are some provisions of the ‘law on dissolution of the enterprises’ for your reference.
Time of writing: 18 June 2021
The article is based on the current law at the time of recording as above and may no longer be relevant at the time readers access this article due to changes in applicable law and specific cases that the reader wants to apply. Therefore, the article is for reference only.