II. Differences between dissolution and bankruptcy
_ First, the enterprise terminates its operation after dissolution or bankruptcy.
_ Second, the seal and certificate of business registration shall be revoked.
_ Third, enterprise must fulfill property obligations and pay debts when carrying out procedures for dissolution or bankruptcy.
|Definition||Dissolution of an enterprise is the termination of the existence of an enterprise according to the will of the enterprise or of a competent authority.|
Law on Enterprises governing dissolution
|Bankruptcy is the state of an enterprise that is insolvent and declared bankrupt by the people's court.
Bankruptcy Law governing bankruptcy
|Features||_ Cases of enterprises being dissolved:|
a) The expiry of operation term stated in the company's charter without a decision on extension;
b) According to resolutions and decisions of the business owner, for private enterprises, of the Members' Council, for partnerships, of the Members' Council, of the company owner, for limited liability companies; , of the General Meeting of Shareholders, for joint-stock companies;
c) The company no longer meets the minimum number of members as prescribed in this Law for 06 consecutive months without carrying out procedures for transformation of enterprise type;
d) The certificate of enterprise registration is revoked, unless otherwise provided for by the Law on Tax Administration.
_The condition for an enterprise to be dissolved is to fulfill all financial and debt obligations that the enterprise has established with third parties.
_ The dissolution of a business will result in the termination of the company's legal status.
_ Business owners and managers are not restricted or prohibited from holding the position of running the business or performing a number of business activities.
|_ Insolvency means the enterprise fails to fulfill its debt payment obligation within 03 months from the due date of payment.
_ In the process of resolving the bankruptcy case, creditors cannot separate themselves to collect their own debts, but they must all be gathered into a single legal entity, called the creditors' meeting.
_ Bankruptcy is not only for debt collection purposes, but also focuses on helping debtors to recover business operations.
|Right holder for application||Business owner, members' council, company owner, general meeting of shareholders, all general partners.||_ Unsecured creditors, partially secured creditors;
_ Employees, grassroots trade unions, and direct superior trade unions in places where grassroots trade unions have not yet been established;
_ The legal representative of the enterprise, the owner of the private enterprise, the Chairman of the Board of Directors of a joint-stock company, the Chairman of the Members' Council of a limited liability company with two or more members, the owner of the company One-member limited liability company, general partner of a partnership company;
_ Shareholder or group of shareholders meeting the statutory conditions.
|Place of application||Department of Planning and Investment||Court|
|Restrictions for business managers after termination of operation||No retriction||The person holding the managerial position of the enterprise declared bankrupt may be considered and decided by a judge not to have the right to establish an enterprise or a cooperative or to act as an enterprise manager.|
|Procedures||_ Approve the decision to dissolve the enterprise;|
_ Organize the liquidation of assets;
_ Send the decision on dissolution of the enterprise to relevant agencies and organizations;
_ Notify business status;
_ Pay debts of the enterprise;
_ Send the dissolution request to the business registration agency.
|_ File and receive the petition to open bankruptcy proceedings;
_ Negotiate to withdraw the petition to open bankruptcy proceedings;
_ Accept the petition to open bankruptcy proceedings due to unsuccessful negotiation;
_ Decide to open bankruptcy proceedings when there are grounds to open;
_ Organize the creditors' meeting;
_ The court declares the company bankrupt;
_ Execute the court's decision declaring bankruptcy.
For companies with foreign investment. Before dissolving the company, investors need to carry out procedures for termination of investment projects.
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