• Enterprise Law 2020
  • Bankruptcy Law 2014

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.



DefinitionDissolution 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 applicationBusiness 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 applicationDepartment of Planning and InvestmentCourt
Restrictions for business managers after termination of operationNo retrictionThe 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.

       To save time learning about the law, filling out forms, and submitting documents, you can contact HTLaw for consultation and legal services related to Termination of business activities of the enterprise.

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