Ending a company legally involves a process known as “liquidation.” Liquidation is the process of dissolving a company and distributing its assets to creditors and shareholders. This process can be voluntary or involuntary, and is typically initiated by the company’s directors or shareholders.
In Vietnam, the steps to legally end a company include:
Obtaining approval from the company’s shareholders: In order to liquidate a company in Vietnam, the company’s shareholders must first approve the decision to dissolve the company. This is typically done through a vote at a shareholders’ meeting.
Filing a liquidation declaration with the Ministry of Planning and Investment: Once the decision to liquidate the company has been approved by the shareholders, a liquidation declaration must be filed with the Ministry of Planning and Investment. This declaration must include information about the company’s assets, liabilities, and shareholders.
Paying debts and liabilities: Once the liquidation declaration has been filed, the company must pay all of its debts and liabilities. This includes outstanding loans, employee salaries, and taxes owed to the government.
Distributing assets to creditors and shareholders: After all debts and liabilities have been paid, the company’s remaining assets are distributed to creditors and shareholders. This distribution is typically done in accordance with the company’s articles of association and the priorities set out in the Vietnamese Commercial Law.
Cancelling business registration: Once the assets have been distributed and all debts have been paid, the company’s business registration must be cancelled. This is done by filing a cancellation declaration with the Ministry of Planning and Investment.
It is important to note that the liquidation process in Vietnam can be complex and time-consuming, and it is recommended that companies work with experienced legal professionals to ensure that the process is completed correctly and in compliance with local laws and regulations. Failure to follow the proper procedures can result in significant fines and penalties, and can also harm the reputation of the company and its shareholders.
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