Reference situation:

A legal representative of a joint-stock company would like to consult lawyers about the necessary documents and procedures for the dissolution of a joint-stock company because his company’s business was unprofitable.

Legal grounds:

1. Law on Enterprise 2014;
2. Decree No. 78/2015/NĐ-CP;
3. Decree No. 108/2018/NĐ-CP;
4. Circular 02/2019/TT-BKHĐT.

Our legal advice:

Article 201 of Law on Enterprise 2014 provides legal conditions and cases in which an enterprise will be eligible for dissolution:

“1. An enterprise shall be dissolved in the following cases::

[…]

b) As decided by the enterprise owner in the case of a private enterprise, by all unlimited liability partners in the case of a partnership, by the members’ council or the company owner in the case of a limited liability company, or by the general meeting of shareholders in the case of a joint-stock company;

2. An enterprise is only allowed to be dissolved when it ensures it will pay all debts and other property obligations and is not in the process of resolution of a dispute at a court or arbitration agency. The related manager and the enterprise stipulated in clause 1(d) of this article are jointly responsible for the debts of the enterprise.”

Therefore, the general meeting of shareholders of the company must decide on the dissolution of the company. However, the company also needs to complete its debt and other property obligations and is not involved in any process of resolution of a court or arbitration center.

If the company manage any branch, representative office or business location, the company should perform procedures for shutting down the operation of such a branch, representative office or business location.

Please click here to refer to the procedures for and necessary documents for the dissolution of an enterprise.