Temporary suspension of business

Reference situation:

A one-member limited liability company was established in 2017. Due to its ineffective business, the company would like to suspend its business in the next 01 year. The company would like to consult lawyers about the legal procedures for business suspension.

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 200 of Law on Enterprise 2014 provides that “An enterprise may temporarily suspend its business but must notify the business registration office in writing of the point of time and period of temporary suspension or resumption of its business no later than fifteen (15) days before the date of temporary suspension or of resumption of its business.”

Therefore, the company can suspend its business temporarily even its business is ineffective. However, the company must be eligible for the following conditions:

  • The company must pay any outstanding taxes;
  • The company must continue to pay other debts and must complete the performance of the contract signed with customers and employees unless otherwise agreed by the enterprise, creditors, customers, and employees.

In order to suspend temporarily its business legally, the company should perform the procedures for notifying the Department of Planning and Investment where the company is located about this.

Please click here to refer to the procedures for the temporary suspension of business.

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