Legal provisions on notice of dissolution to business partners

The following article provides an analysis of practical issues, current legal provisions, and clarifications on the obligation to provide dissolution notice to business partners of enterprise dissolution.

The following article provides an analysis of practical issues, current legal provisions, and clarifications on the obligation to provide dissolution notice to business partners of enterprise dissolution.

I. Current situation regarding dissolution notice to business partners

In practice, many enterprises, when implementing dissolution procedures, often focus solely on fulfilling requirements with the business registration authority and the tax authority, while neglecting to notify their business partners adequately. It results in unfinished contracts, unsettled payment obligations, contractual disputes, loss of credibility, and even potential civil lawsuits.

Moreover, some enterprises provide dissolution notices to their partners in an unclear or delayed manner, depriving them of sufficient time to make necessary business adjustments, thereby causing difficulties in business operations.

Although the law stipulates the obligation to disclose dissolution information, enforcement remains inconsistent in practice. Many enterprises still fail to recognize the importance of transparency with their partners. This calls for stricter compliance and more specific guidance to safeguard the rights and interests of the parties involved.

II. What is a dissolution notice to business partners?

In business activities, partners are entities whose rights and obligations are linked to the enterprise through contracts, transactions, or civil and commercial commitments. Accordingly, when an enterprise proceeds with dissolution, notifying its business partners is a manifestation of transparency, accountability, and compliance with legal requirements. It is not only a legal procedure but also a measure to maintain credibility and protect the lawful interests of both parties.

1. Is it permissible not to notify business partners of dissolution?

Pursuant to Clause 3, Article 208 of the Law on Enterprise 2020, within seven (07) working days from the date of adoption, the resolution or decision on dissolution and the minutes of the meeting must be sent to the Business Registration Authority, the tax authority, and employees of the enterprise.

Thus, an enterprise is not permitted to omit such notice. Failure to notify may constitute a contractual breach, giving rise to disputes over payment, claims for damages, and difficulties in debt settlement before dissolution.

2. Main considerations in notifying business partners of dissolution

Enterprises should observe the following when notifying business partners of dissolution:

Recipients of notice: Business Registration Authority, tax authority, and employees of the enterprise (Clause 3, Article 208, Law on Enterprise 2020).
Contents of notice: Must include resolutions or decisions on dissolution in accordance with Clause 3, Article 208, Law on Enterprise 2020. If the enterprise has outstanding financial obligations, the resolution or decision on dissolution and debt settlement plan must also be sent to creditors and other relevant parties.
Form and timing: The notice must be timely, clear, and comprehensive. It should be in writing with acknowledgment of receipt (delivered directly, via post, or by email with confirmation) to ensure legal validity.

III. Legal provisions on dissolution notice to business partners

In the dissolution process, an enterprise must not only comply with obligations to state authorities but also adhere to regulations concerning its business partners. Current legislation prescribes specific requirements to ensure transparency, publicity, and protection of the parties’ legitimate rights. Proper understanding and compliance with such provisions are crucial to avoid legal risks.

1. Relevant legal provisions

Main legal provisions include:

Law on Enterprise 2020, as amended in 2025: Governing conditions for dissolution (Article 207) and procedures for dissolution (Article 208), requiring resolutions, decisions on dissolution, and meeting minutes to be submitted to the Business Registration Authority, tax authority, and employees.
Decree No. 168/2025/ND-CP: Providing guidance on dissolution procedures under Article 64.

2. Implementation of dissolution notice to business partners

The procedure under Article 208 of the Law on Enterprise 2020 (as amended in 2025) and Article 64 of Decree No. 168/2025/ND-CP is as follows:

Step 1: Adoption of resolution or decision on dissolution.

Such resolution or decision must include:

Name and address of the enterprise’s head office;
Reason for dissolution;
Time limit and procedures for contract liquidation and debt settlement;
Measures for settlement of labor contracts;
Full name and signature of the owner of a private enterprise, company owner, Chairman of the Members’ Council, or Chairman of the Board of Directors.
Step 2: Notification of dissolution.

Within seven (07) working days from the adoption of the resolution or decision on dissolution, the enterprise must submit to the provincial Business Registration Authority:

The resolution or decision on dissolution (depending on enterprise type);
Meeting minutes (if applicable);
Debt settlement plan (if any), including creditor information, outstanding debts, payment methods and deadlines, and procedures for resolving creditor complaints.

In addition to submission to the Business Registration Authority, enterprises must also notify the tax authority and employees. The resolution or decision on dissolution must be published on the National Business Registration Portal and publicly posted at the head office, branches, and representative offices.

3. Sanctions for non-compliance with dissolution notice requirements

Under Article 58 of Decree No. 122/2021/ND-CP, administrative fines may be imposed for violations, including:

A fine of 20,000,000 VND to 30,000,000 VND for:
+ Failing to dissolve upon expiry of the term stated in the charter without extension;
+ Failing to dissolve when membership falls below the statutory minimum for six consecutive months without conversion;
+ Failing to terminate operations of branches, representative offices, or business locations before filing for dissolution.

IV. Questions on dissolution notice to business partners

1. What are the consequences if the notice is not sent on time?

The enterprise may face administrative sanctions under Article 58 of Decree No. 122/2021/ND-CP and liability for damages if delayed notice affects partner rights.

2. Does a dissolution notice affect ongoing contracts?

According to Point e, Clause 1, Article 211 of the Law on Enterprise 2020, once a dissolution decision is made, enterprises are prohibited from terminating valid contracts.

Thus, ongoing contracts remain enforceable notwithstanding dissolution notice.

3. What are the benefits of timely notice?

Safeguards partner rights and allows timely business planning;
Facilitates smooth fulfillment of legal obligations;
Minimizes disputes and liability risks;
Preserves enterprise reputation and credibility;
Enables efficient contract and asset liquidation.

4. How should enterprises respond if partners oppose dissolution?

Negotiation and clarification of legal grounds and debt settlement plans should be attempted first. If unsuccessful, disputes may be resolved through arbitration or court proceedings.