I. Understanding the notice of dissolution of a joint stock company
The notice of dissolution of a joint stock company is an official procedure to inform relevant authorities and parties about the termination of the company's operations. Dissolution may occur by resolution of the General Meeting of Shareholders or for other reasons stipulated by law. The procedure includes steps such as completing asset liquidation, settling debts, and submitting dossiers to the business registration authority. The company must comply with the prescribed dossier components and timelines to ensure lawful dissolution.
1. What is a notice of dissolution of a joint stock company?
A notice of dissolution of a joint stock company is an official document announcing the decision to terminate the company’s operations. This notice is made when the company decides to dissolve, often for reasons such as expiry of the company’s operating term, falling below the minimum number of shareholders, or based on a resolution of the General Meeting of Shareholders. The notice must be filed with the business registration authority and publicly disclosed, including information on the company's financial status and liabilities.
2. Reasons for issuing a notice of dissolution of a joint stock company
A notice of dissolution is issued for several reasons:
- Expiry of the company’s term as stated in the Charter: When the company reaches its registered term without extension, it must proceed with dissolution. This is a common reason requiring dissolution if there is no extension plan.
- Resolution of the General Meeting of Shareholders: A joint stock company may be dissolved if the General Meeting of Shareholders passes such a resolution. Specifically, when the company can no longer operate effectively, or shareholders decide to terminate the company.
- Failure to maintain the minimum number of shareholders: According to the Law on Enterprise 2020, a joint stock company must maintain at least three shareholders. If the company fails to meet this minimum for six consecutive months without converting to another form, it must dissolve.
- Inefficient business operations: If the company fails to achieve its business objectives or faces serious financial difficulties making continued operation infeasible, it may resolve to dissolve.
- Revocation of the Enterprise Registration Certificate: In cases of serious legal violations, the company’s registration certificate may be revoked by the authorities, requiring dissolution.
When any of these situations occur, the joint stock company must implement dissolution procedures and settle all financial obligations before officially ceasing operations.
II. Legal provisions on the notice of dissolution of a joint stock company
1. Cases and conditions for issuing a notice of dissolution
According to Article 207 of the Law on Enterprise 2020, a company is dissolved in the following cases:
- Expiry of the operation term stated in the company’s charter without a resolution to extend;
- Resolution or decision of the owner in a private enterprise, the Members' Council in a partnership, the Members' Council or owner in a limited liability company, or the General Meeting of Shareholders in a joint stock company;
- Failure to maintain the minimum number of members as prescribed by this Law for six consecutive months without implementing conversion procedures;
- Revocation of the Enterprise Registration Certificate, except as otherwise provided by the Law on Tax Administration.
A company can only be dissolved after ensuring all debts and property obligations are settled and not being involved in disputes at a court or arbitration. Relevant managers and the enterprise as prescribed by point d, Clause 1 of this Article are jointly responsible for the company’s debts.
2. Procedures and processes for notifying dissolution
Pursuant to Article 208 of the Law on Enterprise 2020, procedures and processes for dissolution are follows:
- A dissolution resolution or decision must be passed, containing:
+ Name and address of the company’s head office;
+ Reason for dissolution;
+ Duration and procedures for liquidation of contracts and payment of debts;
+ Plan to handle obligations arising from labor contracts;
+ Full names and signatures of the owner, Chairman of the Members’ Council, or Chairman of the Board of Directors.
- The owner, Members’ Council, or Board of Directors organizes the liquidation of company assets, unless the company charter provides for a separate liquidation agency.
- Within 7 working days from the date of approval, the resolution, decision and meeting minutes must be sent to the business registration authority, tax authority, and employees. They must also be posted on the National Business Registration Portal and publicly displayed at the company’s head office, branches, and representative offices.
If the company still has unsettled financial obligations, the resolution, decision and debt settlement plan must also be sent to creditors and related parties. This plan must list names and addresses of creditors; debts, payment timelines, locations, and methods; as well as procedures and time for handling creditor complaints.
- The business registration authority shall notify the company’s status as undergoing dissolution procedures on the National Business Registration Portal upon receiving the resolution and decision.
- Company debts are settled in the following priority order:
+ Salaries, severance pay, social insurance, health insurance, and unemployment insurance as prescribed by law and other benefits of employees according to collective labor agreements and signed labor contracts;
+ Tax debts;
+ Other liabilities.
- After paying dissolution expenses and debts, any remaining assets are distributed to members, shareholders, or owners according to their capital contributions or shares.
- The legal representative must submit the dissolution dossier to the business registration authority within 5 working days from the date all debts are settled.
- If after 180 days from receiving the resolution and decision (or within 5 working days after receiving the dissolution dossier) there is no opinion or objection in writing of the enterprise and related parties, the business registration authority updates the company’s legal status on the National Database of Enterprises as defined by Clause 3 of this Article.
3. Dossier for notifying dissolution
Under Article 210 of the Law on Enterprise 2020, the dissolution dossier includes:
- Notice of dissolution;
- Asset liquidation report; list of creditors and settled debts, including tax and obligations for social insurance, health insurance, unemployment insurance for employees after the decision to dissolve the enterprise (if any).
Members of the Board of Directors (for joint stock companies), Members’ Council (for limited liability companies), owners, directors or general directors, members of partnerships, and the company’s legal representative are responsible for the honesty and accuracy of the dissolution dossier.
If the dossier is inaccurate or falsified, these entities are jointly liable for any unpaid employee benefits, unpaid taxes, other unsettled debts, and take personal legal responsibility for 5 years from the date of submission.
III. Questions on the notice of dissolution of a joint stock company
1. How long is the deadline to file a notice of dissolution?
According to Clause 1, Article 70 of Decree 01/2021/ND-CP, in case of dissolution upon expiry of the company’s term, the company must send the notice to the Business Registration Office where the enterprise has its head office within 7 working days from the date of passing the resolution and decision.
The notice must be accompanied by:
- Resolutions, decisions and minutes of meetings of the Board of Members for limited liability companies with two or more members, partnerships, of the General Meeting of Shareholders for joint stock companies;
- Resolutions and decisions of the company owner for single-member limited liability companies on the dissolution of the enterprise;
- Debt settlement plan (if any).
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2. What must be included in the notice?
According to Appendix II-22 of Circular 01/2021/TT-BKHDT and Clause 1, Article 208 of the Law on Enterprise 2020, the notice must include:
- Name and address of its head office;
- Reason for dissolution;
- Duration and procedures for liquidation and debt payment;
- Plan for handling labor obligations;
- Full name and signatures of the owner, Chairman of the Members’ Council, or Chairman of the Board of Directors.
3. Main notes when notifying dissolution
- Ensuring all dissolutive conditions: The company must complete financial obligations, including paying taxes and social insurance, and must not be in dispute at court or arbitration.
- Observing duration and completing dossiers: The submission of the dissolution notice and related documents (including the dissolution resolution or decision, meeting minutes (if any), debt settlement plan) must be done within the time prescribed by law. Ensuring that these documents are complete and accurate will help the dissolution process to be recognized and not encounter legal problems.
- Ensuring truthful information: The legal representative takes responsibility for the accuracy and truthfulness of the notice. If there are any faults in the notice or attached documents, the company is able to face legal consequences from competent State authorities, including criminal ability.
- Updating legal status: After dissolution, the company must request the business registration authority to update the company’s status to avoid it being considered still active.
Compliance with these legal regulations not only promotes the implementation process, but also protects lawful rights and interests of shareholders and other related persons.
4. Can a company change its mind after notifying dissolution?
Under Clause 3, Article 208 of the Law on Enterprise 2020, if the company has only filed the notice (not completed dissolution or been updated as “dissolved”), it may cancel or adjust the decision by:
- Issuing a new resolution or decision;
- Sending a notice with an explanation to the business registration office.
- Stating clear reasons and commitments.
However, If the company’s status has already been updated as “dissolved,” it must re-register from the start to operate again as a new company
5. Must the notice be publicly disclosed?
Under Clause 3, Article 208 of the Law on Enterprise 2020:
- The resolution, decision, and meeting are required to be sent to the business registration authority, tax authority, and employees within 07 working days from the date of adopting. Then resolution and decision must be published on the National Business Registration Portal and posted at the company’s head office, branches, and representative offices.
In some cases according to Clause 2, Article 209, dissolution of an enterprise in case of revocation of the Certificate of Enterprise Registration or by Court decision, as follows:
- Within 10 days from the date of receiving the decision to revoke the Business Registration Certificate or the Court's decision that has come into legal effect, the enterprise must convene a meeting to decide on dissolution. The resolution, decision, a copy of the revocation decision, or the Court's decision must be sent to the Business Registration Authority, the tax authority, and the employees. It also must be publicly posted at the head office, branches, and representative offices of the enterprise.
- In cases where the law requires publication in newspapers, the resolution and decision must be published in at least 01 printed or electronic newspapers for 03 consecutive issues.
Note: In case the enterprise still has outstanding financial obligations, it must simultaneously send the enterprise's dissolution resolution and decision, and debt settlement plan to creditors and persons with related rights and obligations. The notice must include the name and address of the creditor; the amount of debt, the deadline, location and method of payment; the method and time for resolving creditors' complaints.
IV. Legal advisory service on the notice of dissolution of a joint stock company
NP Law’s legal advisory service on notices of dissolution of joint stock companies helps businesses lawfully terminate operations. We provide detailed advice on dissolution conditions, content requirements of the notice, timelines and procedures, assist in preparing dossiers, public disclosures, and resolve related legal issues.
