Dissolution procedures for joint stock companies

1. Cases of dissolution of joint stock companies

Dissolution of a joint stock company is the procedure by which a joint stock company terminates its business activities, either voluntarily or compulsorily according to the decision of a competent State agency.

Accordingly, a joint stock company is only dissolved in the following cases:

- The term of operation stated in the Company Charter ends without a decision to extend; (1)

- According to the decision of the General Meeting of Shareholders; (2)

- The company no longer has the minimum number of members as prescribed by the Enterprise Law 2020 for a period of 06 consecutive months without completing procedures to convert the type of enterprise; (3)

- The Certificate of Business Registration is revoked or by Court decision; (4)

2. Property obligations of a joint stock company upon dissolution

- A joint stock company can only be dissolved when it ensures payment of all debts and other financial obligations and the joint stock company is not in the process of resolving disputes at the Court or arbitration agency.

- In case a joint stock company is dissolved due to the revocation of its Business Registration Certificate, the relevant manager and the enterprise shall be jointly responsible for the debts of the enterprise.

- For joint stock companies with affiliated units (branches, representative offices, business locations), before carrying out dissolution procedures, the enterprise must carry out procedures to terminate the operations of those affiliated units.

3. Procedures for dissolving a joint stock company

- For cases of dissolution (1), (2), (3) are implemented as follows:

Step 1. Approval of the decision to dissolve the joint stock company

See details at job: "Approval of dissolution decision".

Step 2. Public announcement of dissolution decision

See details at job: "Dissolution Notice".

Step 3. Liquidation of assets and debts of the dissolved joint stock company

The Board of Directors directly organizes the liquidation of the company's assets, except in cases where the Company Charter stipulates the establishment of a separate liquidation organization.

The debts of a joint stock company are paid in the following order:

- Debts of wages, severance pay, social insurance as prescribed by law and other benefits of employees according to collective labor agreements and signed labor contracts;

- Tax debt;

- Other debts.

In case after paying all debts and costs of company dissolution, there are still assets, the remaining amount will be divided among company shareholders according to the ratio of share ownership.

In addition, if the dissolved joint stock company is a joint stock company using a seal issued by the police agency, it must return the seal and the Certificate of Seal Sample Registration to the police agency according to regulations when carrying out dissolution procedures. See details at the job: "Seal Return Procedures"

Step 4. Complete tax obligations with tax authorities upon dissolution

See details at job: "Procedures for completing tax obligations upon dissolution"

Step 5. Submit application for dissolution of joint stock company

See details at job: "Submit dissolution documents"

- In case of dissolution due to revocation of business registration certificate or by court decision

Within 10 days from the date of receipt of the decision to revoke the Certificate of Business Registration or the effective decision of the Court, the joint stock company must convene a meeting to decide to dissolve the joint stock company.

Then, follow the procedures for dissolving a joint stock company as in the above cases.

Note: In cases where the law requires newspaper publication, when carrying out the Dissolution Notification procedure, the decision to dissolve the enterprise must be published in at least one written or electronic newspaper for three consecutive issues.