Company dissolution service is a service that Vinasc Group will conduct consulting activities and procedures to terminate the Company’s operation in accordance with the law.
In order to terminate the existence of the tax code and complete the dissolution procedures at the business registration office, we take the following steps:
Step 1: Terminate the operation of IRC investment projects (For enterprises with investment projects).
- Implementation time: Within 15 days from the date of the decision to terminate the operation of the investment project.
- Result: Written notice of termination of investment project operation.
Step 2: Notify the dissolution decision to the business registration agency:
- Implementation time: Within 07 days from the date of the dissolution decision from the Company;
- Dissolution information is recorded on the national information system about the temporary suspension of the enterprise to carry out the dissolution procedure;
- Information from the business registration authority is transferred to the tax authority’s system for further processing by the tax authority;
- Notice of business registration authority of receipt of dossier and request for additional confirmation of termination of tax identification number issued by the tax authority.
Step 3: Decide to delete the name, dissolve the business
Send notice of dissolution and plan to handle issues related to relevant state agencies, employees, creditors… and publicly seal the information at the head office.
- Implementation time: Depending on the objects involved more or less. However, usually we will advise on how to minimize the related objects to shorten the implementation time.
- Result: Ensure that the parties with related rights and obligations have received the information and agreed with the business plan for the next steps of dissolution procedures.
Step 4: Compare, confirm and fulfill tax obligations to the Customs (if the enterprise has import and export activities)
- Implementation time: 5-10 days depending on whether there are more or fewer transactions related to the Customs.
- Result: The notice or record confirming the number of tax liability status as outstanding has now been completed.
- If the business has not completed it, it will pay money to fulfill its tax obligations with Customs.
Step 5: Compare, confirm and fulfill obligations on Social Insurance, Health Insurance… if any;
- Time: 5-10 working days depending on the size of the enterprise and the complexity and compliance of the enterprise in the time before the decision to dissolve;
- Result: Notice of remaining obligations with Social Insurance, Health Insurance …..
- If there is a balance to be paid, the enterprise will pay money to fulfill its obligations to the State agency.
Step 6: Carry out the procedures to submit the dossier to the tax authority and carry out the procedures for closing the tax identification number;
- Time: In fact, this is a lengthy and complicated procedure when dissolving an enterprise. Currently, according to regulations and actual implementation, there is no specific regulation on time for completing tax procedures for dissolution. Therefore, with our experience and scientific and flexible working methods, we will try to shorten the completion time for customers at this stage.
- v Minutes, tax finalization documents for dissolution purposes
- v Notice of termination of tax identification number of tax authorities for dissolution purposes.
Step 6 is the most important step in the process of dissolving the company. For this reason, the tax authority must examine the entire tax file for the undetermined period for the purpose of determining the compliance of the procedures, the determination of the tax obligations and the fulfillment of the tax obligations of the enterprise.
At this step, businesses may incur amounts such as: Tax arrears, tax administrative penalties, penalties for fraud, tax evasion, and penalties for late tax payments…
Step 7: Submit the dissolution registration dossier together with the tax agency’s notice of tax code termination to the business registration agency.
- Time: After 5-7 days from the date of receiving the notice of termination of the tax identification number, the business registration agency will issue a notice of termination of the company’s operation.
- Result: Notice of termination of company operation
Customers can check the final results on the national information system and tax code lookup system.
Documents to be kept in mind when conducting company dissolution procedures:
- Check and prepare legal documents of enterprises:
- Internal documents, if any: Charter of the company, financial regulations, salary regulations…
- Business license: Enterprise registration certificate (ERC); Investment Certificate (IRC- for enterprises must have IRC); Business license (also called sub-license – for conditional business lines).
- Accounting records (mainly for the period that have not been taxed):
- Payroll, labor contract….
- Tax reports and related tax reports.
- Financial statements, audit reports (if a foreign-invested enterprise).
- Labor contract, appointment decision, decision to increase or decrease salary….
- All accounting books, including accompanying accounting vouchers. In which Invoices and economic contracts are indispensable.
- The accounting records should note that the liquidation and transfer of assets in the pre-dissolution period need to be determined at a reasonable price to avoid the tax authorities not accepting the price because it is not suitable with the market price. This is content that can lead to disagreements and prolong working time with tax authorities.
- For foreign-invested enterprises:
- It is necessary to check the remaining amount of money transferred abroad after completing tax obligations as well as other obligations in Vietnam.
- Need to check and demonstrate compliance related to investment activities. In which, it proves the capital contribution through the investment account in accordance with the provisions of Circular 05/2015 and Circular 06/2015 of the State Bank.
Foreign-invested enterprises need to notify and work with the Bank – where the investment account is opened to ensure the transfer of profits and contributed capital to the country in accordance with regulations.
Dissolution costs and financial risks for enterprises:
Most businesses that want to dissolve are in a difficult situation, unable to continue to cover operating costs. Therefore, the cost of the dissolution procedure is the most concerning content. Below, we will list the costs incurred and may arise during the dissolution process:
- Service fee for notification and working with the business registration agency
- Service cost to work with: Customs, Insurance…..
- Expenses for working with tax authorities
- Tax arrears
- Expenses for administrative penalties on tax procedures
- The penalty for the act of declaring the wrong tax payable is 20% of the tax amount declared incorrectly or under-declared.
- Expenses for penalties due to acts of tax evasion or tax fraud are 1 to 3 times the tax amount that is not declared, fraudulent or evaded.
- Late payment interest expense is 0.05%/day from the date of arising tax payment obligation calculated on the late payment fine.
- Expenses number (1)+(2)+(3) are called dissolution procedure service costs.
- Expenses from number (4) to number (8) are the responsibility of the enterprise and usually the costs for these items are very large. To limit these losses, before the dissolution of the enterprise, it is necessary to review and re-examine all tax records. Including:
- Ensure tax returns are filed in full and on time;
- Ensure that all tax returns are declared on the basis of correct calculation and full calculation of tax obligations;
- Enterprises do not eliminate tax obligations on incomes or increase costs leading to a reduction in the amount of tax payable;
- Ensure that accounting books are fully made, signed, and archived;
- Ensure invoices and vouchers are fully organized and stored;
- Data should be prepared including on computers to facilitate the provision and work with tax authorities.
Dissolution services as well as consulting services on mergers and acquisitions of Vinasc Group always provide the most timely and beneficial consulting solutions for businesses.
Please contact us for the best advice and service.