Guide to registering a temporary suspension of business for a joint stock company

Registering a temporary suspension of business for a joint stock company involves completing legal procedures with the business registration authority to temporarily cease business operations for a specified period.

Resuming business operations for a joint stock company means deciding to restart business activities and notifying the business registration authority after a period of temporary suspension.

This article guides you on how to register a temporary suspension for a joint stock company.

A- Compliance with Procedures for Registering a Temporary Suspension for a Joint Stock Company

Compliance with legal procedures during the process of registering a temporary suspension of business is mandatory. This ensures that the company’s rights are protected throughout the suspension period.

1. Regulations on Temporary Suspension:

1. • According to the Enterprise Law 2014, businesses must notify the business registration authority at least 15 days before temporarily suspending or resuming business operations.
   • The law permits a maximum business suspension period of 01 year, with a possibility of extension once, but the total time should not exceed 02 years.

2. Consequences of Non-Compliance: If a business fails to comply with the suspension procedures, two main consequences may occur:

1. • Administrative Penalties:
     • The business may be fined from VND 1,000,000 to VND 2,000,000 if it fails to notify the business registration authority of the temporary suspension within the required time.
     • If a branch or representative office is not notified of the suspension during the process of registering a temporary suspension of business, the fine may range from VND 2,000,000 to VND 3,000,000.
     • The business may have its business registration certificate revoked if it suspends business for 01 year without notification.
   • Damages in Case of Disputes:
     • If the business does not carefully manage and store documents during the suspension period, it may face difficulties in legal disputes.
     • For example, in the case of judgment No. 127/2021/DSPT (HERE) dated September 21, 2021, of the People’s Court of Đắk Lắk Province, Company A, which temporarily suspended operations from July 11, 2020, to July 10, 2021, did not manage and store documents properly. When a dispute arose regarding a coffee transaction with Ms. Lại Thị Ánh D, the company could not provide the necessary evidence to protect its rights.
     • The court ordered the company to be liable for payment as it could not provide documents to support its claim that the business faced market competition difficulties and needed to suspend to restructure operations, affecting its payment ability for the debt owed to Ms. D. This highlights the importance of careful document management, even during the suspension period.

1. Registering a Temporary Suspension 

When a joint stock company intends to temporarily suspend business operations, several important steps must be taken to ensure legality and clearance. The registration dossier for suspension includes:

• Notification of temporary suspension of business according to the form.
• Resolutions, decisions, and copies of meeting minutes of the Board of Directors.

1. Notification of Resumption of Business Before the Announced Deadline

When the suspension period ends and the joint stock company decides to resume operations, it must notify the relevant parties. The notification is done using the form for the Notification of Temporary Suspension of Business – Resumption of Business Before the Announced Deadline.

1. Forms Related to Suspension Procedures

• Annex II-19 Notification of Temporary Suspension of Business – Resumption of Business Before the Announced Deadline (download here).
• Minutes of the Board of Directors’ meeting on the temporary suspension of business.
• Decision of the Board of Directors on the temporary suspension of business.

1. Submission of Documents and Receipt of Results

The process of preparing documents and handling the results for temporarily suspending a joint stock company is similar to the process of preparing and handling results for establishing a new joint stock company. You can find detailed information and implementation instructions here.

1. Related Legal Documents

For more information on legal documents related to this procedure, you can view them here. Remember that this process must be carried out according to regulations to avoid legal issues. This ensures that the joint stock company operates legally and transparently during the suspension of business.

If you have any questions or need further assistance, please contact Unilaw at 0912266811 or email legal@unilaw.vn.

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