Regulations on cases of business license revocation, notes on avoiding revocation of business registration certificate, regulations after revocation of business registration certificate.
What is revocation of business registration certificate?
To understand clearly about revoking a business registration certificate, you first need to understand the concept of what a business registration certificate is?
Accordingly, pursuant to Clause 15, Article 4 of the Law on Enterprises 2020, the business registration certificate (also known as the business registration license or business registration certificate) is a paper or electronic document issued by the business registration authority to the enterprise, recording information on business registration. This is the basis for the competent authority to manage basic information as well as confirm the legal status of the enterprise from the date of issuance.
➨ Based on the above concept, we can understand that revoking a business registration certificate means that the state no longer recognizes the legal status of an enterprise, which means that the enterprise loses its eligibility to participate in business activities. At the same time, the licensing authority issues a decision to revoke the enterprise’s business license.
Regulations on cases of revocation of business registration certificate
Pursuant to Article 212 of the 2020 Enterprise Law, an enterprise will have its business registration certificate revoked if it falls into one of the following five cases:
Case 1: Violation of regulations on business establishment entities
All individuals and organizations have the right to establish a company, except for those mentioned in Clause 2, Article 17 of the Enterprise Law 2020.
➨ At that time, if the entity establishing the enterprise falls into one of the prohibited cases, it is considered not to satisfy the conditions for establishing an enterprise. The Business Registration Office will handle as follows:
- For private enterprises and LLCs owned by individuals: Issue a notice of the enterprise’s violation and immediately issue a decision to revoke the enterprise registration certificate;
- For a single-member LLC owned by an organization, a two-member or more LLC, a partnership, and a joint-stock company: Issue a notice requiring the enterprise to change members or shareholders who are not permitted to establish an enterprise within 30 days. If the enterprise fails to make the requested changes within the above-mentioned period, its business registration certificate will be revoked.
Note:
To avoid having the license revoked in this case, before proceeding with the procedure for registering a company or registering a capital contributing member, organizations/individuals should carefully refer to the conditions on the subject of establishing a business according to the provisions of the Enterprise Law 2020.
Reference:
>> Procedures for changing shareholders of joint stock companies;
>> Procedures for changing members of LLC.
Case 2: The declared content in the business registration dossier is false.
In case an enterprise intentionally declares false information and the Business Registration Office suspects the authenticity of the documents, the Business Registration Office will send a document requesting the police to determine the enterprise’s falsification.
The police agency shall conduct verification and return the results in writing to the Business Registration Office within 30 days from the date of receipt of the request.
➨ Depending on the response from the police, the handling method of the Business Registration Office will be different, specifically:
- If the business registration dossier is fake, the Business Registration Office shall issue a notice of violation with a decision to revoke the business registration certificate;
- In case of registration of change of business license with fake change information, the Business Registration Office will handle as follows:
- Issue notice of business violations;
- Decide to cancel fake content and issue a business registration certificate or a certificate of change of business registration content according to the information of the most recent valid dossier;
- Require the enterprise to re-apply for a business registration certificate/certificate of change in business registration content;
- Finally, notify the competent authority for handling according to the provisions of law.
Note:
To avoid having your business registration certificate revoked, you should consider including information in your company registration file (recorded in the business registration certificate) such as: company name, head office address, business type, charter capital, etc. Such information must be content that exists and is true to the actual status of the business when it comes into operation.
>> Reference: Procedures for changing business licenses.
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If a business needs to change the content on its business license such as changing the company name, changing the head office address, changing shareholders, changing the type of company… but does not clearly understand the process and procedures, it can refer to the business license change service at fdiinvietnam.com – the service fee is only 500,000 VND, completed in 3 – 4 working days.
Case 3: Stopping business operations for 1 year or more without notification
If it is discovered that a business has ceased operations for 1 year or more but has not notified the business registration authority and tax authority, the Business Registration Office shall handle it as follows:
- Issue a written notice of the violation and request the legal representative of the enterprise to come to the headquarters of the Business Registration Office to explain;
- After 10 working days from the end of the deadline in the notice, if the explanation is not accepted or the business representative does not come, the Business Registration Office shall issue a decision to revoke the business registration certificate.
Note:
To avoid having the business registration certificate revoked in this case, the enterprise should send a notice of temporary suspension of business to the Business Registration Office where the enterprise is headquartered at least 3 days before the date of temporary suspension of business.
In addition, in case the enterprise wants to resume operations before the announced deadline, it must register its operations with the Department of Planning and Investment at least 3 days before the date of resumption of operations. Otherwise, it may be fined from 10,000,000 to 15,000,000 VND.
Or if there is a need to continue to suspend business after the expiration of the period, at least 3 working days before the date of continued suspension, the enterprise must also send a notice to the Business Registration Office. Enterprises should note that the period of suspension of business for each notice cannot exceed one year.
>> Reference: Procedures for temporary suspension of business.
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In case a business wants to carry out temporary business suspension procedures but does not know what documents need to be prepared, what the implementation process is or which unit will handle this procedure? Then let fdiinvietnam.com’s temporary business suspension service help you solve everything from A to Z including: Drafting documents and handling all legal procedures with a total cost of only 700,000 VND – completing temporary business suspension procedures in 3 – 4 working days.
Case 4: Not submitting reports to the business registration authority as prescribed
Enterprises do not submit reports on compliance with the provisions of the Law on Enterprises 2020 to the business registration authority within 6 months from the deadline for submitting reports, or from the date of receipt of a written request from the business registration authority.
➨ The Business Registration Office will then proceed as follows:
- Within 10 working days from the deadline for submitting the report, the Business Registration Office shall send a written notice of the violation and request the legal representative of the enterprise to come to the headquarters to explain;
- After 10 working days from the end of the deadline in the notice, if the explanation is not accepted or the business representative does not come, the Business Registration Office shall issue a decision to revoke the business license.
Note:
To avoid having their business registration certificates revoked, businesses should note:
- Submit periodic reports on compliance with the Enterprise Law 2020 to the Business Registration Office within the prescribed time limit;
- It is mandatory to submit a report as prescribed upon receipt of a written request from a competent authority.
Case 5: Other cases
Other cases of revocation of business registration certificates are carried out according to court decisions or requests of competent authorities as prescribed by Vietnamese law.
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After receiving the decision to revoke the business registration certificate, the enterprise is required to carry out dissolution procedures according to the provisions of Article 209 of the Enterprise Law 2020, except in cases where the enterprise’s business registration certificate is revoked to implement coercive measures at the request of the tax authority.
>> Reference: Company dissolution procedures.
Regulations after revocation of business registration certificate
1. In which cases is legal status restored after the business registration certificate is revoked?
Not all cases can restore the legal status of a business after its business license is revoked. This only happens if the revocation document of the Business Registration Office is not sufficient or if there is a decision to cancel the revocation of the business license from the competent authority.
The Business Registration Office shall cancel the decision to revoke the business registration certificate if the enterprise falls into one of the following two cases:
- Case 1: After review and inspection, the Business Registration Office determines that the enterprise is not subject to revocation of its business registration certificate, and will restore the company’s legal status on the National Business Registration Information Portal;
- Case 2: The tax authority sends a document to the Business Registration Office requesting to restore the legal status of the enterprise after enforcing the tax debt of the enterprise (in case the enterprise has not been transferred to the status of dissolved enterprise on the National Business Registration Information System).
Thus, except for the above two cases, all other cases will not have their legal status restored after their business registration certificate is revoked.
2. Can a business continue to operate after its license is revoked?
Enterprises are allowed to resume business after completing business registration procedures (establishing a new company) but are not allowed to continue doing business after their license is revoked.
However, in some cases, specifically the two cases that fdiinvietnam.com mentioned above, businesses do not need to re-register but have their legal status restored by the Business Registration Office.
Pursuant to Clause 4, Article 46 of Decree 122/2021/ND-CP, if an enterprise continues to conduct business after its business registration certificate has been revoked, it will be subject to an administrative fine of VND 50,000,000 – VND 100,000,000.
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To quickly complete the procedure for registering a new business, receiving a license and continuing business activities, you can refer to the company establishment service at fdiinvietnam.com with a total cost of only 1,000,000 VND – business license delivered to your door after 3 – 5 working days.
Some frequently asked questions about revoking business registration certificates
1. In what cases is the business registration certificate revoked?
Pursuant to Article 212 of the 2020 Enterprise Law, an enterprise will have its business registration certificate revoked if it falls into one of the following five cases:
- Case 1: Violation of regulations on business establishment entities;
- Case 2: The information declared in the company registration dossier is fake;
- Case 3: Suspending business activities for 1 year without notifying the business registration authority and tax authority;
- Case 4: Failure to submit a report on compliance with the Enterprise Law 2020 as prescribed;
- Case 5: Other cases according to the Court’s decision or request of the competent authority.
>> See details: 5 cases of business registration certificates being revoked.
2. In what cases is legal status restored when the business license is revoked?
Enterprises can only restore their legal status if the revocation document of the Business Registration Office is not sufficient or if there is a decision to cancel the revocation of the business license from a competent authority.
3. Will a business have its sub-license revoked after its business registration certificate is revoked?
Yes. Once a business has its business registration certificate revoked, it no longer has legal status, which means the business loses its eligibility to participate in business activities. Therefore, the licensing authority will revoke the sub-license in parallel with the business registration certificate.
4. Can a business resume operations after its business license is revoked?
Enterprises are allowed to resume business after completing the procedures for registering a new business license, but are not allowed to continue doing business after the license is revoked.
>> Reference: Company establishment procedures at fdiinvietnam.com.
5. If a business continues to operate after its license is revoked, how will it be handled?
Pursuant to Clause 4, Article 46 of Decree 122/2021/ND-CP, if an enterprise continues to conduct business after its business registration certificate has been revoked, it will be fined from VND 50,000,000 to VND 100,000,000.
6. Which unit has the authority to revoke the business registration certificate?
Pursuant to Article 15 of Decree 01/2021/ND-CP, the Business Registration Office has the duty and authority to revoke business registration certificates, branch and representative office registration certificates in accordance with the provisions of law.
7. Is a business whose business license is revoked forced to dissolve?
After receiving the decision to revoke the business registration certificate and business license, the enterprise must carry out dissolution procedures according to the provisions of Clause 1, Article 207 of the Law on Enterprises 2020, except for cases otherwise provided for in the Law on Tax Administration.
>> Reference: Business dissolution procedures.
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