During difficult economic times, enterprises having to be dissolved increased rapidly in a short time, especially small and medium enterprises such as One Member Limited Liability Company.

1. In which case is a one-member limited liability company dissolved?

According to Article 207 of the Enterprise Law 2020, a one-member limited liability company will be dissolved if it falls into one of the following cases:

• End of operation term stated in the company’s charter without decision on extension.
• According to the resolution, the decision of the owner of the limited liability company.
• The company no longer meets the minimum number of members as prescribed by this Law for a period of 06 consecutive months without carrying out procedures for transformation of enterprise type.
• The Certificate of Business Registration has been revoked (cases of revocation according to Article 212 of the Enterprise Law 2020, unless otherwise provided for by the Law on Tax Administration.

2. Conditions for dissolution of a one-member limited liability company

Pursuant to Clause 2, Article 207 of the Law on Enterprises 2020, a one-member limited liability company wishing to dissolve must satisfy the following 02 conditions simultaneously:

– Ensure payment of all debts and other property obligations.

Note: The condition is to guarantee payment, not to pay all debts and property obligations.

– One member limited liability company is not in the process of dispute settlement at Court or Arbitration.

3. Procedures for dissolution of a one-member limited liability company

Legal bases: Articles 208 and 209 of the Enterprise Law 2020 and Articles 70 and 71 of Decree No. 01/2021/ND-CP.

Based on the reason for the dissolution of the one-member limited liability company, it is divided into two cases:

3.1. In case of dissolution due to the end of the term of operation or the decision of the company owner

Step 1: Approving the decision to dissolve the one-member limited liability company. A decision on dissolution of a one-member limited liability company must contain the following principal details:

• Name and address of the head office of the one-member limited liability company.
• The reason for the dissolution of the one-member limited liability company.
• Time limit, procedures for contract liquidation and debt payment of the company.
• The plan to handle the obligations arising from the labor contract.
• Full name and signature of the owner of the 1-member limited liability company.

Step 2: Publicly announce the decision to dissolve the one-member limited liability company.

Within 07 working days from the date of approval of the dissolution decision, the 1-member limited liability company shall send a notice to the Business Registration Office where the company’s head office is located. Attached documents:

The owner’s decision to dissolve the one-member limited liability company.
Debt settlement plan (if any).

Step 3: Liquidate the assets of the one-member limited liability company and pay the debt.

The company’s debts are paid in the following order of priority:

• Salary arrears, severance pay, social insurance, health insurance, unemployment insurance as prescribed by law and other benefits of employees under the collective labor agreement and labor contract signed motion.
• Tax debt.
• Other debts.

Step 4: The legal representative of the company sends the enterprise dissolution dossier to the Business Registration Authority within 05 working days from the date of payment of all debts of the enterprise.

3.2. In case of dissolution due to the one-member limited liability company having its Certificate of Business Registration revoked

Step 1: The business registration authority must notify the status of the enterprise undergoing dissolution procedures on the National Business Registration Portal at the same time as issuing a decision to revoke the Certificate of Business Registration.

Step 2: One member limited liability company decided to dissolve.

Time limit for implementation: 10 days from the date the company receives the decision to revoke the Certificate of Business Registration or the decision of the Court.

Step 3: Disclosure of information on dissolution of a one-member limited liability company:

• After issuing the dissolution decision, the one-member limited liability company must send the resolution, dissolution decision and a copy of the decision on revocation of the enterprise registration certificate or a legally effective court decision. be sent to the business registration agency, tax agency, employees in the company.
• For cases where it is required by law to be published in newspapers, the resolution or decision on dissolution of the enterprise must be published in at least 01 printed or electronic newspaper in 03 consecutive issues.
• The company sends the dissolution decision and debt settlement plan to its creditors, persons with related interests and obligations.

Step 4: Liquidate assets, pay debts of the company.

Step 5: Submit the application for dissolution of the one-member limited liability company

Above is Khoa Tin‘s advice on “Conditions and procedures for dissolution of a one-member limited liability company”

In case customers have unclear issues or need to discuss further, please call us immediately at 0983.533.005 for a free consultation.

Best regards./.