Chapter VII
REORGANIZATION, DISSOLUTION AND BANKRUPTCY OF ENTERPRISES
Article 105.- Division of enterprises
1. Limited liability companies and joint-stock companies may be divided into a number of companies of the same type.
2. The procedures for division of a limited liability company or a joint-stock company are as follows:
a/ The Members’ Council, the owner of the company or the General Assembly of Shareholders of the to be-divided company shall approve a decision to divide the company in accordance with the provisions of this Law and the Charter of the company. The decision on division of a company shall contain the following principal details: the current name and office of the company; the number of companies to be established; the principles and procedures for division of assets of the company; the plan for employment of laborers; the time limit and procedures for transfer of shares of equity, shares and bonds of the divided company to the newly-established companies; the principles for dealing with the obligations of the divided company; and the time limit for effecting the division of the company. The decision on division of the company shall be sent to all creditors and notified to the laborers within fifteen days from the date it is approved;
b/ Members, owners or shareholders of newly-established companies shall approve the Charter, elect or appoint the Chairmen of their respective Members’ Councils, Chairmen of the companies, the Boards of Management, Directors (General Directors); and register business in accordance with this Law. In this case, the business registration dossiers shall include the decision on division of the company as prescribed in Point a of this Clause.
3. After the new companies have registered their business, the divided company ceases to exist. The new companies shall be jointly liable for the outstanding debts, labor contracts and other property obligations of the divided company.
Article 106.- Separation of enterprises
1. A limited liability company or a joint-stock company may be separated by transferring part of the assets of the existing company (hereinafter referred to as the separated company) to establish one or more new companies of the same type (hereinafter referred to as the separating company); transferring a part of the rights and obligations of the separated company to the separating company(ies) without terminating the existence of the separated company.
2. The procedures for separation of limited liability company or a joint-stock company are stipulated as follows:
a/ The Members’ Council, the owner or the General Assembly of Shareholders of the separated company shall approve a decision to separate the company in accordance with the provisions of this Law and the Charter of the company. The decision on separation of the company shall contain the following principal contents: the name and office of the separated company; the number of separating companies to be set up; the plan for employment of laborers; the value of assets, rights and obligations to be transferred from the separated company to the separating company(ies); and the time limit for effecting the separation of the company. The decision on separation of the company shall be sent to all creditors and notified to the laborers within fifteen days from the date it is approved;
b/ Members, owners or shareholders of the separating company(ies) shall approve the Charter, elect or appoint the Chairman of the Members’ Council, Chairman of the company, the Board of Management, Director (General Director); and register business in accordance with this Law. In this case, the business registration dossier shall include the decision on separation of the company as prescribe in Point a of this Clause.
3. After the business registration, the separated company and the separating company(ies) shall be jointly liable for the outstanding debts, labor contracts and other property obligations of the separated company.
Article 107.- Consolidation of enterprises
1. Two or more companies of the same type (hereinafter referred to as consolidating companies) may be consolidated into a new company (hereinafter referred to as the consolidated company) by way of transferring all lawful assets, rights, obligations and interests to the consolidated company and at the same time, terminating the existence of the consolidating companies.
2. The procedures for consolidation of companies are stipulated as follows:
a/ Consolidating companies shall prepare a consolidation contract. The consolidation contract shall contain the following principal contents: the names and offices of the consolidating companies; the name and office of the consolidated company; the consolidation procedures and terms; the plan for employment of laborers; the time limit, procedures and conditions for conversion of assets; for conversion of shares of equity, shares and bonds of the consolidating companies into those of the consolidated company; the time limit for effecting the consolidation, and the draft Charter of the consolidated company;
b/ Members, owners or shareholders of the consolidating companies shall approve the consolidation contract, the Charter of the consolidated company, elect or appoint the Chairman of the Members’ Council, Chairman of the company, the Board of Management, the Director (General Director) of the consolidated company; and register the business of the consolidated company in accordance with this Law. In this case, the business registration dossier shall include the consolidation contract. The consolidation contract shall be sent to all creditors and notified to laborers within fifteen days from the date it is approved.
3. The consolidating companies shall cease to exist after the business registration. The consolidated company shall enjoy the lawful rights and interest and be liable for the outstanding debts, labor contracts and other property obligations of the consolidating companies.
Article 108.- Merger of enterprises
1. One or several companies of the same type (hereinafter referred to as the merged companies) may be merged into another company (hereinafter referred to as the merging company) by way of transferring all lawful assets, rights, obligations and interests to the merging company and at the same time, the merged companies shall cease to exist.
2. The procedures for merger of companies are stipulated as follows:
a/ The involved companies shall prepare a merger contract and charter of the merging company. The merger contract must contain the following principal contents: the name and office of the merging company; the name(s) and office(s) of the merged company(ies); the procedures and terms for the merger; the plan for employment of laborers; the time limit, procedures and conditions for conversion of assets; for conversion of shares of equity, shares and bonds of the merged company(ies) to shares of equity, shares and bonds of the merging company; and the time limit for effecting the merger.
b/ Members, owners or shareholders of involved companies shall approve the merger contract and the Charter of the merging company; and register the business of the merging company in accordance with this Law. In this case, the business registration dossier shall include the merger contract. The merger contract shall be sent to all creditors and notified to the laborers within fifteen days from the date it is approved.
c/ After the business registration, the merging company shall enjoy the lawful rights and interests and be liable for the outstanding debts, labor contracts and other property obligations of the merged companies.
Article 109.- Conversion of companies
Limited liability companies may be converted to joint-stock companies and vice versa. The procedures for converting limited liability companies or joint-stock companies (hereinafter referred to as converting companies) respectively to joint-stock companies or limited liability companies (hereinafter referred to as converted companies) are stipulated as follows:
1. The Members’ Council, owners or the General Assembly of Shareholders shall approve a decision on conversion and the charter of the converted company. The decision on conversion must contain the following principal contents: the name and office of the converting company; the name and office of the converted company; the time limit and conditions for conversion of assets, shares of equity, shares and bonds of the converting company to assets, shares of equity, shares and bonds of the converted company; the plan for employment of laborers; and the time limit for effecting the conversion.
2. The decision on conversion shall be sent to all creditors and notified to the laborers within fifteen days from the date it is approved.
3. The business of the converted company shall be registered in accordance with the provisions of this Law. In this case, the business registration dossier shall include the conversion decision.
After the business registration, the converting company shall cease to exist. The converted company shall enjoy all the lawful rights and interests and be liable for the outstanding debts, labor contracts and other property obligations of the converting company.
Article 110.- Conversion of one-member limited liability companies
1. Where a company owner assigns a part of the charter capital to another organization or individual, within fifteen days from the date of assignment, the company owner and the assignee must register the change in the number of members with the business registration body. From the date of registration of the change stipulated in this Clause, the company shall be managed and shall operate in accordance with the provisions regarding limited liability companies with two or more members.
2. Where a company owner assigns the entire charter capital to one individual, within fifteen days from the date of completion of the procedures for assignment, the company owner must request the business registration body to remove the name of the company in the business register, and the assignee must register the business as a private enterprise in accordance with the provisions of this Law. The assignee shall assume all obligations and all lawful rights and interests of the limited liability company, except otherwise agreed by the company owner, the assignee and the creditors of the company.
Article 111.- Cases of dissolution of enterprises
1. The operational duration stated in the Charter expires and there is no decision to extend.
2. By decisions of the enterprise owners, for private enterprises; of all partnership members, for partnerships; of the Members’ Council or company owners in case of limited liability companies; of the General Assembly of Shareholders, for joint-stock companies.
3. The company does not have the minimum number of members stipulated in this Law for a consecutive period of six months.
4. The business registration certificate is revoked.
Article 112.- Procedures for dissolution of enterprises
The dissolution of enterprises shall be carried out in accordance with the following provisions:
1. A decision on the dissolution of an enterprise is approved in accordance with the provisions of this Law. The decision on dissolution of an enterprise must contain the following principal contents:
a/ Name and office of the enterprise;
b/ Reasons for dissolution;
c/ Time limit and procedures for liquidating contracts and paying debts of the enterprise; the time limit for debt payment and contract liquidation shall not exceed six months from the date the decision on dissolution is approved;
d/ Plan for dealing with obligations arising from labor contracts;
e/ Establishment of an asset liquidation group whose rights and duties shall be stipulated in an appendix to the dissolution decision;
f/ Signature of the legal representative of the enterprise.
2. Within seven days after being approved, the decision on dissolution shall be sent to the business registration body, all creditors, persons having related rights, obligations and interests, and to laborers in the enterprise. This decision must be publicly posted at the head office of the enterprise and published in three consecutive issues of a local newspaper or a central daily.
The decision on dissolution must be sent to creditors together with notice on the settlement of the debts. Such a notice shall include the name and address of the creditor; the amount of the debt, the time limit, location and method of paying such debt; the method and time limit for dealing with complaints of creditors.
3. Liquidating the assets and paying the debts of the enterprise.
4. Within seven days after all the debts of the enterprise are fully paid, the liquidation group shall have to send the dossiers related to the dissolution of the enterprise to the business registration body.
Within seven days from the date of receipt of the dossiers related to the dissolution of the enterprise, the business registration body shall remove the name of the enterprise from the business register.
5. Where the business registration certificate of an enterprise is withdrawn, the enterprise must be dissolved within six months from the date of withdrawal of the business registration certificate. The order and procedures for dissolution shall comply with the provisions in this Article.
Article 113.- Bankruptcy of enterprises
The bankruptcy of enterprises shall comply with the legislation on business bankruptcy.
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Luật Doanh nghiệp 1999 (Bản Word)