Chapter VIII
REORGANIZATION, DISSOLUTION AND BANKRUPTCY OF ENTERPRISES
Article 150.- Division of enterprises
1. Limited liability companies and joint-stock companies may be divided into several companies of the same type.
2. Division of a limited liability company or a joint-stock company shall be conducted according to the following procedures:
a/ The Members' Council, the company owner or the Shareholders' Meeting of the to-be-divided company adopts a decision on the division of the company in accordance with the provisions of this Law and the company's charter. Such a decision shall contain the following principal contents: name, address of the head office of the divided company; number of companies formed as a result of such division; principles and procedures for the division of assets of the company; the plan on labor use; the time limit and procedures for the distribution of capital contribution, shares and bonds of the divided company to newly formed ones; principles for the settlement of obligations of the divided company; and duration of such division. Within fifteen days as from the date of its adoption, the company division decision shall be sent to all creditors and notified to employees of the divided company;
b/ Members, owners or shareholders of the newly formed companies adopt the charter thereof, elect or appoint the chairman of the Members' Council, the president of the company, the Management Board, the director or general director, and proceed with business registration as provided by this Law. In this case, the business registration dossier shall be accompanied by the company division decision as provided for at Point a of this Clause.
3. After the completion of business registration of new companies, the divided company shall cease to exist. All newly formed companies shall jointly be liable for outstanding debts, labor contracts, and/or other property liabilities of the divided company or reach agreement with the creditors, customers and employees that one of the newly formed companies shall perform these obligations.
Article 151.- Separation of enterprises
1. A limited liability company or a joint-stock company may be separated by transferring a portion of the assets of the existing company (hereinafter called the separated company) for forming one or several new companies of the same type (hereinafter called the separating company(ies)); and transferring a proportion of rights and obligations of the separated company to the separating company(ies) without terminating the existence of the separated company.
2. Separation of a limited liability or a joint-stock company shall be conducted according to the following procedures:
a/ The Members' Council, the company owner or the Shareholders' Meeting of the to-be-separated company adopts a decision on the separation of the company in accordance with the provisions of this Law and the company's charter. Such a decision shall contain the following principal contents: name, address of the head office of the separated company; name the company formed as a result of such separation; the plan on labor use; asset value, rights and obligations to be transferred from the separated company to the separating companies; and duration of such separation. Within fifteen days as from the date of its adoption, the company separation decision shall be sent to all creditors and notified to employees.
b/ Members, the owner or shareholders of the separating company adopt the charter thereof, elect or appoint the chairman of the Members' Council, the president of the company, the Management Board, the director or general director, and proceed with business registration as provided by this Law. In this case, the business registration dossier shall be accompanied by the company separation decision as provided for at Point a of this Clause.
3. After the completion of business registration, the separated and separating companies shall jointly be liable for outstanding debts, labor contracts, and/or other property liabilities of the separated company, unless otherwise agreed upon by the separated company, separating companies, creditors, customers and employees of the separated company.
Article 152.- Consolidation of enterprises
1. Two or more companies of the same type (hereinafter called the consolidated companies) may be consolidated to form a new company (hereinafter called the consolidating company) by transferring all legal assets, rights, obligations and interests to the consolidating company simultaneously with the termination of the existence of the consolidated companies.
2. Consolidation of companies shall be conducted according to the following procedures:
a/ To be-consolidated companies prepare a consolidation contract. A consolidation contract shall include the following principal contents: names and head offices of the consolidated companies; name and head office of the consolidating company; procedures and conditions for the consolidation; plan on labor use; time limit, procedures and conditions for the conversion of assets, capital contributions, shares and bonds of the consolidated companies into those of the consolidating company; duration of such consolidation; draft of the charter of the consolidating company;
b/ Members, company owners, or shareholders of the consolidated companies shall adopt the consolidation contract, the charter of the consolidating company, elect or appoint the chairman of the Members' Council, the president of the company, the Management Board, the director or general director of the consolidating company; proceed with business registration of the consolidating company as provided for by this Law. In this case, the business registration dossier must be accompanied by the consolidation contract. The consolidation contract must be sent to all creditors and notified to employees within fifteen days from the dale of its adoption;
3. If the consolidating company shall have a market share of between 30% and 50% in the relevant market, the representatives-at-law of the consolidated companies shall report to the competition management agency before the consolidation, unless otherwise provided by the law on competition.
Consolidations resulting in consolidating companies having a market share of more than 50% in the relevant market shall be prohibited, unless otherwise provided by the law on competition.
4. After the completion of business registration of the consolidating company, the consolidated companies shall cease to exist. The consolidating company shall enjoy the legal rights and interests, and be liable for the outstanding debts, labor contracts, and/or other property liabilities of such consolidated companies.
Article 153.- Merger of enterprises
1. One or more companies of the same type (hereinafter called the merged company(ies)) may be merged into another company (hereinafter called the merging company) by transferring all legal assets, rights, obligations and interests to the merging company simultaneously with the termination of the existence of the merged company.
2. Merger shall be conducted according to the following procedures:
a/ Related companies prepare a merger contract and a draft of the charter of the merging company. A merger contract shall include the following principal contents: name and head office of the merging company; name(s) and head office(s) of the merged company(ies); procedures and conditions for the merger; plan on labor use; duration, procedures and conditions for the conversion of assets, capital contribution, shares and bonds of the merged company(ies) into those of the merging company; and duration of such merger;
b/ Members, company owners, or shareholders of related companies shall adopt the merger contract, the charter of the merging company, and proceed with business registration of the merging company as provided for by this Law. In this case, the business registration dossier shall be accompanied by the merger contract. The merger contract must be sent to all creditors and notified to employees within fifteen days from the date of its adoption;
c/ After the completion of business registration of new companies, the merged company(ies) shall cease to exist; the merging company shall enjoy legal rights and interests, and be liable for the outstanding debts, labor contracts, and/or other property liabilities of such merged company(ies).
3. If the merging company shall have the market share of between 30% and 50% in the relevant market, the representative-at-law of the company shall report to the competition management agency before the merger, unless otherwise provided by the law on competition.
Mergers resulting in merging companies having a market share of more than 50% in relevant market shall be prohibited, unless otherwise provided by the law on competition.
Article 154.- Transformation of enterprises
A limited liability company may be transformed into a joint-stock company or vice versa. Such transformation of a limited liability company or a joint-stock company (hereinafter referred to as the transformed company) into a joint-stock company, or a limited liability (hereinafter referred to as the transforming company) shall be made in accordance with the following provisions:
1. The Members' Council, the company owner, or the Shareholders' Meeting shall adopt the decision on the transformation and the charter of the transforming company. A transformation decision shall consist of the following principal contents: name and address of the head office of the transformed company; name and address of the head office of the transforming company; duration and conditions for the transfer of assets and conversion of capital contribution, shares, and bonds of the transformed company into those of the transforming company; plan on labor use; and duration of such transformation.
2. The transformation decision must be sent to all creditors and notified to employees within fifteen days from the date of its adoption.
3. The transforming company shall be registered in accordance with the provisions of this Law. In this case, the business registration dossier shall be accompanied by the transformation decision.
After the completion of business registration, the transformed company shall cease to be exist. The transforming company shall enjoy legal rights and interests, and be liable for the outstanding debts, labor contracts, and/or other property liabilities of the transformed company.
Article 155.- Transformation of one-member limited liability companies
1. Where the owner of a one-member limited liability company transfers part of the company's charter capital to (an)other organization(s) and/or individual(s), such owner and the transferee(s) shall, within fifteen days as from the date of transfer, register the change in the company's number of members with the business registration office. As from the date of registration of such change in the number of members as provided in this Clause, the company shall be managed and operate in accordance with the provisions applicable to limited liability companies with two or more members.
2. Where the owner of a one-member limited liability company transfers the whole of the company's charter capital to an individual, the transferee shall, within fifteen days as from the date of completion of transfer procedures, register the change in the company's owner and organize the management and operation of the company in accordance with the provisions on one-member limited liability company with its owner being an individual.
Article 156.- Business suspension
1. An enterprise has the right to suspend its business after sending a written notice to the business registration office and tax agency on the date it suspends its business and the duration of suspension no later than fifteen days before the date of suspension or restart of its business.
2. The business registration office, the competent state agency shall be entitled to ask the enterprise to suspend its conditional business lines if they discover that the enterprise does not meet all the conditions required by law.
3. During the period of suspension of its business, the enterprise shall have to pay in full the outstanding tax amounts, continue to pay other debts, fulfill the contracts signed with consumers and laborers, unless otherwise agreed upon by the creditors, consumers and laborers.
Article 157.- Cases of and conditions for dissolution of enterprises
1. An enterprise shall be dissolved in the following cases:
a/ The operation duration stated in the company's charter expires without any decision to renew;
b/ A decision made by the enterprise owner, for private enterprises; by all general partners, for partnerships; by the Members' Council or the company owner, for limited liability companies, or by the Shareholders' Meeting, for joint-stock companies;
c/ A company no longer has the minimum number of members as provided for by this Law for six consecutive months;
d/ The business registration certificate is withdrawn.
2. An enterprise shall be dissolved only after paying off all its debts and other property liabilities.
Article 158.- Procedures for dissolution of enterprises
An enterprise shall be dissolved in accordance with the following provisions:
1. Adopting a decision on the dissolution of the enterprise. Such a decision shall have the following principal contents:
a/ Name and address of the head office of the enterprise;
b/ Reasons for the dissolution;
c/ Duration and procedures for liquidation of contracts and payment of the enterprise's debts; such duration for liquidation and payment shall not exceed six months as from the date of adoption of the dissolution decision;
d/ Plans on settling obligations arising from labor contracts;
e/ Full name and signature of the representative-at-law of the enterprise.
2. Owner of a private enterprise, the Members' Council or company's owner, the Management Board shall directly organize the liquidation of enterprise's assets unless otherwise provided for in the company's charter.
3. Within seven working days as from the date of its adoption, the dissolution decision must be sent to the business registration office, all creditors, people with related rights, obligations and interests, and laborers of the enterprise; such decision shall be publicly posted at the enterprise's head office.
If newspaper publishing is required by law, the enterprise dissolution decision must be published in at least three consecutive issues of a printed or electronic newspaper.
The dissolution decision must be sent to creditors together with a notice on the plan on settlement of debts. Such notice shall contain the name and address of the creditors, the amount of debts, the time limit, the place and method of payment of such debts, procedures and duration for settling complaints of creditors.
4. The debts of the dissolved enterprise shall be paid in the following order:
a/ Owed salaries, severance allowance, social insurance as provided for by law, other benefits agreed according to signed collective labor agreements and labor contracts;
b/ Tax debts and other debts.
After paying in full the debts and dissolution expenses, the remaining assets shall belong to private enterprise owners, members, shareholders or the company's owners.
5. Within seven working days as from the date of making full payment of all debts owed by the enterprise, the representative-at-law of the enterprise must send a dossier on its dissolution to the business registration office. The business registration office shall, within seven working days as from the date of receiving the valid dossier, erase the name of the enterprise in its business registration book.
6. Where an enterprise has its business registration certificate withdrawn, such enterprise must be dissolved within six months as from the date of such withdrawal. The order and procedures for dissolution shall comply with the provisions of this Article.
After six months if the business registration office does not receive the dissolution dossier from the enterprise, such enterprise shall be considered dissolved and the business registration office shall delete its name from the business registration book. In this case, the representative-at-law, all members, for limited liability companies, the company's owner, for one-member limited liability companies, all members of the Management Board, for joint-stock companies, and all general partners, for partnerships, shall jointly be liable for unpaid debts and other financial obligations.
Article 159.- Activities prohibited since the issuance of dissolution decisions
Since a decision on dissolution of an enterprise is issued, such enterprise and its managers shall be prohibited from conducting the following activities:
1. Hiding or dispersing assets;
2. Denouncing or reducing the debt-claming rights;
3. Converting unsecured debts into secured debts with the enterprise's assets;
4. Signing new contracts other than contracts to dissolve the enterprise;
5. Pledging, mortgaging, donating or leasing assets;
6. Terminating the performance of already effective contracts;
7. Mobilizing capital in any other forms.
Article 160.- Bankruptcy
The bankruptcy of an enterprise shall comply with the provisions of law on bankruptcy.
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