Chapter VI
REORGANIZATION, DISSOLUTION OR BANKRUPTCY OF COOPERATIVES
Article 39.- Division and separation of cooperatives
The congress of cooperative members shall decide on the division or separation of a cooperative into two or more cooperatives.
Article 40.- Procedures for dividing or separating cooperatives
1. The Managing Board of the to be-divided/separated cooperative must:
a/ Set up a Council to settle the division or separation of the cooperative. The Council for division/separation shall be composed of the Managing Board of the to be-divided/separated cooperative and representatives of the new cooperatives to be formed from the divided/separated cooperative. The Council shall have the tasks to discuss and negotiate to reach agreement on settling matters related to the division or separation of the cooperative; compile dossiers of application for division or separation of the cooperative; and form the managerial and executive apparatuses of the new cooperatives;
b/ Elaborate plans on handling of assets, capital, funds, organizational structure, personnel, cooperative members and labor (including those of branches, representatives offices and dependent enterprises of the cooperative) upon the division or separation; draw up production/business orientations; the charters of new cooperatives; rights, interests, responsibilities and obligations of the cooperatives after the division or separation;
c/ Convene the congress of cooperative members to decide on the matters prescribed at Point b of this Clause; perform the tasks prescribed in Clauses 2 and 3, Article 11 of this Law;
d/ Inform in writing creditors as well as organizations and individuals having economic relations with the cooperative of the decision on the division/separation, and settle economic issues related to them;
dd/ Send the business registration dossier of the divided/separated cooperative made according to the provisions of this Law to the agency which has granted the business registration certificate, enclosed with the resolution of the congress of cooperative members on the division or separation of the cooperative; plans for settlement of issues related to the division or separation already discussed with creditors as well as organizations and individuals having economic relations with the cooperative.
2. Within fifteen days after receiving the division/separation dossiers, the business registration agency which has granted the business registration certificate shall announce in writing the approval or disapproval of the division or separation of the cooperative. If the cooperative disagrees with the decision on the disapproval of the division or separation, it may lodge its complaints to the competent State body or initiate a lawsuit at court according to law provisions.
The business registration agency which has granted the business registration certificate to the to be-divided cooperative must withdraw the business registration certificate from such cooperative after the division; The divided cooperative must submit immediately its seal to the competent State body.
3. The cooperatives having branches, representative offices or dependent enterprises must, upon their division/separation, notify the business registration agencies of the continuity or termination of operation of their branches, representative offices or dependent enterprises.
Article 41.- Consolidation and merger of cooperatives
1. Two or more cooperatives may be consolidated into one new cooperative by transferring all assets, rights, obligations and legitimate interests to the consolidating cooperative, and at the same time terminating the existence of the consolidated cooperatives.
One or several cooperatives may be merged into another cooperative by transferring all assets, rights, obligations and legitimate interests to the merging cooperative, and at the same time terminating the existence of the merged cooperative(s).
2. Procedures for consolidation of cooperatives shall comply with the following regulations:
a/ The Managing Boards of the consolidated cooperatives must together set up the Consolidation Council to project the name and head-office of the consolidating cooperative; the consolidation procedures and conditions; plans on handling of assets, capital, debts, cooperative members, labor and unsettled issues transferred by the consolidated cooperatives to the consolidating cooperative; draft production/business plans and charter of the consolidating cooperative;
b/ To convene the congress of cooperative members of the consolidating cooperative to decide on the consolidation and adopt issues prescribed at Point a of this Clause;
c/ To compile business registration dossiers of the consolidating cooperative according to the provisions of Article 13 of this Law and send them to the business registration agency;
d/ To inform in writing creditors as well as organizations and individuals having economic relations with the cooperative of the decision on consolidation and modes of settlement of economic relations related to them;
dd/ Within fifteen days after receiving the consolidation dossiers, the business registration agency must announce in writing the approval or disapproval of the consolidation and grant the business registration certificate to the consolidating cooperative. If the cooperative disagrees with the business registration agency's decision, it may lodge its complaints to the competent State body or initiate a lawsuit at court according to law provisions;
e/ After business registration, the consolidating cooperative shall have the rights and legitimate interests, bear responsibility for the unsettled debts, labor contracts and other property obligations of the consolidated cooperatives.
3. The procedures for the merger of cooperatives shall comply with the following regulations:
a/ The Managing Boards of the merging and merged cooperatives must together set up the Merger Council to project the merger procedures and conditions; plans on handling of assets, capital, debts, cooperative members, labor and unsettled issues of the merged cooperative; draft production/business plans and charter of the merging cooperative;
b/ To convene the congress of cooperative members with the participation of members of the merging and merged cooperatives to decide on the issues prescribed at Point a of this Clause;
c/ To notify in writing creditors as well as organizations and individuals having economic relations with the cooperative of the decision on merger and modes of settlement of economic relations related to them;
d/ To send the merger applications and records as well as the cooperative's charter to the business registration agency for supplementation of dossiers of the merging cooperative. Within fifteen days after receiving the merger dossiers, the business registration agency must announce in writing the approval or disapproval of the merger. If the cooperative disagrees with the business registration agency's decision, it may lodge its complaints to the competent State body or initiate a lawsuit at court according to law provisions;
dd/ After supplementing the business registration dossiers, the merging cooperative shall have the rights and legitimate interests, bear responsibility for unsettled debts, labor contracts and other property obligations of the merged cooperatives.
Article 42.- Dissolution of cooperatives
The dissolution of cooperatives is prescribed as follows:
1. Voluntary dissolution:
In case of voluntary dissolution under the resolution of the congress of cooperative members, a cooperative must send the application for dissolution and the resolution of the congress of cooperative members to the business registration agency which has granted the business registration certificate to the cooperative, and at the same time publish the dissolution application and time limits for settlement of debts and liquidation of contracts on the newspaper of the locality where it conducts operation for three consecutive issues.
Within thirty days after the expiry of the time limit for settlement of debts and liquidation of contracts, the application-receiving business registration agency must announce the approval or disapproval of the cooperative's application for dissolution.
Within thirty days after receiving the announcement on the approval of the dissolution from the business registration agency, the cooperative must handle capital and assets according to the provisions of Article 36 of this Law, pay expenses for the dissolution, return contributed capital, and settle interests of cooperative members according to the provisions of the cooperative's charter;
2. Compulsory dissolution:
The People's Committee of the locality where the business registration certificate is granted may decide on the compulsory dissolution of a cooperative in one of the following cases where:
a/ Within twelve months after being granted the business registration certificate, the cooperative fails to conduct its operation;
b/ The cooperative have ceased its operation for twelve consecutive months;
c/ The cooperative fails to convene a regular congress of cooperative members without plausible reasons for eighteen consecutive months;
d/ Other cases as prescribed by law;
3. The People's Committee which issues the decision on dissolution shall set up the Dissolution Council and designate the Council chairman to organize the dissolution of the cooperative.
The Council for dissolution of the cooperative must publish the decision on the dissolution of the cooperative on a newspaper of the locality where the cooperative conducts its operation for three consecutive issues; announce the order, procedures and time limits for settlement of debts and liquidation of contracts, and handle capital and assets according to the provisions of Article 36 of this Law, return contributed capital and settle cooperative members' other relevant interests according to the provisions of the cooperative's charter.
The time limit for settlement of debts and liquidation of contracts shall be one hundred and eighty days at most after the first publication on newspapers.
4. After the cooperative receives the dissolution notice, the business registration agency which has granted the business registration certificate must withdraw the business registration certificate and delete the name of the cooperative from the business registration book; the cooperative must immediately submit its seal to the competent State body;
5. If the cooperative disagrees with the People's Committee's decision on the dissolution of the cooperative, it may lodge its complaints to the competent State body or initiate a lawsuit at court according to law provisions.
Article 43.- Settlement of the cooperative's request to declare bankruptcy
The settlement of the cooperative's request to declare bankruptcy shall comply with the law provisions on bankruptcy.
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