BUSINESS HOUSEHOLD SUSPENSION AND SOME NOTABLE POINTS

A business household is a business model still widely used by individuals and family households. When the economy fluctuates, leading to the business not growing or due to other objective reasons, business households often choose to suspend instead of terminating their business operations. To temporarily suspend business, business households need to comply with relevant laws to avoid arising risks. Here are some of our consulting information related to the above issue.

1. What is a business household?

According to the provisions of Article 79 of Decree 01/2021/ND-CP of the Government, a business household is established by an individual or members of the family household and responsible for all its assets for the business operation.

In case a business household is established by members of a family household, one of them shall be authorized as the representative of the household business. The individual registering business households, the person authorized by household members as the business household representative is the owner of the business household.

2. Procedures for notification of business suspension

Step 1: Submitting a dossier for notification of business suspension

Business household sends a set of the dossier to the district-level Business Registration Office where the business household is located its business location for at least 03 days working before suspending business.

The dossier includes:

• Notification of business household's suspension;

• Minutes of the meeting of household members on business suspension (in case family household members register business household);

• Power of attorney to carry out the business suspension procedure (in case it is done by a person other than the representative of the business household).

Step 2: The Business Registration Office examine the dossier

Within 03 working days from the date of receipt of the valid dossier, the Business Registration Office shall issue a confirmation of the business suspend registration for the business household.

3. Sanctions in case of failure to carry out the procedures for suspending business households

In Article 42 of Decree 50/2016/ND-CP of the Government stipulating specific fines for acts related to the suspension of business households. Specifically:

For the act of suspending business without notifying or not notifying in writing on time to the district-level Business Registration Office where the business household has registered:

• Warning or fine from VND 500,000 to VND 1,000,000;

• Remedies: Forced to send a notification to the district-level Business Registration Office.

A fine ranging from VND 1,000,000 to VND 2,000,000 shall be imposed for suspending business activities for more than 06 consecutive months without notifying the district-level Business Registration Office.

Note: This sanction applies to individuals

4. Some notes when suspending business

• In case of business suspension for less than 30 days, business households do not need to carry out notification procedures.

• In case of business suspension for 30 days or more, in addition to notifying the district-level Business Registration Office, the business household must submit a dossier to the tax agency directly management.

• The current law no longer stipulates the maximum duration of business suspension for household businesses.

• To resume business before the notified terms, the business household shall send a written notification to the district-level Business Registration Office where the business household has registered at least 03 working days before continuing business.

ADK Vietnam Lawyers