Dissolution
Generally, security can be taken over all types of assets, including objects, money, valuable documents or property rights. However, the obligor must own the asset (except for the cases of lien on property or title retention) and must be identified.
Bankruptcy
Generally, security can be taken over all types of assets, including objects, money, valuable documents or property rights. However, the obligor must own the asset (except for the cases of lien on property or title retention) and must be identified.
Dissolution
This is the dissolution process regulated under Law No. 59/2020/QH14 on Enterprises adopted by the National Assembly on 17 June 2020 ("Enterprise Law"), which will be enacted upon the occurrence of:
- Expiration of the operation term as provided in the company's charter
- Voluntary dissolution decided by the owner of the sole proprietorship, all general partners of the partnership, board of members or owner of the limited liability company, or general meeting of shareholders of the joint-stock company
- Failure to maintain the minimum number of members as required by law for six consecutive months without initiating procedures for business conversion
- Revocation of Enterprise Registration Certificate
Bankruptcy
This is the bankruptcy process regulated by Law No. 51/2014/QH13 on Bankruptcy adopted by the National Assembly on 19 June 2014 ("Bankruptcy Law"). The process may be (and in some cases, it shall be) initiated upon an observation that an enterprise is unable to pay its due debts over a period of three months.
Unsecured or partially secured creditors, employees, internal trade unions (or the superior trade union if the internal trade union is not established), the company itself or groups of shareholders files a petition for a bankruptcy proceeding to the competent court.
The court shall issue a decision on whether to commence a bankruptcy process or not. If the court accepts, the assigned judge shall convene a creditors' meeting (Chapter VI of the Bankruptcy Law) to discuss if the recovery plan of business operations is carried out or declare the entity bankrupt.
Dissolution
There is no solvency requirement. The company can voluntarily be dissolved. However, a company cannot be voluntarily dissolved if it is unable to settle its outstanding debts. In such a case, it may need to go through a bankruptcy proceeding.
Bankruptcy
The enterprise must be unable to pay its due debts over a period of three months. Such insolvency status shall be the legal basis for the commencement of bankruptcy proceedings.
Dissolution
Yes, to define the competent business registration authority and tax authority, the company should submit dossiers for dissolution.
Bankruptcy
Yes, in order to define the jurisdiction of the court.
Dissolution
No.
Bankruptcy
There is no classification for shareholders.
Creditors are classified as (1) secured creditors, (2) partially secured creditors, or (3) unsecured creditors.
Dissolution
In case of voluntary dissolution, the board of members of a limited liability company and a general meeting of shareholders of the joint-stock company must pass a resolution on the company's dissolution.
The resolution will be passed if it receives an affirmative vote representing 75% of the total capital contribution of attending members (for a limited liability company) and 65% of total votes of attending shareholders (for a joint stock company), unless the charter of the enterprise stipulates otherwise (i.e., a different voting threshold).
Bankruptcy
No, shareholders' vote is not required to initiate the bankruptcy process.
Dissolution
No, however, creditors can object to the voluntary dissolution of a company. This is done by filing a petition to the court.
Bankruptcy
Yes. The resolution of the creditor's meeting can be approved by more than half of the total number of the unsecured creditors who are in attendance, representing at least 65% of the value of unsecured debts. The approving ratio can bind minority dissenting creditors.