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Step 1: Make the decision to temporarily suspend operations.
The business decides to temporarily suspend operations in accordance with its charter or internal regulations.
- Limited Liability Companies, Joint Stock Companies: Hold Board of Directors/General Meeting of Shareholders and issue Resolutions
- Private enterprise: The business owner makes the decisions.
Treatment time: 1-3 days
Step 1: Make the decision to temporarily suspend operations.
The business decides to temporarily suspend operations in accordance with its charter or internal regulations.
- Limited Liability Companies, Joint Stock Companies: Hold Board of Directors/General Meeting of Shareholders and issue Resolutions
- Private enterprise: The business owner makes the decisions.
Treatment time: 1-3 days
Step 1: Make the decision to temporarily suspend operations.
The business decides to temporarily suspend operations in accordance with its charter or internal regulations.
- Limited Liability Companies, Joint Stock Companies: Hold Board of Directors/General Meeting of Shareholders and issue Resolutions
- Private enterprise: The business owner makes the decisions.
Treatment time: 1-3 days
Definition of temporary suspension of business operations
Dividing the business
Suspension of business operations means that a business temporarily ceases all or part of its business activities for a specified period, but still maintains its legal status and may resume operations in accordance with the law.
Separating businesses
Business division is the process of splitting a business into two or more independent businesses, where each newly formed business inherits a portion of the assets, rights, and obligations of the original business.
Business mergers
Business splitting is the process of dividing a business into two or more independent businesses, in which each of the split businesses is transferred all its assets, rights, and obligations according to the agreement or decision of the owner.
Business merger
A business merger is the process by which two or more businesses combine to form a single entity, in which the acquiring business takes over all the assets, rights, and obligations of the participating businesses.
Cases of temporary suspension of operations
According to Article 206 of the 2020 Enterprise Law, businesses may temporarily suspend operations in the following cases:
Comparison of temporary suspension and dissolution/bankruptcy
| Criteria | Pause | Dissolve | Bankrupt |
|---|---|---|---|
| Legal personality | Still maintaining | End | End |
| Execution time | Fast ((<= 10 days) | Average (3-6 months) | Long (6-24 months) |
| Resilience | Easy | Cannot | Possible (difficult) |
Benefits of temporarily suspending operations
Cost savings
Businesses can reduce operating costs during periods of temporary closure, including rent, personnel, and operational expenses, as business operations do not need to be maintained.
Structural time
Temporarily suspending operations provides time for businesses to restructure their organization and personnel, or develop new business plans, in order to prepare for a successful return to operations.
Simple procedure
Compared to methods of dissolution or transfer, temporarily suspending business operations is a quick and less complicated procedure, allowing businesses more flexibility in management.
Maintain your status
During the suspension period, the business retains its legal status, the right to use its seal and tax identification number, and can resume operations when conditions permit without establishing a new business.
