Reforming the procedures for dissolving businesses.

The procedure for establishing a business is quite easy, but the procedure for dissolution is "extremely difficult." This is the feedback from businesses participating in the 2024 survey on the current state of provision and implementation of administrative procedures for businesses, conducted by the Private Economic Development Research Board (Board IV - under the Prime Minister's Advisory Council on Administrative Procedure Reform).

In a report published earlier this week, Panel IV stated that the procedural processes related to business dissolution or suspension are currently one of the biggest obstacles for businesses, especially small and medium-sized enterprises.

Specifically, businesses report that the procedures related to dissolution or temporary suspension of business operations are longer and more complex than those for business establishment. This complexity stems from the lack of uniformity and consistency in processing procedures among regulatory agencies. A typical example is that even though the General Department of Taxation does not require it, some tax offices still force businesses to resume operations in order to close their tax identification numbers. This causes businesses to incur additional time and costs for tax reporting and other procedures, even when the business is no longer operating.

Furthermore, according to feedback from businesses, they did not receive clear support and guidance from regulatory agencies throughout the dissolution process. Because they had to figure out the procedures themselves, businesses frequently had their applications rejected due to missing documents or procedural errors, further increasing processing time.

The complex, inconsistent, inflexible process, coupled with a lack of support and guidance from regulatory agencies, not only increases dissolution costs but also plunges many businesses into financial difficulties, prolongs processing times, and reduces the motivation to complete the dissolution process. Many businesses are forced to extend their operating period only on paper to avoid dissolution costs, while in reality they are no longer able to operate effectively.

Market competition is fierce; therefore, along with tens of thousands of businesses being established each year, tens of thousands also withdraw from the market through bankruptcy or dissolution, with dissolution being the most common form. According to data from the National Business Registration Portal, in 2024, 21,600 businesses dissolved; and more than 76,100 businesses were awaiting dissolution procedures. The reasons for businesses failing to continue operating are numerous, including inefficient business operations, weak finances, and changing market conditions.

If tens of thousands of these businesses could be dissolved quickly and efficiently, it would not only alleviate the burden on businesses but also benefit the economy as a whole and the business market in particular. For example, a streamlined dissolution process would allow businesses to properly fulfill their legal obligations, thus avoiding future problems. Alternatively, if the dissolution process wasn't too difficult, entrepreneurs could readily experiment with new business models without worrying too much about the complex procedures involved in closing down an unsuccessful business…

The proposed amendments to the 2020 Enterprise Law present an opportunity to review, reform, and streamline business dissolution procedures to make them more convenient, enabling businesses that no longer wish to exist to dissolve and withdraw from the market quickly and legally. This will contribute to building a transparent and healthy business environment, as well as fostering entrepreneurship and innovation in the economy – crucial factors for the private sector to fulfill its mission as a leading growth engine for the country and a pioneering force in the new era.

Netherlands

Source: https://daibieunhandan.vn/cai-cach-thu-tuc-giai-the-doanh-nghiep-post408754.html