Enterprise dissolution is often considered the “final endpoint” of all legal obligations of the business owner and the legal representative. However, under the Law on Enterprises, the dissolution process only terminates the legal status of the entity and does not automatically end all personal responsibilities of the legal representative. A dissolved enterprise may still have outstanding legal obligations, especially those related to taxes, finance, and the rights of creditors and employees, and these obligations may bind the legal representative.
This article, prepared by DNP Viet Nam Law Firm, provides essential legal information to help enterprises, owners, and legal representatives understand their rights and obligations in the post-dissolution period.
1. What is enterprise dissolution according to the law?
Legal basis: Article 207 of the Law on Enterprises 2020 (as amended and supplemented in 2025).
- Enterprise dissolution is the procedure that terminates the legal status of an enterprise and lawfully ends its business operations after all debts and financial obligations have been fully settled in accordance with the law.
2. Responsibilities of the legal representative after the enterprise has completed dissolution
2.1. Ensuring the accuracy and truthfulness of dissolution documents
Legal basis: Clauses 2 and 3, Article 210 of the Law on Enterprises 2020 (as amended and supplemented in 2025).
- When submitting dissolution documents, the legal representative (owner, Director/General Director, member of the Members’ Council/Board of Directors, etc.) is responsible for the accuracy and truthfulness of the dossier.
- If the dossier contains fraudulent information or conceals debts, employees’ rights, or financial obligations, the legal representative and relevant managers must bear personal liability before the law and be jointly responsible for payment.
2.2. Liability for damages arising from violations
Legal basis: Article 13 and Article 165 of the Law on Enterprises 2020 (as amended and supplemented in 2025).
- If the legal representative breaches the duty of honesty or diligence, or abuses their position for personal gain causing harm to the enterprise, they must bear personal liability for such damages.
- In cases where dissolution is used to evade debts or taxes, disperse assets, or commit document fraud, criminal liability may also arise if the conduct constitutes a serious violation.
2.3. Retention of corporate records, documents, and books
- Although the enterprise has been deregistered, retaining accounting records, tax documents, labor files, contracts, and relevant materials remains crucial to provide when required by inspections or by State authorities or third parties.
- The retention period for accounting documents ranges from 5-10 years, or permanently for certain categories, as prescribed in Decree 174/2016/ND-CP.
Example:
- Company X, represented by Mr. A as its legal representative, completed dissolution procedures in July 2023 and was removed from the business registry. In the dissolution dossier, Mr. A declared that all supplier debts, tax obligations, and social insurance contributions for employees had been fully settled.
- However, in July 2024, a group of former employees discovered that Company X still owed social insurance contributions, and a product supplier proved that the company had not fully paid its contractual debt. Since the enterprise no longer had legal status, the involved parties requested Mr. A, as the legal representative at the time of dissolution, to bear personal liability for the outstanding obligations.
- In this case, under the Law on Enterprises, the act of providing inaccurate financial information in the dissolution dossier resulted in Mr. A being jointly liable for outstanding debts, responsible for compensating damages to employees and partners, and subject to administrative penalties due to fraudulent conduct.
In summary, even after an enterprise completes dissolution procedures, the legal representative may continue to bear personal liability for outstanding obligations or violations arising from the dissolution process. Therefore, dissolution must be conducted honestly, transparently, and in strict compliance with legal requirements. The legal representative must also proactively retain records and be prepared to fulfill responsibilities upon request by State authorities or related parties. This mechanism ensures corporate governance discipline, protects stakeholders’ rights, and prevents the abuse of dissolution procedures in practice.
“The above content is provided by DNP Viet Nam Law Firm for reference purposes only. For detailed, accurate, and tailored legal advice that meets your specific needs, please contact us using the information provided below.”
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