VI The termination of a branch’s operation is a significant legal procedure, marking the end of a business extension for the enterprise. This decision is not merely about closing a location; it entails a series of complex obligations that the enterprise must strictly comply with according to current legal regulations. Non-compliance or shortcomings in the execution can lead to unnecessary legal risks and penalties. Let Pham Consult guide you through the necessary steps to complete this process smoothly and in full adherence to the law.
- Cases for terminating enterprise branch operations
A branch is a dependent unit of the enterprise, tasked with carrying out all or a part of the enterprise’s functions, including the function of acting as a representative under authorization. Enterprises often choose to open branches to expand their business market and find new customers. However, not all branches operate successfully. If, after a period, the branch’s business operations are inefficient or fail to generate revenue, the enterprise should promptly proceed with terminating the branch’s operation.
According to Article 213 of the Law on Enterprises 2020 (amended and supplemented in 2025), an enterprise’s branch shall be terminated in the following cases:
– Termination by decision of the enterprise;
– Termination by decision of the competent State agency to revoke the Certificate of Enterprise Registration and/or the branch’s operation.
During the process of terminating the branch’s operation, the legal representative of the enterprise and the head of the terminated branch are jointly liable for the truthfulness and accuracy of the branch termination application file. The enterprise with a terminated branch is responsible for fulfilling contracts, settling debts, including tax debts of the branch, and continuing to employ or ensuring all legal rights for the employees who worked at the branch in accordance with the law.
- Dossiers for registering the termination of enterprise branch operation
The application file for registering the termination of an enterprise branch’s operation is stipulated in Article 66 of Government Decree 168/2025/ND-CP on enterprise registration, and includes the following documents:
(i) The Notice on the termination of the branch’s operation;
(ii) A copy or the original Resolution or Decision on the termination of the branch’s operation by the owner (for a single-member limited liability company); by the Members’ Council (for a limited liability company with two or more members, or a partnership); or by the Board of Directors (for a joint-stock company) in the event of branch termination.
- Procedure for registering the termination of enterprise branch operation
Step 1: Completing tax obligations and terminating tax identification number (tin) at the tax agency
Before registering the termination of the branch’s operation, the enterprise and the branch must complete procedures with the Tax Agency to fulfill tax obligations and terminate the validity of the Tax Identification Number (TIN) in accordance with tax law.
Step 2: Submitting the dossiers
Within 10 days from the date of the decision to terminate the branch’s operation, the enterprise shall send the branch termination dossiers to the Provincial-level Business Registration Authority where the branch is located.
Step 3: Application review
After receiving the branch termination dossiers, the Provincial-level Business Registration Authority shall send information about the branch’s termination to the Tax Agency. Within 02 working days from the date of receiving the information, the Tax Agency shall send its opinion on the completion of the branch’s tax obligations to the Provincial-level Business Registration Authority.
Within 05 working days from the date of receiving the branch termination application file, the Provincial-level Business Registration Authority shall change the branch’s legal status in the National Business Registration Database to “Terminated Operation” if it does not receive any opinion from the Tax Agency or receives an opinion from the Tax Agency confirming that the branch has completed its tax obligations. Concurrently, it shall issue a notice on the termination of the branch’s operation. If the Tax Agency rejects the process because the branch has not fulfilled its tax obligations as regulated, the Provincial-level Business Registration Authority shall issue a notice to inform the enterprise.
Note: Before terminating the branch’s operation, the enterprise must complete the procedure for terminating the operation of all business locations under the branch at the Provincial-level Business Registration Authority where the business location is situated.
