Options for handling inactive companies: Dissolution, Bankruptcy or Transfer?
In the structure of many Vietnamese conglomerates today, it is not difficult to identify the existence of subsidiary companies that have ceased operations long ago – perhaps remnants of failed investment projects, business lines that have been phased out, or simply the result of incomplete restructuring processes. These legal entities continue to exist on paper, consuming annual maintenance costs, and in many cases, accumulating tax or social insurance debts that go unnoticed until the problem becomes serious. The question arises: how should these legal ‘zombies’ be handled? Vietnamese law provides three main pathways – voluntary dissolution, recovery/bankruptcy proceedings, and transfer of capital contributions or shares. Each option has different conditions for application, implementation procedures, and legal consequences. Choosing the wrong option not only wastes resources but may also lead to legal liability for the legal representative. This article ...