No.

Criteria

Bankruptcy

Dissolution

1

Definition

Bankruptcy is a legal status of an insolvent entity that is declared bankrupt by the People’s Court

It is the termination of business activities because the enterprise's objective has been reached or the enterprise is dissolved.

2

Reason

The enterprise is not able to pay due debts.

i. The operation period written in the company’s charter expires without a decision on extension;

ii. The dissolution is decided by Business Owner

iii. The company fails to maintain the minimum number of members prescribed by this Law for 06 consecutive months without following procedures for business conversion

iv. The Certificate of Business registration is revoked.

3

Substance

Judicial procedures, conducted in court, proceed in accordance with the order and procedures prescribed in Law on Bankruptcy 2014

Administrative procedures, decided by the enterprise or state agencies competent

4

Competence

Court decision, conducted in court

The decision of the enterprise or the state agencies competent

5

Conditions

Creditors will be paid debts in accordance with the legal order on the basis of the remaining assets of the enterprises, except for cases that the owner of the private enterprise or the partner of the partnership. If the value of assets is insufficient for payment according to regulations, subjects in the same priority order shall be paid according to the percentage corresponding to the debt amount. Therefore, the bankrupt business can pay off all or can’t pay all debts to the creditors.

The enterprise shall only be dissolved if all debts and liabilities can be settled and the enterprise is involved in any dispute at a court or arbitral tribunal.

6

Asset deal

The liquidation of assets, the division of value is carried out through an intermediary organization (Asset management officer)

The enterprises directly pay debts to creditors and other financial obligations

7

Legal consequences

i. Bankruptcy declaration, termination, remove business information.

ii. Restructuring, change owners

Termination of operation, deletion of business information in business registers

8

Responsibilities of Business Owner

Business owner - manager will be limited business freedom afterwards (ban on business in a certain time ..)

Business owner – managers have no restrictions on business freedom afterwards

9

Procedure

The enterprises fall into bankruptcy -> Sending applications to the Court -> Deciding to initiate bankruptcy process -> Inventory of assets -> Liquidation of assets -> Obligation of related parties -> Declaration of bankruptcy Products

The term of resolution a dissolution is shorter than a bankruptcy case.

Business owner -> submit the dissolution decision to the business registration agency -> Inventory of assets -> Liquidation of assets -> Obligation of related parties -> Business registration agency delete business informations

The term of resolution a bankruptcy is longer than a dissolution.