Dissolving a Company and the Cost of Delay

A company that effectively stopped operating in 2013 may have to spend nearly 100 million Vietnamese dong to complete its dissolution more than a decade later. The striking issue is not simply the amount, but why an unresolved problem could remain in place for so long.

Business owners clearly carry the first responsibility. Entering the market brings obligations involving taxes, accounting, invoices and business registration. Losses or the end of actual operations do not automatically cancel those duties. Legal discipline is necessary, especially to protect companies that continue to comply with the rules.

But effective public administration cannot stop at identifying a violation and imposing a penalty. It should also detect problems early, issue timely warnings and help correct mistakes before they accumulate into larger obstacles. Resolving a violation matters, but preventing a small error from becoming a burden for citizens and the administration is also part of good governance.

The issue is not isolated. Nationwide, about 292,000 businesses have stopped operating without completing procedures to terminate their tax codes or dissolve. More than 325,000 are no longer operating at their registered addresses. With hundreds of thousands of cases outstanding, the problem cannot be viewed only through the conduct of individual business owners. Each inactive legal entity leaves files to manage, data to track and public resources to devote to resolution. It can also burden people who want to return to business but first must settle unresolved matters from years earlier.

Dissolution procedures therefore reflect more than the act of closing a company. A healthy market must make it possible not only to establish businesses, but also to leave transparently, orderly and at reasonable cost. The broader challenge is to move from managing tasks as they arise to governing by results, identifying bottlenecks early and seeing each case through to completion.