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THE MINISTRY OF
FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 25/TC-TCDN
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Hanoi, May 15,
1997
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CIRCULAR
GUIDING THE ORDER, PROCEDURES AND PRINCIPLES FOR FINANCIAL
SETTLEMENT WHEN STATE ENTERPRISES ARE DISSOLVED
In furtherance of Article 15 of
Decree No.50-CP of August 28, 1996 of the Government on the establishment,
reorganization, dissolution and bankruptcy of State enterprises, the Ministry
of Finance hereby provides the following guidances on the order, procedures and
principles for financial settlement when State enterprises are dissolved:
I. SUBJECTS
OF APPLICATION:
This Circular shall apply to
State enterprises which are declared dissolved, including: State corporations, member
enterprises of State corporations with independent cost-accounting, independent
State enterprises (hereinafter referred to as the enterprises) as defined in
Articles 1 and 2 of the Law on State Enterprises.
II.
PROCEDURES FOR THE DISSOLUTION OF AN ENTERPRISE:
1. Cases where an enterprise is
considered for the dissolution declaration:
An enterprise shall be
considered for its dissolution in the following cases:
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1.2. The business duration,
which is defined in the establishment decision and the business registration
certificate, has expired but the enterprise does not apply for the extension
thereof or is not allowed to extend its business.
1.3. Having suffered from losses
for two consecutive years or more with an amount of cumulative losses equal to
three-fourths of its actual capital, but not to the extent that the enterprise
loses its capability to repay due debts, and though financial measures and
various forms of reorganization have already been applied, the loss situation
has not been overcome.
1.4. The enterprise has been
unable to fulfill the State-assigned tasks for two years or more even after
necessary financial and organizational measures have been applied.
1.5. Even after the financial
measures have been applied, the statutory capital of the enterprise is still
lower than the prescribed capital required by its business line.
2. Procedures for the
dissolution of enterprises:
2.1. When an enterprise falls
into one of the five above-said cases, the person who proposed its
establishment shall sent a written request to the person who has decided its
establishment to issue a decision on its dissolution. If any State functional
agency, while performing its duties, discovers that an enterprise is getting
into the state of inevitable dissolution, it can request the person who
proposed the establishment of the enterprise to request the dissolution of the
enterprise or request the person who has decided the establishment of the
enterprise to issue a decision on its dissolution. In cases where the
enterprise was established under the empowerment of the Prime Minister, the
decision on its dissolution must be also empowered by the Prime Minister. The
written request for the dissolution of the enterprise must clearly state the
reason(s) for the dissolution and be enclosed with a financial statement for
the latest two years of the enterprise proposed to be dissolved.
2.2. Within 15 days after
receiving the written request for the dissolution of the enterprise, the person
competent or authorized to issue a dissolution decision shall have to issue
such decision. If the grounds are deemed insufficient to decide the dissolution
of the enterprise, the decision maker shall have to notify in writing the
person who has requested the dissolution of the enterprise of the reasons for
not deciding the dissolution.
2.3. The decision on the
dissolution of an enterprise must include the following contents:
- The name and address of the
enterprise to be dissolved;
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- The reason(s) for the
dissolution of the enterprise;
- The dissolution plan.
2.4. The decision on the
dissolution of the enterprise shall be sent to the following agencies:
- The person who requests the
dissolution of the enterprise;
- The enterprise to be
dissolved;
- The Ministry of Planning and
Investment
- The Ministry that manages the
economic-technical branch.
Copies of the dissolution
decision shall be sent to the following agencies:
- The agency that manages the
State capital and assets at enterprises in the locality where the enterprises
head office is located;
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- The Statistics Department of
the province or city where the enterprises head office is located;
- The Planning and Investment
Service of the province or city where the enterprise has made its business
registration;
- The Peoples Committee of the
province or city where the enterprises head office is located if the dissolved
enterprise has been established at the proposal of a Ministry, a central branch
or a State corporation.
3. The enterprise dissolution
council:
3.1. The person who has decided
the dissolution of an enterprise shall set up a dissolution council composed of
the following members:
- A representative of the agency
that has decided the establishment of the enterprise (for enterprises
established before the issue of Decree No.50-CP) or a representative of the
agency that has proposed the establishment of the enterprise (for enterprises
established under Decree No.50-CP) who shall act as the Chairman of the
council.
- A representative of the
Planning and Investment agency
- A representative of the
Department for the Management of the State Capital and Assets at Enterprises in
the locality where the enterprises head office is located.
- A representative of the State
Banks office in the province or city where the enterprises head office is
located.
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- A representative of the
dissolved enterprise.
3.2. The dissolution council
shall set up a group of assisting experts who are officials from the agencies
having representatives in the dissolution council. The Chairman of the
dissolution council shall decide the list of assisting experts recommended by
the agencies having representatives in the council.
4. The duties of the dissolution
council:
4.1. To appraise the dossier
proposing the dissolution of the enterprise then submit it to the person
competent to decide the dissolution of the enterprise.
4.2. To receive and manage
books, documents and assets handed over by the dissolved enterprise, make
comparisons to ensure the agreement between figures in the books and those in
reality. In case of a disparity, a report must be made, clearly stating the reason(s)
therefore as well as the responsibilities of collectives or individuals for
each specific case.
4.3. To draw up a list of
creditors and the amount of debt owed to each of them according to the vouchers
sent from the creditors, classifying the debts into secured debts, partially
secured debts and unsecured debts.
4.4. To recover assets of the
dissolved enterprise, including amounts which must be collected, assets which
are being leased, lent or put under others bailment, and those defined in Point
7, Section III below.
4.5. To return assets which the
dissolved enterprise has rented, borrowed or bailed from other enterprises,
organizations and individuals outside the enterprise, provided that the owners
of such assets produce sufficient legal evidence of their ownership over such
assets
4.6. To settle assets of the
dissolved enterprise according to the approved plan.
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4.7. To repay due debts to
creditors by proceeds from the assets of the dissolved enterprise.
4.8. To make final settlement of
account of costs for the dissolution of the enterprise.
III.
PRINCIPLES FOR RESOLVING FINANCIAL MATTERS WHEN AN ENTERPRISE IS DISSOLVED
1. The assets of a dissolved
enterprise are assets under its lawful management and use, including: fixed
assets, current assets, incomplete construction projects, capital contributed
to joint ventures or associations, amounts which must be collected.
The State reserve assets
assigned to the enterprise, and assets leased and borrowed by the enterprise or
entrusted under its bailment shall not be included in the assets of the
dissolved enterprise.
2. As from the date of declaring
the dissolution of the enterprise, all undue debts shall be regarded as due
ones, and the interests thereon shall no longer be accounted.
3. All the dissolved enterprises
assets transferred to units and individuals must be paid at the market price at
the time of transfer.
4. Secured creditors shall
receive all secured assets according to the price determined by the valuation
team. If a creditor refuses to receive, such assets shall be put on an auction
according to current regulations. The proceeds from the auction of secured assets
shall be used for paying the creditors of secured debts; the surplus therefore
shall be included into the assets of the dissolved enterprise while the deficit
shall be considered as unsecured debts and settled like other unsecured debts.
5. Debts paid by the guarantor
of the debtor enterprise shall be considered unsecured debts and be settled
like other unsecured debts.
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6.1. To pay the dissolution
expenses (costs for assets recovery, assignment or sale of assets, allowances
for members of the dissolution Council and its assisting experts)
6.2. To pay the deferred wages,
social insurance, severance allowances and other prescribed interests for
laborers at the dissolved enterprise under labor contracts or collective labor
agreements.
6.3. To pay tax arrears.
6.4. The remainder after
minusing the payments mentioned in Clauses 6.1, 6.2 and 6.3 shall be paid to creditors
of unsecured debts. If the remaining amount is sufficient for the payment to
the creditors, they shall receive in full their credits. If not, the unsecured
debts shall be paid only according to the proportion between the total
remainder and the total amount of unsecured debts owed by the enterprise.
For example:
- The proceeds from the assets
of the dissolved enterprise: 1,600 million
- The expenses for the
dissolution of the enterprise: 100 million
- The deferred wages for the
enterprises workers and employees: 400 million
- The tax arrears: 300 million
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- The remainder used for payment
of unsecured debts is:
1,600
- (100 + 400 + 300) = 800 million
- The proportion between the
total remainder and unsecured debts is:
800
: 1,000 x 100 = 80%
Creditor A who has an unsecured
debt of 100 million shall be paid as follows:
100
million x 80% = 80 million
6.5. The amount left after
minusing the payments mentioned in Clauses 6.1, 6.2, 6.3 and 6.4 shall be
remitted by the dissolution council to the State budget.
7. Within 6 months before the
date of declaring the dissolution of an enterprise, the following acts
committed by the enterprise shall be considered invalid:
- Dispersing the enterprises
assets in any forms;
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- Renouncing the right to claim
receivable amounts;
- Converting unsecured debts
into secured debts;
- Selling assets at a price
lower than their actual value.
The dissolution council shall be
entitled to recover the above-said assets and include them into the enterprises
assets.
When effecting the recovery of
the above-said assets the dissolution council shall produce the decision of its
chairman and clearly explain the reason for recovering the assets to the
concerned parties. All disputes over the recovery of assets of dissolved
enterprises shall be settled by the Court.
IV. ORDER OF
DISSOLVING ENTERPRISES
1. When a dissolution decision
is issued, the dissolved enterprise shall have to publish an announcement on
its dissolution on central and local daily newspapers for three consecutive
issues.
Such announcement shall include
the following contents:
- The name and address of the
dissolved enterprise;
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- The date on which the
enterprise terminates its operations (date of declaring the dissolution);
- Request to claim debts by
creditors.
2. From the date of declaring
its dissolution, the dissolved enterprise shall have to:
2.1. Terminate all business, purchase
and sale activities, the payment of all due debts, the lease, lending and
acceptance of assets entrusted under its bailment;
2.2. Close the account book,
take stock of its assets, match all credits and debits (including receivable
and payable amounts). Make a financial statement as of the time of declaring
the dissolution. Within 30 days after the date of declaring the dissolution,
the dissolved enterprise must complete the financial statement and send it to
the dissolution council;
2.3. Draw up a list of creditors
and debts payable which are classified into secured, partially secured and
unsecured debts, a list of debtors and amounts receivable which are classified
into recoverable and irrecoverable debts.
2.4. Recover all leased and lent
assets and assets put under the others bailment and receivable debts;
2.5. Hand over to the
dissolution council the following:
- Accounting books and other
records and documents of the dissolved enterprise;
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- The list of creditors and the
list of debtors of the enterprise.
The hand-over of assets must be
carried out immediately after the enterprise completes the asset inventory. The
accounting books and lists of creditors and debtors must be handed over
immediately after the financial statement is completed.
3. Within 60 days from the date
the first newspaper announcement on the enterprises dissolution is published,
the creditors shall have to send to the dissolution council their debt claims
enclosed with documents evidencing such debts. The debts must be clearly
indicated as secured, partially secured or unsecured.
Within 15 days from the deadline
for sending debt claims, the dissolution council shall have to make a list of
creditors, compare it to the list of creditors handed over by the enterprise
and post it at the head office of the dissolved enterprise.
Within 10 days from the posting,
the dissolution council shall finalize the list of creditors to serve as the
basis for distributing the assets of the dissolved enterprise.
4. Within 30 days from the date
the first newspaper announcement on the dissolution of the enterprise is
published, the creditors whose assets are leased or borrowed by the dissolved
enterprise or entrusted under its bailment shall have to present documents
evidencing their lawful ownership or management (for State enterprises) so as
to receive back their assets. For an asset leased by the dissolved enterprise
which has paid the rent in full but the lease duration has not yet expired the
lessor must reimburse the rent for the remainder of such duration so as to
receive back his/her asset.
5. The dissolution council shall
recover the assets of the enterprise declared to be dissolved. When so doing,
it shall have to produce the decision to declare the dissolution of the
enterprise. If discovering that the assets of the dissolved enterprise are
misappropriated and not yet included in the list of assets handed over by the
dissolved enterprise, the chairman of the dissolution council shall issue a
decision to recover such assets and organize the recovery.
The dissolution council may
request the concerned State agencies to assist in the recovery of assets.
6. The dissolution council shall
set up a valuation team to determine the value of all assets of the dissolved
enterprise, including pledged and mortgaged assets to serve as the basis for
the auction thereof. The valuation team shall consist of:
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- A representative of the
Finance and Pricing Service of the province or city where the enterprise has
its head office.
- A representative of the
Department for Management of the State Capital and Assets at Enterprises of the
province or city where the dissolved enterprise has its head office.
- Representatives of a number of
concerned agencies as proposed by the chairman of the dissolution council.
The chairman of the dissolution
council shall invite those creditors having secured debts to join the valuation
team to determine the value of assets used as securities for such creditors.
The valuation team shall make
decisions by majority of votes. When the numbers of votes for and against are equal
the vote of the head of the valuation team shall be the decisive .
7. Assets of the dissolved
enterprise shall be auctioned openly according to the Regulation on auctioning
of assets issued together with Decree No. 86-CP of December 26, 1996 of the Government.
If a professional auctioning organization is not available, the dissolution
council shall organize the auction according to the Regulation on auctioning of
assets The sale of assets which are banned or restricted from circulation shall
comply with relevant regulations of the State.
The sale of assets associated
with the land-use right shall comply with the Land Law.
8. Not later than 5 days from
the date a dissolution decision is issued, the chairman of the dissolution
council shall have to open an account at the State Treasury in the locality
where the enterprise has its head office for depositing proceeds from the sale
of the dissolved enterprises assets. The chairman of the dissolution council
shall be the holder of this account.
All the proceeds from the sale
of the dissolved enterprises assets shall be deposited into the account of the
dissolution council immediately on the day they are collected. If the proceeds
are collected at the end of a working day, they shall have to be deposited immediately
on the following working day. Any person who delays in depositing such proceeds
shall pay compensation at the interest rate for non-term savings announced by
the bank and be administratively disciplined depending on the seriousness of
his/her fault.
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The payment may be made in
several installments on the basis of equality and rationality according to the proportion
between the actual value of recovered assets (after minusing all priority
payments) and the total unsecured debts. Each creditor shall receive back their
debts according to the same proportion. If the debt is too small for which the
payment in many installments is deemed unnecessary, the chairman of the
dissolution council may decide to pay it in one or two installments but shall
have to ensure the equality and take responsibility for his/her decision.
10. For a creditor who has an
account at the bank or State Treasury, the chairman of the dissolution council
shall fill in the procedures for depositing the debt payment into the formers
account. If the creditor does not have an account, the chairman of the
dissolution council shall ask the creditor to directly receive the debt
payments or mail it to the creditor. The mailing charge shall be deducted in
the debt payment.
11. Not later than 5 days after
all priority payments are deducted and all debts are paid, any remainder of the
proceeds from the sale of the dissolved enterprises assets shall be remitted
into the State budget.
12. Within seven days after
completing the payment of debts to the creditors, the dissolution council shall
have to make a financial report on the dissolution of the enterprise. The
report shall be sent to the agency which decides the dissolution, the agency
managing the State capital and assets at enterprises in the locality where the
dissolved enterprise has its head office and its superior managing agency (if
any).
The agency managing the State
capital and assets at enterprises shall examine the financial report of the
dissolution council and, if there is no problem therein, issues a decision to
accept the financial statement. In case of any doubt, it shall request the explanation
by the dissolution council before issuing such decision.
13. If the dissolution council
and the team of assisting experts commit the following violations, they shall
be administratively disciplined or examined for penal liability, depending on
the seriousness of the violation, if any damage is caused to the assets,
compensation must be made:
- Making inventory of assets not
faithful to the reality, or not in accordance with the procedures prescribed by
law;
- Making a false or groundless
list of creditors and debts;
- Setting up the valuation team
or organizing the auction at variance with the provisions of law;
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- Illegally using assets of the
dissolved enterprise;
- Failing to apply protection
measures thereby causing losses of the dissolved enterprises assets or
committing acts of causing losses of the dissolved enterprises assets;
- Making false financial
statements upon the completion of the enterprises dissolution;
- Abandoning their duties or
performing their duties improperly, thus obstructing the operation of the
dissolution council or causing losses of the dissolved enterprises assets;
14. The director and the chief
accountant of the dissolved enterprise shall not be moved to other jobs before
the process of dissolving the enterprise is finished.
V. COST OF
THE ENTERPRISE DISSOLUTION
The costs of the dissolution of
an enterprise shall be accounted into the value of the assets of the dissolved
enterprise prior to payment of other costs, including:
1. Expenses on the inventory,
transport, recovery, evaluation, maintenance, and auction of assets and other
expenses in relation to the execution of the decision to dissolve the
enterprise. Such expenses shall be settled according to the actual spendings
approved by the chairman of the dissolution council.
2. Daily remunerations for
members of the dissolution council, the valuation team, team of experts
assisting the dissolution council and people involved in the recovery of the
dissolved enterprises assets, which shall be equal to daily stay allowances
under the State regime on travel allowances.
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This Circular takes effect 15
days after the date of signing for its issue and replaces Circular No.54-TC/CN
of January 13, 1990 of the Ministry of Finance guiding the financial settlement
when State-run enterprises are dissolved. All provisions which are contrary to this
Circular shall cease to be effective.
This Circular shall not apply to
cases of merger, division and splitting of enterprises or transformation of
enterprises into non-business establishments by decision of the competent
levels.
Any problem or difficulty
arising in the course of implementation shall be reported to the Ministry of
Finance for consideration and solution.
FOR
THE MINISTER OF FINANCE
VICE MINISTER
Pham Van Trong