In the context of an increasingly developed economy, looking up information about the operating status of a business has become an important step for many individuals and organizations that requires many skills. However, not everyone understands the risks that incomplete or inaccurate searches can bring. This article will help you better understand these risks and guide you on how to avoid these unnecessary risks.
Problem
Difficulty in finding reliable sources of information
Many businesses are not truly transparent in providing financial, accounting and business information. At the same time, the data provided may be incomplete, inaccurate or not updated regularly, making it difficult to evaluate and verify.
The operating status of a business can be compared to the health status of a person, reflecting the existence and development of the business in the eyes of the law. Every business, from its establishment to its cessation of operations, goes through different stages. According to the provisions of Article 41 of Decree 01/2021/ND-CP on business registration, a business can be in one of the following legal statuses:
[1] Temporary suspension of business: is the legal status of an enterprise that is temporarily suspending business operations as prescribed in Clause 1, Article 206 of the Law on Enterprises.
[2] No longer in business at the registered address: is the legal status of an enterprise that, through inspection and verification by the Tax Administration and relevant units, cannot be found at the registered address. The Business Registration Authority records and updates the legal status provided by the Tax Administration into the National Database on Business Registration.
[3] Business registration certificate revoked due to tax administration enforcement: is the legal status of an enterprise whose Business Registration Certificate has been revoked by the Business Registration Office upon request of the tax authority to implement measures to enforce administrative decisions on tax management.
[4] In the process of dissolution, has been divided, merged, or consolidated: is the legal status of the business
- has a resolution or decision to dissolve according to Clause 3, Article 208 of the Law on Enterprises; the enterprise has had its Business Registration Certificate revoked by the Business Registration Office, except in cases where the enterprise has its Certificate revoked due to tax administration enforcement;
- The enterprise is dissolved by a court decision under Clause 1, Article 209 of the Law on Enterprises;
- Enterprises that have been divided, merged, or acquired and are carrying out procedures for settlement and transfer of tax obligations to the Tax Authority due to division, merger, or acquisition.
[5] In bankruptcy proceedings: is the legal status of an enterprise that has had a decision to open bankruptcy proceedings by the Court according to the provisions of the law on bankruptcy.
[6] Dissolved, bankrupt, ceased to exist: is the legal status of the business
- has completed the dissolution procedures as prescribed and has had its legal status updated by the Business Registration Office in accordance with Clause 8, Article 208 and Clause 5, Article 209 of the Law on Enterprises;
- Enterprises with a court decision declaring bankruptcy in accordance with the provisions of the law on bankruptcy;
- Enterprises that cease to exist due to division, consolidation or merger according to Clause 5, Article 198, Clause 5, Article 200, Clause 4, Article 201 of the Law on Enterprises.
[7] Active: is the legal status of an enterprise that has been granted a Certificate of Business Registration but is not in the legal status as in the above cases.
Affect
Consequences of incomplete and deficient determination of business performance
If you don’t do your due diligence on a business’s status, you could be putting yourself at serious risk. First, misjudging the status of a business can cost you time and money trying to contact a business that has gone out of business or is suspended.
Second, when you invest in a business that is struggling to stay afloat, there is a high risk that you may not get paid on time or lose your investment if the business goes bankrupt.
Finally, reputational and trust risks are also very high when cooperating with a business that has a history of changing legal representatives many times, frequently moving business locations, or changing operating status many times, all of which are signs of instability.
Failure to recognize legitimate sources of information and use them
Using inaccurate and unreliable information puts future investment or strategic planning at risk. When biased data creeps into decision-making, individuals and businesses may make incorrect perceptions or conclusions, contributing to unnecessary potential risks.
Solution
Instructions on how to check the operating status of a business - Easy and effective
Use the National Business Registration Portal or the General Department of Taxation's Electronic Information Portal: This is a reliable source of information to look up information about the business's operating status, legal representative, and other information.
Method 1: Look up dissolved businesses on the National Business Registration Portal.
Step 1: Go to National electronic portal on business registration
Step 2: Enter the business name or business tax code in the search bar to look up the business status information.
Method 2: Look up the business location of the enterprise through the website of the General Department of Taxation of Vietnam.
Step 1: Visit the page Taxpayer information lookup of the General Department of Taxation's Electronic Information Portal.
Step 2: Customers click on the Company Name displayed in the Lookup Information Table.
Step 3: The search results will be displayed as in Image 5. Customers select “Representative Office” in the lower right corner of the screen.
Step 4: The search results will be displayed as shown in Image 6 below.
Checking the status of a business is an important step to increase transparency, accountability, regulatory compliance, process optimization and cost savings, thereby bringing efficiency in business transactions. Compliance with legal regulations and industry standards is how businesses and individuals ensure the building of a solid, long-term reputation.
By doing thorough research, you can avoid many risks, help stakeholders understand the business situation and protect your interests. Don't let subjectivity and carelessness affect your progress to success.
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