The National Assembly has passed the Law on Recovery and Bankruptcy. The Law takes effect from March 1, 2026.
The Law stipulates the business activities of enterprises and cooperatives after the Court accepts the request.
Accordingly, after the Court accepts the request, businesses and cooperatives will continue business operations, but must be supervised by the Bailiff, the asset management and liquidation enterprise, and the Creditor Representative Board.
In case it is found that the legal representative of the enterprise or cooperative is not capable of operating or the enterprise or cooperative shows signs of violating regulations, according to the proposal of the Creditor Representative Board, Treasury Officer, asset management and liquidation enterprise, the person specified in this Law.
Judges can consider and decide to choose others as legal representatives of enterprises and cooperatives. The Government stipulates the change of legal representatives of state-owned enterprises.
From the date of acceptance of the application for application of recovery procedures, businesses and cooperatives are allowed to freeze tax debts as requested by the Court, and temporarily stop paying to the pension and death fund.
The deadline for freezing tax debts, temporarily stopping contributions to the pension and death funds shall be implemented in accordance with the provisions of law on tax management and law on social insurance.
From the date of acceptance of the request, debts are allowed to continue to be calculated interest but interest payments are temporarily suspended until the Court recognizes the plan to restore business operations or suspend the procedures for restoring business operations, unless otherwise provided by law.
For new debts arising after the date the Court accepts the request for the purpose of recovering enterprises and cooperatives, the interest on that debt is determined according to agreement but not contrary to the provisions of law.
The synchronous transfer of assets, the transfer of part or all of business lines and business operations; the transfer of part or all of enterprises and cooperatives are considered and decided by the creditor conference. The order, procedures, and conditions for asset transfer are implemented in accordance with the law.
The Law on Recovery and Bankruptcy also clearly states that the operation of enterprises and cooperatives is prohibited after the Court accepts the request.
Accordingly, after the Court accepts the request, businesses and cooperatives are not allowed to carry out the following activities:
Concealing, dissipating, giving gifts to property; giving up the right to demand debt; paying the debt arising before the Court accepts the request;
Converting unsecured debts into secured debts or partially secured debts with assets of enterprises and cooperatives; profit sharing, income distribution.
The Law also stipulates that after the Court accepts the request, businesses and cooperatives must report to the Bailiff, the enterprise managing and liquidating assets for supervision before carrying out activities such as:
Activities related to borrowing; pledges, mortgages, guarantees and other measures to ensure the performance of obligations; buying, selling, transferring, leasing assets; selling, transferring shares, contributed capital; transferring ownership of assets; terminating the performance of effective contracts;
Payment of debt incurred after the Court accepts the request, salary payment to employees in enterprises and cooperatives; other transactions that are not in accordance with the interests of enterprises and cooperatives.
