Paying Debts During Dissolution: Priority Order and Plan

When an enterprise decides to dissolve, the hardest question usually is not about paperwork. It is about money: who is still owed, how much, and which debt to pay first. The 2020 Law on Enterprises already sets out the order, so the enterprise’s job is to determine the correct amounts and pay in that order.

This article is for owners, legal representatives and accountants preparing for dissolution while debts remain outstanding. Main conclusion: employees are paid first, then taxes, then other debts; only once all debts are paid should the dissolution dossier be filed.

What is the statutory order for paying debts during dissolution?

Clause 5, Article 208 of the 2020 Law on Enterprises sets out the following priority order for debt payment:

After paying dissolution costs and debts, only the remainder is divided among owners, members or shareholders in proportion to their ownership (Clause 6, Article 208).

This order has practical significance. If cash is limited, it should not be paid to a familiar supplier first while leaving wages or insurance debts unpaid. Doing it out of order often means having to redo the process later.

Before paying: compile a list of creditors and amounts owed

Most difficulties in dissolution arise from figures that do not match. The first step should therefore be to compile a complete table of creditors, then reconcile each line with the counterparty.

A usable creditor table usually includes:

• Employees: unpaid wages, severance allowances, unused leave days if any, broken down by individual.
• Insurance: the amount still payable, reconciled with the social insurance authority.
• Taxes: outstanding tax, late-payment interest and fines if any, reconciled with the managing tax authority.
• Suppliers, lessors, banks: amounts owed according to debt reconciliation records.
• Receivables: money customers still owe the enterprise. This is a source of funds for paying debts and should not be overlooked.

This table will later also serve as the source for the “list of creditors and debts paid” in the dissolution dossier (Point b, Clause 1, Article 210). Doing this carefully from the start helps ensure the final dossier’s figures match.

What must the debt settlement plan contain, and who receives it?

If the enterprise still has unpaid financial obligations when the dissolution decision is adopted, it must enclose a debt settlement plan (Clause 3, Article 208).

The debt settlement plan must include:

1. The name and address of each creditor.
2. The amount, deadline, location and method of payment of that debt.
3. The method and timeframe for resolving creditor complaints.

The plan is sent together with the dissolution resolution or decision to creditors and to persons with related rights, obligations and interests. The dissolution decision is also sent to the business registration authority, the tax authority and employees within 7 working days from the date it is adopted (Clause 3, Article 208; Clause 1, Article 64 of Decree No. 168/2025/NĐ-CP).

The business registration authority then announces the status “undergoing dissolution procedures” and publishes it together with the debt settlement plan (Clause 4, Article 208). This lets creditors know how the enterprise plans to pay and gives them a channel for feedback.

Drafting tip: set payment deadlines that closely match actual cash flow. A feasible plan with specific dates reassures creditors and reduces complaints more than a plan that promises early payment without enough funds.

Where does the money to pay debts come from?

The private enterprise owner, the Members’ Council or company owner, or the Board of Directors directly organizes the liquidation of assets, unless the charter provides for the establishment of a separate liquidation body (Clause 2, Article 208).

Common sources include:

• Remaining cash and bank deposits.
• Recovering amounts customers still owe.
• Selling assets: machinery, inventory, vehicles.
• Committed but not yet contributed capital. This case requires checking the charter and the specific capital contribution records.

From the moment a dissolution decision is issued, the enterprise is prohibited from certain acts, such as concealing or dissipating assets; waiving or reducing the right to collect debts; converting an unsecured debt into a secured one; signing new contracts other than those needed for dissolution; or pledging, mortgaging, donating or leasing assets (Clause 1, Article 211). Any sale of assets for liquidation should be properly documented at a reasonable price, so the dossier can be explained later if needed.

When assets are not enough to pay all debts

Dissolution can only proceed once the enterprise ensures payment of all debts and other property obligations, and is not undergoing dispute resolution at a court or arbitration (Clause 2, Article 207).

If, after compiling the creditor table, assets prove insufficient, there are two directions to consider:

• Raise additional funds (for example, the owner or members contribute more, or reach a new agreement with creditors), then continue with dissolution.
• Consider procedures under the Law on Rehabilitation and Bankruptcy No. 142/2025/QH15, effective from 1 March 2026.

These two directions differ in nature, the authority handling them and the process. What Is the Difference Between Dissolution and Bankruptcy? compares them in detail. Which path is appropriate depends on the specific dossier and should not be decided based only on a general sense of “there are many debts.”

Tax debt and insurance debt: reconcile first, pay after

Tax debt and insurance debt share a common feature: the figures reside with a state authority, not only in the enterprise’s own books. It is therefore best to reconcile before paying, to ensure the amount paid is correct and complete.

• Tax debt: Law on Tax Administration No. 108/2025/QH15 refers the completion of tax payment obligations upon dissolution to enterprise law (Point a, Clause 1, Article 17). This means tax debt follows the order in Clause 5, Article 208. For an enterprise with unfiled periods or that needs finalization, the reporting is handled by an accounting/tax partner. See also Dissolving a Company with Outstanding Tax Obligations.
• Insurance debt: belongs to the first priority group. The dissolution dossier must show that outstanding social insurance, health insurance and unemployment insurance contributions for employees have been paid after the dissolution decision, if any (Point b, Clause 1, Article 210).

What to do after all debts are paid?

Within 5 working days from the date all debts are paid, the legal representative sends the dissolution dossier to the business registration authority (Clause 7, Article 208). The dossier includes the notification of dissolution and the asset liquidation report, together with the list of creditors and debts paid (Clause 1, Article 210).

The person who signs the dossier is responsible for its truthfulness and accuracy (Clause 2, Article 210). This is why full payment records should be kept. Responsibilities of the Legal Representative and Owners After Dissolution explains this in detail.

What Thái Tín supports in paying debts during dissolution

Thái Tín receives the dossier and first checks the status: tax obligations, insurance, receivables/payables and current assets. From there, Thái Tín works with the enterprise to build a creditor table in the correct statutory order and draft a debt settlement plan with realistic deadlines.

Finalization, tax reporting and record reconciliation are carried out by a suitable accounting/tax partner; Thái Tín coordinates, tracks progress and reports back at each milestone. For enterprises with many employees or foreign capital, Thái Tín builds a separate roadmap for employee entitlements and for remitting funds to investors. State authorities review and decide within their own authority.

Keeping payment records: a small but important part

Every amount paid should have a set of supporting documents: a debt reconciliation record, a payment order or payment voucher, and confirmation from the creditor if available. For employees, there should be a signed payment sheet.

It is best to assign one person to keep this set of records after dissolution is complete. When an explanation is needed, a complete set of documents makes it easy to provide.

Need to know what debts the enterprise still owes and in what order to pay them? Send the tax code and the current debt table for Thái Tín to check the status before building the roadmap.

Questions and answers

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