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THE NATIONAL ASSEMBLY
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SOCIALIST REPUBLIC OF
VIET NAM
Independence - Freedom – Happiness
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No: 13/1999/QH10
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Hanoi, June 12, 1999
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LAW
ON ENTERPRISES
(No. 13/1999/QH10
on the 12 of June, 1999)
In order to contribute to promoting the
internal resources for the cause of national industrialization and
modernization; to accelerate the economic reforms, to ensure freedom and
equality in business of enterprises of all economic sectors before law; to protect
the lawful rights and interests of investors; to enhance the effectiveness of
State management over business activities;
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam;
This Law prescribes limited liability companies, joint-stock companies,
partnerships and private enterprises.
Chapter I
GENERAL PROVISIONS
Article 1.- Governing
scope
1. This Law prescribes the establishment,
management organization and operation of enterprises of various types: limited
liability companies, joint-stock companies, partnerships and private
enterprises.
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Article 2.- Application
of the Law on Enterprises and relevant laws
The establishment, management organization and
operation of enterprises on the Vietnamese territory shall comply with this Law
and other relevant legislation.
Where a difference exists on the same issue
between this Law and a specialised law, the provisions of the specialised law
shall apply.
Article 3.- Interpretation
of terms
In this Law, the following terms shall be
construed as follows:
1. "Enterprise" means an
economic organization having its own name, assets and a fixed transaction
office, and having business registration as prescribed by law in order to
conduct business operations.
2. "Business" means the conduct
of one, several or all of the stages of the investment process, from production
to sale of products or provision of services on the market for profits.
3. "Regular dossiers" means the
dossiers comprising all the papers as required by this Law, having complete and
true contents as required by law.
4. "Capital contribution" means
the transfer of assets into a company so as to become the owner or a joint
owner of the company. Assets used for capital contribution may be in Vietnamese
currency, freely convertible foreign currency, gold, value of land use rights,
value of intellectual property, technology, technical know-hows, or other
assets recorded in the Charter of the company as being contributed by the
members to form the capital of the company.
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6. "Charter capital" means the
amount of capital contributed by all members and stated in the Charter of the
company.
7. "Legal capital" means the
minimum amount of capital required by law for the establishment of an
enterprise.
8. "Voting capital" means the
amount of capital contribution entitling the owner to vote on matters decided
by the Members’ Council or the General Assembly of Shareholders.
9. "Dividend" means the amount
paid from the profits of the company for each share annually.
10. "Founding member" means a
person involved in approving the first Charter of the company. "Founding
shareholder" means a founding member of a joint-stock company.
11. "Partnership member" means
a partner who is liable for the obligations of the company with all his/her
assets.
12. "Manager of an enterprise"
means the owner of a private enterprise, the partner of a partnership, a member
of the Members’ Council, chairman of a company, a member of the Board of
Management, Director (General Director) and other key managerial positions as
stated in the Charter in case of a limited liability company or a joint-stock
company.
13. "Reorganization of an enterprise"
means the division, separation, merger, consolidation and conversion of an
enterprise.
14. "Related person" means
persons related to each other in the following cases:
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b/ An enterprise and a person or a group of
persons being able to control its decision making process and operations
through the management bodies of the enterprise;
c/ An enterprise and its manager;
d/ A group of persons who agree to hold together
the shares of intributed capital, shares or interests in a company or to
control the decision-making process of the company;
e/ Husband, wife, father, adoptive father,
mother, adoptive mother, children, adopted children, siblings of the manager of
an enterprise, member of a company, shareholder holding a controlling share.
Article 4.- The State’s
guarantees for enterprises and their owners
1. The State recognizes the long-term existence
and the development of types of enterprise provided for in this Law, ensures the
equality of enterprises before law, and recognizes the lawful profit-making
nature of business activities.
2. The State recognizes and protects the
ownership over assets, investment capital, income and other lawful rights and
interests of enterprises and their owners.
3. The lawful assets and investment capital of
enterprises and their owners shall not be nationalized or expropriated by
administrative measures.
Where it is really necessary for the reason of
national defense or security and in the national interest, the State decides to
acquire or requisition the assets of an enterprise, the owner or joint owners
of the enterprise shall be paid or compensated at the market price determined
at the time of the decision of acquisition or requisition and will be given
favorable conditions to invest and conduct business in the appropriate field or
area.
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Vietnamese Communist Party organizations in
enterprises shall operate in accordance with the Constitution, the laws and the
regulations of the Vietnamese Communist Party.
Trade union organizations and other
socio-political organizations in enterprises shall operate in accordance with
the Constitution and the laws.
Article 6.- Lines of
business
1. As prescribed by law, an enterprise may
autonomously register and conduct lines of business other than those stipulated
in Clauses 2, 3 and 4 of this Article.
2. Lines of business detrimental to national
defense, security, social order and safety, historical, cultural and ethical
traditions, Vietnamese fine customs and traditions and the people’s health are
prohibited. The Government shall publish the list of prohibited lines of
business.
3. Where a law, an ordinance or a decree
prescribes conditions for the conduct of a line of business, an enterprise may
only conduct such line of business if it satisfies all the prescribed
conditions.
4. Where a law, an ordinance or a decree
requires an amount of legal capital or a practicing certificate for a line of
business, an enterprise may only register such line of business if it has
sufficient capital or a practicing certificate as required by law.
Article 7.- Rights of an
enterprise
As prescribed by law, an enterprise operating
under this Law shall have the rights to:
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2. Take initiative in selecting lines of
business and areas for investment, the form of investment including joint
venture with or capital contribution to other enterprises as well as in
expanding the scope and lines of business;
3. Take initiative in seeking markets and
customers and signing contracts;
4. Select the form and way of mobilizing
capital;
5. Conduct import and export business;
6. Recruit, employ and use labor in accordance
with business requirements;
7. Conduct business autonomously, apply modern
and scientific management methods in order to raise the efficiency and
competitiveness;
8. Refuse and report any demand by any
individual, body or organization for supply of any resources not prescribed by
law, except for voluntary contributions for public-interest or humanitarian
purposes;
9. Other rights as provided for by law.
Article 8.- Obligations
of an enterprise
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1. Conduct business strictly in accordance with
the registered lines of business;
2. Open accounting books, make entries in
accounting books, invoices, vouchers and prepare financial statements truly and
accurately;
3. Register, declare and pay taxes and perform
other financial obligations as provided for by law;
4. Ensure the goods quality in accordance with
the registered standards;
5. Declare and periodically report fully and
accurately the information regarding the enterprise and its financial
stituation with the business registration body; promptly correct the
information with the business registration body upon detection of inaccurate,
incomplete or falsified declaration or report of information;
6. Give priority to the employment of domestic
labor, to ensure rights and interests of laborers as prescribed by the labor
legislation; respect the rights of trade union organizations in accordance with
the trade unions legislation;
7. Comply with law provisions on national
defense, security, social order and safety, protection of natural resources and
the environment, protection of historical and cultural relics and places of
interests;
8. Fulfill other obligations as prescribed by
law.
Chapter II
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Article 9.- The right to
establish and manage enterprises
Organizations and individuals have the right to
establish and manage enterprises, except for the following cases:
1. State bodies and units of people’s armed
forces using State assets and public funds to establish enterprises to make
profits for their own bodies and units;
2. State officials and employees as prescribed
by the legislation on State officials and employees;
3. Officers, non-commissioned officers, career
servicemen, national defense workers in bodies or units of the People’s Army;
officers, career non-commissioned officers in bodies or units of the People’s
Police;
4. Management personnel, professional management
personnel in the State enterprises, except for those appointed to be
representatives to manage the State’s share of contributed capital in other
enterprises;
5. Minors; adults whose capacity for civil acts
is restricted or lost;
6. Persons being examined for penal liability or
in the process of serving imprisonment sentences or having their practicing
right revoked by a Court for having committed smuggling, producing fake goods,
trading in fake goods, conducting illegal business, tax evasion, deceiving
clients and other offences as provided for by law;
7. The owner of a private enterprise, the
partners of a partnership, the Director (General Director), chairman and
members of the Board of Management or the Members’ Council of an enterprise
which has been declared bankrupt may not establish an enterprise, may not act
as manager of an enterprise for one to three years from the date of declaration
of bankruptcy of the enterprise, except for the cases stipulated in the Law on
Business Bankruptcy;
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Article 10.- The right
to contribute capital
1. Organizations and individuals may contribute
capital into limited liability companies, joint-stock companies and
partnerships except for the following cases:
a/ State bodies and units of people’s armed
forces using State assets and public funds to contribute capital into
enterprises to make profits for their own bodies and units;
b/ Subjects not entitled to contribute capital
into enterprises as prescribed by the legislation on State officials and
employees.
2. Foreign organizations, foreign individuals
not having permanent residence in Vietnam and overseas Vietnamese may
contribute capital into limited liability companies, joint-stock companies,
partnerships in accordance with the Law on Domestic Investment Promotion.
Article 11.- Contracts
to be signed prior to business registration
1. A founding member or a representative
authorised by the group of founding members may sign contracts for the purpose
of the establishment of the enterprise;
2. Where the enterprise is established, the
enterprise will assume the rights and obligations arising from the signed
contracts referred to in Clause 1 of this Article;
3. Where the enterprise is not established, the
person who signed the contracts under Clause 1 of this Article shall be solely
or jointly liable for the performance of such contracts.
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1. The founder of an enterprise must prepare and
submit all the business registration dossiers as prescribed by this Law to the
business registration body under the People’s Committee of the province or
centrally-run city where the enterprise is headquartered and will be
responsible for the accuracy and truthfulness of the business registration
dossiers.
2. The business registration body is not
entitled to request the founder of an enterprise to submit additional documents
other than those prescribed by this Law for each type of enterprise. The
business registration body shall be responsible for only the regularity of the
business registration dossiers.
3. The business registration body shall have to
register the business within fifteen days from the date of receipt of the
dossiers; where the business registration certificate is refused, the founder
of the enterprise must be notified thereof in writing. The notice must clearly
state the reasons and the amendments or supplements required.
Article 13.- Business
registration dossiers
A business registration dossier shall comprise:
1. The application for business registration;
2. The charter in case of companies;
3. The list of members in case of a limited
liability company, the list of partnership members in case of a partnership,
the list of founding shareholders in case of a joint-stock company;
4. For enterprises conducting lines of business
which require legal capital, the certification of capital by the competent body
or organization as prescribed by law is additionally required.
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1. An application for business registration must
contain the following principal contents:
a/ Name of the enterprise;
b/ Address of the head office of the enterprise;
c/ Objectives and lines of business;
d/ Charter capital in case of a company, or
initial investment capital of the owner of the enterprise in case of a private
enterprise;
e/ The share of capital contributed by each
member in case of a limited liability company or a partnership; the number of
shares subscribed for by the founding shareholders, types of shares, face value
of shares and the total number of shares of each type to be offered in case of
a joint-stock company;
f) Full names, signatures, permanent address(es)
of the owner(s) of the enterprise in case of a private enterprise; of the legal
representative in case of a limited liability company or a joint-stock company;
of all partners in case of a partnership.
2. An application for business registration
shall be made in a standard form prescribed by the business registration body.
Article 15.- Contents
of the Charter of a company
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1. Names and addresses of the head office,
branch, representative office (if any);
2. Objectives and lines of business;
3. Charter capital;
4. Full names and addresses of all partners in
case of a partnership; names, addresses of members in case of a limited
liability company; names and addresses of founding shareholders in case of a
joint-stock company;
5. The contributed capital share and its value
of each member in case of a limited liability company or a partnership; the
number of shares subscribed for by founding shareholders, face value of shares
and the total number of shares of each type to be offered for sale, in case of
a joint-stock company;
6. Rights and obligations of members in case of
a limited liability company or a partnership; of shareholders in case of a
joint-stock company;
7. Management and organizational structure;
8. Legal representative in case of a limited
liability company or a joint-stock company;
9. Procedures for approving decisions of the
company; principles for resolution of internal disputes;
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11. Assorted funds and the limits of each fund
to be set up in the company; principles for distribution of profits, payment of
dividends and loss bearing in the business;
12. Cases of dissolution, the order of
dissolution and the procedures for liquidation of the assets of the company;
13. Procedures for amending or supplementing the
Charter of the company;
14. Signatures of all partners in case of a
partnership; of the legal representative or all members in case of a limited
liability company; of the legal representative or all founding shareholders in
case of a joint-stock company.
Other contents of the Charter of the company
shall be agreed upon by the members or shareholders but may not contradict the
provisions of law.
Article 16.- List of
members of a limited liability company, partnership, list of founding
shareholders of a joint-stock company.
The list of members of a limited liability
company, partnership, the list of founding shareholders of a joint-stock
company must contain the following principal details:
1. Names and addresses of members in case of a
limited liability company or a partnership; of founding shareholders in case of
a joint-stock company;
2. Share of contributed capital and its value,
type of assets, quantity, residual value of each type of asset contributed as
capital, time schedule for capital contribution in case of a limited liability
company or a partnership; the number of shares, type of shares, type of assets,
quantity of assets, residual value of each asset contributed into the share
capital, time schedule for contribution to the share capital in case of a
joint-stock company;
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Article 17.- Conditions
for granting of business registration certificate and the time of business
commencement.
1. An enterprise shall be granted a business
registration certificate if it satisfies all the following conditions:
a/ Its line of business is not prohibited;
b/ The name of the enterprise complies with the
provisions of Clause 1, Article 24 of this Law;
c/ Having regular business registration dossiers
as prescribed by law;
d/ Paying fully business registration fee as
prescribed.
2. An enterprise may commence its business from
the date of issue of the business registration certificate. For lines of
business subject to conditions, an enterprise may only conduct business from
the date it is granted the business registration certificate by the competent
State body or when it satisfies all the prescribed conditions.
Article 18.- Content of
a business registration certificate
A business registration certificate must contain
the following principal details:
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2. Objectives and lines of business;
3. Charter capital, in case of a limited
liability company, joint-stock company or a partnership; initial investment
capital, in case of a private enterprise; legal capital, in case of an
enterprise conducting a line of business which requires legal capital;
4. Full names and permanent address of the legal
representative of the enterprise;
5. Names and addresses of members, in case of a
limited liability company; of founding shareholders, in case of a joint-stock
company; full names and permanent residence addresses of partners, in case of a
partnership.
Article 19.-
Alterations of business registration
1. When any changes are made to the names,
addresses of the head office, branch, representative office (if any),
objectives and line of business, charter capital, investment capital of the
owner of the enterprise, change of the manager, legal representative of the
enterprise and other matters included in the business registration dossiers,
the enterprise must register with the business registration body no later than
15 days before effecting the changes.
2. In case where any change is made to the
content of the business registration certificate, the enterprise will be
granted a new business registration certificate; in case of other changes, the
enterprise will be granted a certificate of business registration alteration.
Article 20.- Providing
information on business registration
1. Within seven days from the date of issuance
of the business registration certificate or the certificate of business
registration alteration, the business registration body must send a copy of
such certificate to the tax office, statistics office, the economic or
technical administrative body at the same level, the People’s Committee of the
rural or urban district, township or provincial city where the enterprise is
headquartered.
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3. The business registration body shall have to
provide fully and promptly the information on business registration required by
organizations and individuals, as provided for in Clause 2 of this Article.
Article 21.- Publication
of business registration
1. Within thirty days from the date it is
granted the business registration certificate, the enterprise must publish on a
local newspaper or a central daily for three consecutive issues the following
principal contents:
a/ Name of the enterprise;
b/ Addresses of the head office of the
enterprise, branch, representative office (if any);
c/ Objectives and lines of business;
d/ Charter capital, in case of a limited
liability company, a joint-stock company or a partnership; initial investment
capital, in case of a private enterprise;
e/ Names and addresses of the owner, all
founding members;
f/ Full name and permanent residence address of
the legal representative of the enterprise;
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2. When any change is made to the business
registration, the enterprise shall have to make public such change as
prescribed in clause 1 of this Article.
Article 22.- Transfer
of ownership of assets
1. After being granted the business registration
certificate, persons who undertake to contribute capital into a limited
liability company, a joint-stock company or a partnership shall have to
transfer the ownership of the assets contributed as capital to the company
according to the following regulations:
a/ For registered assets or the value of the
land use right, the person contributing capital shall have to carry out the
procedures for the transfer of the ownership over such assets or the value of
the land use right to the company at the competent State body.
The transfer of ownership of assets contributed
as capital is not liable to registration fee;
b/ For assets the ownership over which is not
registered, the capital contribution is made by the transfer and receipt of
assets, as evidenced by minutes.
The minutes of such transfer and receipt must
contain the following principal details: name and head office address of the
company; name and address of the person making the capital contribution; type
of asset and number of units of asset contributed as capital; the total value
of assets contributed as capital and the percentage of the total value of such
assets in the charter capital of the company; the date of transfer and receipt;
signature of the person making the capital contribution and the legal
representative of the company;
c/ Shares or capital contributions in the form
of assets other than Vietnamese currency, freely convertible foreign currency
or gold will be deemed contributed when the legal ownership over the assets
contributed as capital is transferred to the company.
2. Assets used for the business of private
enterprises shall not have to go through the procedures for transferring the
asset ownership to the enterprises.
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1. Assets contributed as capital which are not
Vietnamese currency, freely convertible currency or gold must be valued.
2. For assets contributed as capital to the
enterprise upon its establishment, all the founding members shall be the
valuers of such assets. The value of assets contributed as capital must be
approved on the principle of consensus.
3. In the course of operation, the Board of
Management of a joint-stock company, the Members�
Council of a limited liability company or all the partners of a partnership
shall be the valuers of assets contributed as capital.
4. People valuing assets referred to in Clauses
2 and 3 of this Article must be responsible for the truthfulness and accuracy
of the value of assets contributed as capital. Where an asset contributed as
capital is valued higher than its actual value at the time of contribution, the
contributor and the valuers of such assets shall have to make contributions to
ensure the full amount as valued; if damage is caused to any other person, they
must be jointly liable for compensation.
Where a person having related rights,
obligations or interests proves that an asset contributed as capital was not
valued at its actual value at the time of contribution, such person may request
the business registration body to force the valuer to revalue the asset or to
appoint a valuation organization to revalue the asset contributed as capital.
Article 24.- Name,
head-office and seal of the enterprise
1. The name of an enterprise must:
a/ not be identical or cause confusion with the
name of another enterprise which has registered its business;
b/ not contravene the nation’s historical
traditions, culture, ethics and fine customs;
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d/ Apart from the provisions stated in Points
(a), (b) and (c) of this Clause, the type of enterprise must be clearly
inscribed: for a limited liability company, the phrase "trach nhiem huu
han" (limited liability) is abbreviated as "TNHH" (Ltd.); for a
shareholding company, the term "co phan" (joint-stock ) is abbreviated
as "Cp"; for a partnership, the term "hop danh"
(partnership) is abbreviated as "HD"; for a private enterprise, the
word "tu nhan" (private) is abbreviated as "TN".
2. The head office of an enterprise must be
located on the Vietnamese territory; must have a definite address including the
house number, street (or alley) name or the name of the village, commune, ward,
township; district, provincial town; province or centrally-run city; telephone
and fax numbers (if any).
3. An enterprise shall have its own seal as
prescribed by the Government.
Article 25.- Representative
offices and branches of an enterprise
1. A representative office is a dependent unit
of the enterprise, having the task of representing under authorization the
interests of the enterprise and protecting such interests. The operations of a
representative office must be in line with the operations of the enterprise.
2. A branch is a dependent unit of the
enterprise, having the task of performing the entire or part of the function of
the enterprise, including the function of an authorized representative. The
line of business of the branch must be in accordance with the line of business
of the enterprise.
3. An enterprise may set up branches and
representative offices at home and abroad. The order and procedures for setting
up branches and representative offices shall be stipulated by the Government.
Chapter III
LIMITED LIABILITY
COMPANIES
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Article 26.- Limited
liability companies
1. A limited liability company is an enterprise,
in which:
a/ A member is liable for the debts and other
property obligations of the enterprise within the amount of capital he/she/it
has undertaken to contribute to the enterprise;
b/ The share of contributed capital of each
member may only be assigned in accordance with Article 32 of this Law;
c/ A member may be an organization or an
individual; the number of members shall not exceed fifty.
2. A limited liability company shall not be
entitled to issue shares.
3. A limited liability company has the legal
person status as from the date it is granted the business registration
certificate.
Article 27.- Capital
contribution and granting of capital contribution certificates
1. Members shall have to contribute capital
fully and on time as committed. Where a member fails to contribute it fully and
on time as committed, the amount of capital not yet contributed shall be
considered a debt that member owes the company; such member shall have to
compensate for any damage arising from such failure to contribute capital fully
and on time as committed.
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2. Upon the full payment of capital
contribution, the member shall be granted a capital contribution certificate by
the company. A capital contribution certificate must contain the following
principal details:
a/ Name, head-office of the company;
b/ The serial number and the date of issue of
the business registration certificate;
c/ Charter capital of the company;
d/ Names and addresses of the members;
e/ The members’ contributed capital shares and
their values;
f/ The serial number and the date of issue of
capital contribution certificate;
g/ Signature of the legal representative of the
company.
3. Where a capital contribution certificate is
lost, torn, burnt or otherwise destroyed, the member will be granted by the
company a new capital contribution certificate and must pay fee as stipulated
by the company.
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1. A company must forthwith set a register of
members after business registration. A register of members must contain the
following principal contents:
a/ Name and head-office of the company;
b/ Names, addresses and signatures of members or
their legal representatives;
c/ Value of contributed capital at the time of
contribution and the contributed capital share of each member; the time of
capital contribution; the types of asset contributed as capital, quantity,
value of each type of asset contributed as capital;
d/ Serial number and the date of issuance of
capital contribution certificate of each member.
2. The register of members shall be kept at the
head office of the company or elsewhere provided that written notice thereof is
given to the business registration body and all the members.
Article 29.- Rights of
a member
1. A member of a limited liability company has
the right to:
a/ Be distributed with profits after the company
has paid taxes and fulfilled other financial obligations as provided for by law
in proportion to his/her/its share of contributed capital in the company;
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c/ Have the number of votes in proportion to
his/her/its share of contributed capital;
d/ Have access to the register of members, books
of account, annual financial reports, other documents of the company and
receive extracts or copies of these documents;
e/ Be distributed with the residual value of
assets of the company in proportion to his/her/its share of contributed capital
in the company upon dissolution or bankruptcy of the company;
f/ Be given priority in making additional
capital contributions to the company when it increases its charter capital; be
entitled to assign partly or wholly his/her/its share of contributed capital;
g/ Initiate a lawsuit against the Director
(General Director) when the Director (General Director) fails to properly
perform his/her obligations and cause damage to the interest of such member;
h) Other rights stipulated in this Law and the
Charter of the company.
2. A member or a group of members holding more
than 35% of the charter capital or a smaller percentage as stipulated in the
Charter of the company shall have the right to request that a meeting of the
Members’ Council be convened to deal with issues within its authority.
Article 30.- Obligations
of members
1. To contribute in full and on time the amount
of capital as committed and to be liable for the debts and other property
obligations of the company within the amount of capital he/she/it undertakes to
contribute to the company.
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3. To observe decisions of the Members’ Council.
4. To fulfill other obligations stipulated in
this Law and the Charter of the company.
Article 31.- Redemption
of shares of contributed capital
1. A member may demand the company to redeem
his/her/its share of contributed capital if such member votes against or
objects in writing to a decision of the Members’ Council on the following
issues:
a/ Amendment and/or supplement to the provisions
of the Charter of the company relating to the rights and obligations of
members, and rights and duties of the Members’ Council;
b/ Reorganization of the company;
c/ Other cases stipulated in the Charter of the
company.
The demand for redemption of share of
contributed capital must be made in writing and sent to the company within
fifteen days from the date the decision is adopted on the issues stipulated in
Points a, b and c of this Clause.
2. When a member makes a demand as stipulated in
Clause 1 of this Article and no agreement can be reached on the price, the
company shall have to redeem the contributed capital share of such member at
the market price or at the price calculated according to the principles
prescribed in the Charter of the company within fifteen days from the date of
receipt of such demand.
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Article 32.- Assignment
of contributed capital shares
Members of limited liability companies may
assign a part or the whole of their shares of contributed capital to other
persons according to the following regulations:
1. A member wishing to assign a part or whole of
his/her/its share of contributed capital shall offer to sell such share of
equity to all other members in proportion to their shares of equity in the
company on the same terms;
2. Assignment to non members is permitted only
if the other members of the company do not buy or do not buy out.
Article 33.- Dealing
with shares of contributed capital in other cases
1. Where a member being an individual who is
dead or who is declared dead by the court, his/her heir may become a member of
the company, if so approved by the Members’ Council.
2. Where a member’s capacity for civil acts is
restricted or lost, the rights and obligations of such member in the company
shall be exercised by his/her guardian, if the latter is approved by the
Members’ Council.
3. Where an heir referred to in Clause 1 of this
Article is not approved by the Members’ Council or does not wish to become a
member, where the guardian of a member referred to in Clause 2 of this Article
is not approved by the Members’ Council, or where a member being an
organization is dissolved or bankrupt, the contributed capital share of such
member shall be redeemed by the company in accordance with Article 31 of this
Law or be assigned in accordance with Article 32 of this Law.
4. Where a member being an individual dies
without heir or where his/her heir refuses to accept the inheritance or is
deprived of his/her right to inherit, the company shall have to pay the value
of such share contributed capital to the State budget.
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A limited liability company with two members or
more shall have a Members’ Council, Chairman of the Members’ Council and a
Director (General Director). A limited liability company with more than eleven
members must also have a Control Board. The powers, obligations and working
regulations of the Control Board and the head of the Control Board shall be
stipulated in the Charter of the company.
Article 35.- Members’
Councils
1. The Members’ Council comprises all members
and is the highest decision-making body of the company. Where a member is an
organization, such member shall appoint its representative to be on the
Members’ Council. The Members’ Council shall meet at least once a year.
2. The Members’ Council shall have the following
rights and duties:
a/ To decide orientation for the development of
the company;
b/ To decide the increase or decrease of the
charter capital, as well as the timing and method of mobilizing additional
capital;
c/ To decide the form of investment and
investment projects having a value larger than 50% of the total value of assets
recorded in the accounting books of the company or a smaller percentage as
stipulated in the Charter of the company;
d/ To approve contracts for loans or for sale of
assets having a value equal to or larger than 50% of the value of assets
recorded in the accounting books of the company or a smaller percentage as
stipulated in the Charter of the company;
e/ To elect, remove or dismiss the Chairman of
the Members’ Council; to make decisions on the appointment, removal or
dismissal of the Director (General Director), chief accountant and other
important managers stipulated in the Charter of the company;
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g/ To approve annual financial reports, plans
for use and distribution of profits or plans for dealing with losses of the
company;
h/ To decide the organizational and managerial
structure of the company;
i/ To decide the setting up of branches and
representative offices;
j/ To make amendments or supplements to the
Charter of the company;
k/ To decide reorganization of the company;
l/ To decide dissolution of the company;
m/ Other rights and duties stipulated in this
Law and in the Charter of the company.
Article 36.- Chairman
of the Members’ Council
1. The Members’ Council shall elect a member to
be its Chairman. The Chairman of the Members’ Council may concurrently work as
the Director (General Director) of the company.
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a/ To prepare working programs and plans of the
Members’ Council;
b/ To prepare agendas, contents and documents
for meetings of the Members’ Council or for consulting members;
c/ To convene and preside over meetings of the
Members’ Council or to consult members;
d/ To supervise the implementation of decisions
of the Members’ Council;
e/ To sign decisions of the Members’ Council on
behalf of the Members’ Council;
f/ Other rights and duties prescribed in this
Law and the Charter of the company.
3. The term of the Chairman of the Members’ Council
shall not exceed three years. The Chairman of the Members’ Council may be
re-elected.
4. Where the Charter of the company provides
that the Chairman of the Members’ Council is the legal representative, such
provision shall be clearly stated in all transaction documents.
Article 37.- Convening
meetings of the Members’ Council
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2. The agenda and documents for a meeting must
be sent to members of the company prior to the opening day of the meeting. Such
prior period shall be stipulated in the Charter of the company.
Article 38.- Conditions
and procedures for conducting meetings of the Members's Council
1. A meeting of the Members’ Council shall be
conducted when the attending members represent at least 65% of the charter
capital. The specific percentage shall be stipulated in the Charter of the
company.
2. Where a meeting does not take place because
the condition stipulated in Clause 1 of this Article is not satisfied, the
meeting may be convened for the second time within fifteen days from the date
the first meeting was intended to be opened. A meeting of the Members’ Council
which is convened for the second time shall be conducted when the attending
members represent at least 50% of the charter capital. The specific percentage
shall be stipulated in the Charter of the company.
3. Where a meeting which has been convened for
the second time does not take place because the condition stipulated in Clause
2 of this Article is not satisfied, it may be convened for the third time
within ten days from the date the second-time meeting was intended to be
opened. In this case, the meeting of the Members’ Council shall be conducted
regardless of the number of attending members.
4. A member may authorize another member in
writing to attend a meeting of the Members’ Council. The procedures for
conducting meetings of the Members’ Council and the voting method shall be
stipulated by the Charter of the company.
Article 39.- Decisions
of the Members’ Council
1. The Members’ Council shall make decisions
within its authority by way of voting at meetings or obtaining written opinions.
2. A decision of the Members’ Council shall be
passed at a meeting when:
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b/ With regard to decisions to sell assets
having a value equal to or larger than 50% of the total value of assets
recorded in the accounting books of the company or a smaller percentage as stipulated
in the Charter of the company, to make amendments and supplements to the
Charter of the company and/or to reorganize or dissolve the company, they must
be approved by the number of votes representing at least 75% of the capital of
the attending members. The specific percentage shall be stipulated in the
Charter of the company.
3. A decision of the Members’ Council shall be
passed by way of obtaining written opinions if it is approved by members
representing at least 65% of the charter capital. The specific percentage shall
be stipulated in the Charter of the company.
Article 40.- Minutes of
meetings of the Members’ Council
1. All meetings of the Members’ Council shall be
recorded in the book of minutes of the company.
2. Minutes of each meeting of the Members’
Council shall be completed and approved prior to the closing of the meeting.
The minutes must include the following principal contents:
a/ Time and venue of the meeting;
b/ Total number of attending members and the
percentage of charter capital they represent;
c/ Agenda;
d/ Summary of statements made at the meeting;
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f/ Full name and signature of the Chairman of
the Members’ Council or of the person authorized by the Chairman of the
Members’ Council to preside over the meeting.
Article 41.- Director
(General Director)
1. The Director (General Director) of the
company is the person who manages the day-to-day business operation of the
company, and who is answerable to the Members’ Council for the exercise of
his/her rights and performance of his/her obligations. Where the Charter of the
company does not provide for the Chairman of the Members’ Council to be the
legal representative, the Director (General Director) shall be the legal
representative of the company.
2. The Director (General Director) shall have
the following rights:
a/ To organize the implementation of decisions
of the Members’ Council;
b/ To decide all matters relating to the
day-to-day business operation of the company;
c/ To organize the implementation of the
business plans and investment plans of the company;
d/ To issue the regulations on internal
management of the company;
e/ To appoint, remove or dismiss management
personnel in the company except for those under the competence of the Members’
Council;
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g/ To make recommendations regarding the
organizational structure of the company;
h/ To submit the final annual financial report
to the Members’ Council;
i/ To recommend the plan for use of profits or
for dealing with losses in business;
k/ To recruit employees;
l/ Other rights stipulated in the Charter of the
company and in the labor contract which the Director (General Director) enters
into with the company and in accordance with the decision of the Members’
Council.
3. The Director (General Director) shall have
the following obligations:
a/ To exercise his/her delegated rights and perform
his/her assigned duties honestly and diligently in the lawful interests of the
company;
b/ Not to abuse his/her position and power nor
to use assets of the company for personal benefits of his/her own or of other
persons; not to disclose secrets of the company except where approved by the
Members’ Council;
c/ When the company fails to pay fully all debts
and other property obligations which are due and payable, to inform all members
and creditors of the company of the financial situation of the company; not to
increase salary or to pay bonuses to employees of the company, including
managers; to be personally liable for any damage caused to creditors due to
failure to perform the obligation stipulated in this Point; and to recommend
measures to overcome the financial difficulties of the company;
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Article 42.- Contracts
which must be approved by the Members’ Council
1. All members of a company must be informed of
all economic, labor and civil contracts between the company and any of its
member, Director (General Director) or any of their related persons no later
than fifteen days prior to signing of such contracts.
2. Where a member discovers a sign of personal
gains in any contract, he/she may request the Members’ Council to consider and
make a decision. In this case, the contract may only be signed after a decision
has been made by the Members’ Council. If the contract is signed without prior
approval of the Members’ Council, such contract shall be void and be null and
dealt with according to law. Persons causing damage to the company must
compensate for such damage and return to the company any benefits gained from
the performance of such contract.
Article 43.- Increase
and reduction of the charter capital
1. By decisions of the Members’ Council, the
company may increase its charter capital by way of:
a/ Increasing the contributed capital of
members;
b/ Increasing the charter capital relative to
the increased value of assets of the company;
c/ Receiving contributed capital from new
members.
2. In case of increase of contributed capital of
members, the additionally contributed capital shall be divided to each member
in proportion to his/her contributed capital share in the charter capital of
the company. If a member does not contribute additional capital, such share of
capital shall be divided amongst other members in proportion to their
respective shares of contributed capital.
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a/ Returning part of the contributed capital to
members in proportion to their respective shares of capital in the charter
capital of the company;
b/ Reducing the charter capital relative to the
reduced value of assets of the company;
The company may only reduce its charter capital
in accordance with the provisions in Point a of this Clause if, following such
return of contributed capital to the members, the company is still able to pay
all debts and other property obligations.
Article 44.- Conditions
for distribution of profits
A limited liability company may only distribute
profits to its members when it earns profits from its business, has fulfilled
its tax and other financial obligations in accordance with the provisions of
law, and right after such distribution of profits, the company is still able to
pay all due debts and other property obligations.
Article 45.- Recovery
of returned shares of contributed capital or distributed profits
Where part of the contributed capital is
returned because the charter capital is reduced not in accordance with Clause
3, Article 43 of this Law, or where profits are distributed to members not in
accordance with Article 44 of this Law, all members must return to the company
the amount of money or other assets they received or shall be jointly liable
for a debt equal to the reduced amount of capital or the distributed amount of
profits in proportion to their shares of contributed capital.
Section II. ONE-MEMBER
LIMITED LIABILITY COMPANIES
Article 46.- One-member
limited liability companies
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2. The company owner may assign whole or part of
the charter capital of the company to other organizations and/or individuals.
3. One-member limited liability companies shall
not be entitled to issue shares.
4. One-member limited liability companies shall
have the legal person status from the date they are granted the business
registration certificate.
Article 47.- Rights and
obligations of a company owner
1. A company owner shall have the following
rights:
a/ To decide the contents, amendments and/or
supplements to the Charter of the company;
b/ To decide the organizational and managerial
structure of the company, to appoint, remove or dismiss management personnel of
the company as stipulated in Article 49 of this Law;
c/ To decide adjustments of the charter capital
of the company;
d/ To decide investment projects having the
value equal to or larger than 50% of the total value of the assets recorded in
the accounting books of the company;
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f/ To organize supervision, monitoring and
assessment of the business operation of the company;
g/ To make decisions on the use of profits;
h/ To decide the reorganization of the company;
i/ Other rights stipulated in this Law and in
the Charter of the company.
2. A company owner shall have the following
obligations:
a/ To contribute capital in full and on time as
registered;
b/ To comply with the Charter of the company;
c/ To comply with the law provisions on
contracts regarding any purchase, sale, borrowing, lending, lease or rent
between the company and the owner;
d/ To perform other obligations as prescribed by
law.
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1. The company owner may not directly withdraw a
part or the whole of capital already contributed to the company.
2. The company owner may only withdraw capital
by way of assigning a part or whole of the capital to other organizations or
individuals.
3. The company owner may not withdraw profits of
the company when the latter has not fully paid all due debts and other property
obligations.
Article 49.- Organizational
and managerial structure of the company
1. Depending on the scale and line of business,
the organizational and managerial structure of a one-member limited liability
company shall comprise the Board of Management and the Director (General
Director), or the Chairman of the company and the Director (General Director).
2. Rights and obligations of the Board of
Management or the Chairman of the company and of the Director (General Director)
of a one-member limited liability company shall be stipulated in the Charter of
the company based on this Law and other relevant provisions of law.
Article 50.- Increase
and reduction of the charter capital
One-member limited liability companies may increase
or reduce their charter capital by way of:
1. Increasing or reducing the capital
contributed by the company owner;
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Chapter IV
JOINT-STOCK COMPANIES
Article 51.- Joint-stock
companies
1. A joint-stock company is an enterprise in
which:
a/ The charter capital is divided into equal
portions called shares;
b/ Shareholders are liable for the debts and
other property obligations of the enterprise within the amount of capital
contributed to the enterprise;
c/ Shareholders may freely assign their shares
to other persons, except for cases stipulated in Clause 3, Article 55 and
Clause 1, Article 58, of this Law.
d/ Shareholders may be organizations or
individuals; the minimum number of shareholders is three and there is no
restriction on the maximum number.
2. Joint-stock companies may issue securities to
the public in accordance with the legislation on securities.
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Article 52.- Types of
shares
1. Joint-stock companies must have ordinary
shares. Owners of ordinary shares are called ordinary shareholders.
2. Joint-stock companies may have preference
shares. Owners of preference shares are called preference shareholders.
Preference shares shall include the following
types:
a/ Voting preference shares;
b/ Dividend preference shares;
c/ Redeemable preference shares;
d/ Other preference shares stipulated in the
Charter of the company.
3. Only organizations authorized by the
Government and founding shareholders may hold voting preference shares. The
voting preference of founding shareholders are valid only for three years from
the date the company is granted the business registration certificate. After
that period, the voting preference shares of founding shareholders shall be
converted into ordinary shares.
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5. Each share of the same type gives its holder
the same rights, obligations and interests.
6. Ordinary shares may not be converted into
preference shares. Preference shares may be converted into ordinary shares by
decisions of the General Assembly of Shareholders.
Article 53.- Rights of
ordinary shareholders
1. Ordinary shareholders have the right to:
a/ Attend and vote on all matters which fall
under the jurisdiction of the General Assembly of Shareholders; each ordinary
share carries one vote;
b/ Receive dividends at the rate decided by the
General Assembly of Shareholders;
c/ Be given priority in subscribing for new
shares offered for sale in proportion to the number of ordinary shares each
shareholder holds in the company;
d/ Upon dissolution of the company, receive a
part of the remaining assets in proportion to the number of shares held in the
company after the company has paid its creditors and shareholders of other
types.
e/ Other rights stipulated in this Law and the
Charter of the company.
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a/ Nominate candidates to the Board of
Management and the Control Board (if any);
b/ Request the convention of a meeting of the
General Assembly of Shareholders;
c/ Have access to and receive a copy or extract
of the list of shareholders entitled to attend meetings of the General Assembly
of Shareholders;
d/ Other rights stipulated in this Law and the Charter
of the company.
Article 54.-
Obligations of ordinary shareholders
1. To pay in full for the shares subscribed for
and be liable for debts and other property obligations of the company within
the amount of capital contributed to the company.
2. To abide by the Charter and the internal
management rules of the company.
3. To observe decisions of the General Assembly
of Shareholders and the Board of Management.
4. To perform other obligations as stipulated in
this Law and the Charter of the company.
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1. A voting preference share is a share which
carries more votes than an ordinary share. The number of votes per voting
preference share shall be stipulated in the Charter of the company.
2. Voting preference shareholders shall have the
right to:
a/ Vote on matters which fall under the
jurisdiction of the General Assembly of Shareholders with the number of votes
in accordance with Clause 1 of this Article;
b/ Other rights as ordinary shareholders, except
for case prescribed in Clause 3 of this Article.
3. Voting preference shareholders may not assign
such shares to other persons.
Article 56.- Dividend
preference shares and rights of dividend preference shareholders
1. A dividend preference share is a share for
which dividend is paid at a rate higher than that paid on an ordinary share, or
at an annual fixed rate. Annually paid dividends include fixed dividends and
bonus dividends. Fixed dividends do not depend on the outcome of the business
of the company. The specific rate of fixed dividends and method for
determination of bonus dividends shall be stated in the certificate of dividend
preference shares.
2. Dividend preference shareholders shall have
the right to:
a/ Receive dividends at the rates prescribed in
Clause 1 of this Article;
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c/ Other rights as ordinary shareholders, except
for cases prescribed in Clause 3 of this Article.
3. Dividend preference shareholders shall not
have the right to vote, the right to attend meetings of the General Assembly of
Shareholders, nor the right to nominate candidates to the Board of Management
and the Control Board.
Article 57.- Redeemable
preference shares and rights of redeemable preference shareholders
1. A redeemable preference share is a share
which shall be redeemed by the company at any time at the request of its owner,
or in accordance with the conditions stated in the redeemable preference share
certificate.
2. Redeemable preference shareholders shall have
other rights as ordinary shareholders, except for case prescribed in Clause 3
of this Article.
3. Redeemable preference shareholders shall not
have the right to vote, the right to attend meetings of the General Assembly of
Shareholders, nor the right to nominate candidates to the Board of Management
and the Control Board.
Article 58.- Ordinary
shares of founding shareholders
1. Within the first three years from the date
the company is granted the business registration certificate, its founding
shareholders must together hold at least 20% of the number of ordinary shares
which may be offered for sale; ordinary shares of the founding shareholders may
be assigned to persons not being shareholders if so approved by the General
Assembly of Shareholders. Shareholders intending to assign shares may not vote
on the assignment of such shares.
2. After the period of three years stipulated in
Clause 1 of this Article, all restrictions upon ordinary shares of founding
shareholders shall lose effect.
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Certificates issued by a joint-stock company or
book entries certifying the ownership of one or a number of shares of such
company are called share certificates. Share certificates may or may not
indicate names.
A share certificate must contain the following
principal contents:
1. Name and head-office of the company;
2. Serial number and date of issuance of the
business registration certificate;
3. Number and types of shares;
4. Par value of each share and the total par
value of the shares inscribed on the share certificate;
5. Name of shareholder with regard to the share
certificate which indicates the name;
6. Summary of the procedures for share
assignment;
7. Specimen signature of the legal
representative and seal of the company;
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9. Preference share certificates shall also
include other details as stipulated in Articles 55, 56 and 57 of this Law.
Article 60.- Register
of shareholders
1. A joint-stock company shall establish and
keep a register of shareholders from the date it is granted the business
registration certificate. The register of shareholders may be in the form of a
document or an electronic file, or both.
A register of shareholder must contain the following
principal contents:
a/ Name and head-office of the company;
b/ Total number of shares to be offered for
sale, types of shares to be offered for sale and number of shares of each type
to be offered for sale;
c/ Total number of shares of each type already
sold and the value of equity capital already contributed;
d/ Names of shareholders, address, number of
shares of each type of each shareholder and date of share registration.
2. The register of shareholders shall be kept at
the office of the company or other places, provided that the business
registration body and all shareholders are informed thereof in writing
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1. The Board of Management shall decide the
price at which shares are offered for sale. The price at which shares are
offered for sale shall not be lower than the market price at the time of sale
offer, except for the following cases:
a/ Initial offering of shares after the business
registration;
b/ Shares offered for sale to all shareholders
in proportion to the number of their existing shares in the company;
c/ Shares offered for sale to brokers or
underwriters. In this case, the offered selling price of shares shall not be
lower than the market price minus (-) the commission for brokers or underwriters.
The commission shall be determined in percentage of the value of shares at the
time of sale offer.
2. Shares are considered to have been sold or
assigned when the details stipulated in Point d, Clause 1, Article 60 of this
Law are correctly and fully recorded in the register of shareholders; from such
point of time, the purchaser or assignee of shares becomes a shareholder of the
company.
3. After the shares subscribed for are fully
paid for, the company shall issue share certificates at the request of the
shareholders. Where a share certificate is lost, torn, burnt or otherwise
destroyed, the shareholder must immediately inform the company thereof and may
request the company to issue a new share certificate then have to pay a fee
stipulated by the company.
A company may sell shares without share
certificates. In this case, the information about a shareholder stipulated in
Point d, Clause 1, Article 60 of this Law recorded in the register of
shareholders shall be sufficient to evidence the ownership of shares of such
shareholder in the company.
4. The procedures for offering shares for sale
shall comply with the legislation on securities.
Article 62.- Issue of
bonds
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2. The Board of Management shall decide the type
of bonds, total value of bonds and timing of issuance.
Article 63.- Purchase
of shares and bonds
Shares and bonds of joint-stock companies may be
purchased in Vietnamese dong, freely convertible foreign currency(ies), gold,
value of land use right, value of intellectual property, technology, technical
know-how, or other assets stipulated in the Charter of the company, and shall
be fully paid in one installment.
Article 64.- Redemption
of shares upon demand by shareholders
1. A shareholder voting against a decision on
reorganization of the company or on changes to the rights and obligations of
shareholders stipulated in the Charter of the company may request the company
to redeem his/her shares. Such request must be made in writing, clearly stating
the name and address of the shareholder, the number of shares of each type, the
intended selling price, and the reason for demanding redemption by the company.
Such demand must be sent to the company within ten days from the date the
General Assembly of Shareholders passes the decision on the matters referred to
in this Clause.
2. The company must redeem shares at the request
of shareholders as stipulated in Clause 1 of this Article at the market price
or the price determined on the principle stipulated in the Charter of the
company within a time-limit of ninety days from the date of receipt of the
request. Where no agreement is reached on the price, the parties may request
the arbitration or the court to settle matters according to provisions of law.
Article 65.- Redemption
of shares by decisions of the company
A company may redeem not more than 30% of the
total number of ordinary shares sold, and part or all of shares of other types
sold according to the following regulations:
1. The redemption of more than 10% of the total
number of shares of each type already sold shall be decided by the General
Assembly of Shareholders. In other cases, redemption of shares shall be decided
by the Board of Management.
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3. The company may redeem shares of each
shareholder in proportion to the number of shares he/she/it holds in the
company. In this case, the decision to redeem shares of the company shall be
notified to all shareholders within thirty days from the date such decision is
passed. The notice shall include the name and address of the company, total
number of shares and types of shares to be redeemed, price for redemption or
principle for determination of the price for redemption, procedures and time
limit for payment, and procedures and time limit for shareholders to offer
their shares for sale to the company. Shareholders must send an offer to sell
their shares to the company within thirty days from the date of notice.
Article 66.- Conditions
for payment and dealing with redeemed shares
1. A company may only pay shareholders for
redeemed shares in accordance with Articles 64 and 65 of this Law if right
after such redeemed shares are paid for, the company is still able to pay all
its debts and other property obligations.
2. All shares redeemed in accordance with
Articles 64 and 65 of this Law shall be considered shares not yet sold among
the shares which may be offered for sale.
3. After the redeemed shares are fully paid for,
if the total value of assets recorded in the accounting books of the company is
reduced by more than 10%, the company must notify all creditors thereof within
fifteen days from the date the redeemed shares are fully paid for.
Article 67.- Payment of
dividends
1. A joint-stock company may only pay dividends
to its shareholders when it earns profits from its business and has fulfilled
its tax and other financial obligations in accordance with law, and when, after
the payment of such dividends, the company is still able to pay all its due debts
and other property obligations.
2. The Board of Management shall prepare a list
of shareholders to be paid dividends and determine the rate of dividend paid
for each share, the time-limit and mode of payment no later than thirty days
prior to each payment of dividends. The notice on payment of dividends shall be
sent to all shareholders no later than fifteen days prior to the actual payment
of dividends. The notice shall specify the name of the company, name and
address of the shareholder, the number of shares of each type held by such
shareholder, the dividend rate for each share and the total dividends such
shareholder is paid, and the time and method of dividend payment.
3. Where shares are assigned during the period
between the completion of the list of shareholders and the time of payment of
dividends, the share assignor shall receive dividends from the company.
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Where a payment for redeemed shares is made in
contravention of Clause 1, Article 66 of this Law or where dividends are paid
in contravention of Clause 1, Article 67 of this Law, all shareholders shall
have to return to the company the money or other assets they have received;
where a shareholder cannot return them to the company, such shareholder and
members of the Board of Management shall be jointly liable for the debts of the
company.
Article 69.- Organizational
and managerial structure of joint-stock companies
Joint-stock companies must have the General
Assembly of Shareholders, the Board of Management and the Director (General
Director); joint-stock companies with more than eleven shareholders must also
have the Control Board.
Article 70.- The
General Assembly of Share-holders
1. The General Assembly of Shareholders shall comprise
all shareholders who may vote and shall be the highest decision-making body of
a joint-stock company.
2. The General Meeting of Shareholders shall
have the following rights and duties:
a/ To decide the types of shares and total
number of shares of each type to be offered for sale; to decide the rate of
annual dividend for each type of shares;
b/ To elect, remove or dismiss members of the
Board of Management and members of the Control Board;
c/ To consider and handle breaches committed by
the Board of Management and the Control Board which cause damage to the company
and its shareholders;
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e/ To decide the amendments and supplements to the
Charter of the company, except for adjusting the charter capital as a result of
sale of new shares within the number of shares which may be offered for sale as
stated in the Charter of the company;
f/ To approve annual financial reports;
g/ To adopt the orientation for the development
of the company, to decide the sale of assets having value equal to or larger
than 50% of the total value of assets recorded in the accounting books of the
company;
h/ To decide the redemption of more than 10% of
the total number of already sold shares of each type;
i/ Other rights and duties stipulated in this
Law and the Charter of the company.
Article 71.- Competence
to convene meetings of the General Assembly of Shareholders
1. The General Assembly of Shareholders shall meet
at least once a year.
2. The General Assembly of Shareholders shall be
convened:
a/ By a decision of the Board of Management;
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3. The Board of Management must convene a
meeting of the General Assembly of Shareholders within thirty days from the
date of receipt of the request stipulated in Point b, Clause 2 of this Article.
Where the Board of Management fails to do so,
the Control Board shall replace the Board of Management in convening the
meeting of the General Assembly of Shareholders in accordance with this Law.
Where the Control Board fails to convene the meeting,
the requesting shareholder or group of shareholders stipulated in Point b,
Clause 2 of this Article may replace the Board of Management and the Control
Board in convening the meeting of the General Assembly of Shareholders in
accordance with this Law.
All expenses for convening and conducting a
General Assembly of Shareholders shall be made up for by the company.
4. The convenor shall have to prepare a list of
shareholders entitled to attend meetings of the General Assembly of
Shareholders, provide information and settle complaints relating to the list of
shareholders, prepare the agenda and contents of the meeting, prepare
documents, determine the time and venue of the meeting, and send an invitation
to the meeting to each shareholder entitled to attend the meeting in accordance
with this Law.
Article 72.- List of
shareholders entitled to attend meetings of the General Assembly of
Shareholders
1. The list of shareholders entitled to attend
meeting of the General Assembly of Shareholders shall be prepared based on the
register of shareholders of the company. The list of shareholders entitled to
attend meeting of the General Assembly of Shareholders shall be prepared when a
decision to convene a meeting is made, and must be completed no later than ten
days before the opening date of the General Assembly of Shareholders� meeting.
2. The list of shareholders entitled to attend
meetings of the General Assembly of Shareholders shall specify the full name
and permanent addresses, for individuals; and the names and offices, for
organizations; and the number of shares of each type of each shareholder.
3. Every shareholder may be provided with the
information relating to himself/herself stated in the list of shareholders
entitled to attend meetings of the General Assembly of Shareholders.
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5. A shareholder may demand correction of wrong
information or supplement necessary information on himself/herself in the list
of shareholders entitled to attend meetings of the General Assembly of
Shareholders.
Article 73.- Agenda and
contents of the General Meeting of Shareholders meeting
1. The convenor of a meeting of the General
Assembly of Shareholders must prepare the agenda and contents of the meeting.
2. The shareholder or group of shareholders
stipulated in Clause 2, Article 53 of this Law may recommend matters to be
included in the agenda of meeting of the General Assembly of Shareholders. The
recommendation must be made in writing and be sent to the company no later than
three days before the date of opening. The recommendation must specify the name
of shareholder, the number of shares of each type of the shareholder and the
matters recommended for inclusion in the meeting agenda.
3. The convenor of a meeting of the General
Assembly of Shareholders may only refuse the recommendation stipulated in
Clause 2 of this Article in one of the following cases:
a/ The recommendation is not sent on time, is
insufficient, or is of an irrelevant matter;
b/ The recommended issue does not fall under the
jurisdiction of the General Assembly of Shareholders;
c/ Other cases stipulated in the Charter of the
company.
Article 74.- Invitation
to meetings of the General Assembly of Shareholders
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2. Enclosed with the invitation shall be the
agenda and discussion documents as the basis for passing decisions.
Article 75.- Right to
attend meetings of the General Assembly of Shareholders
1. Shareholders may attend meetings of the
General Assembly of Shareholders in person or authorize other persons in
writing to do so.
2. Where shares are assigned during the period
between the date of completion of the list of shareholders and the opening date
of a meeting of the General Assembly of Shareholders, the share assignee shall
be entitled to attend meeting of the General Assembly of Shareholders in place
of the assignor in respect of the assigned shares.
Article 76.- Conditions
and procedures for conducting meetings of the General Assembly of Shareholders
1. A meeting of the General Assembly of
Shareholders shall be conducted when the number of attending shareholders
represents at least 51% of the voting shares. The specific percentage shall be
stipulated by the Charter of the company.
2. Where the first meeting cannot be held as the
condition prescribed in Clause 1, this Article, is not met, the meeting may be
convened for the second time within thirty days from the planned opening date
of the first meeting. A General Assembly of Shareholders� meeting which is convened for the second time
shall be conducted when the number of attending shareholders represents at
least 30% of the voting shares. The specific percentage shall be stipulated by
the Charter of the company.
3. Where a meeting convened for the second time
cannot take place as the condition prescribed in Clause 2, this Article is not
met, it may be convened for the third time within twenty days from the planned
opening date of the second meeting. In this case, the General Assembly of
Shareholders shall meet, regardless of the number of attending shareholders.
4. Only the General Assembly of Shareholders may
make changes to the meeting�s
agenda sent together with the invitation as provided for in Clause 2, Article
74 of this Law.
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Article 77.- Approving decisions of the
General Assembly of Shareholders
1. The General Assembly of Shareholders shall
approve decisions which fall under its jurisdiction by way of voting at
meetings or obtaining written opinions.
2. A decision of the General Assembly of
Shareholders shall be passed at a meeting when:
a/ It is approved by a number of shareholders
representing at least 51% of the total voting shares of all attending
shareholders. The specific percentage shall be stipulated in the Charter of the
company.
b/ For decisions on types of shares and number
of shares of each type to be offered for sale; on amendments and supplements to
the Charter of the company; on reorganization or dissolution of the company; on
sale of more than 50% of the total value of assets recorded in the accounting
books of the company, they must be approved by a number of shareholders
representing at least 65% of the total voting shares of all attending
shareholders. The specific percentage shall be stipulated in the Charter of the
company.
3. Where a decision is passed by obtaining
written opinions, a decision of the General Assembly of Shareholders shall be
passed when it is approved by a number of shareholders representing at least
51% of the total voting shares. The specific percentage shall be stipulated in
the Charter of the company.
4. Decisions of the General Assembly of
Shareholders shall be notified to shareholders entitled to attend meetings of
the General Assembly of Shareholders within fifteen days from the date of their
approval.
Article 78.- Minutes of
the General Assembly of Shareholders’ meetings
1. Meetings of the General Assembly of
Shareholders shall be recorded in the minutes book of the company. A minutes
must contain the following principal contents:
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b/ Agenda;
c/ Chairman and secretary;
d/ Summary of opinions stated at the meeting of
the General Assembly of Shareholders;
e/ Issues discussed and voted on at the meeting
of the General Assembly of Shareholders; the number of votes in favor, number
of votes against and number of votes in abstention; and issues already
approved;
f/ Total number of votes of attending
shareholders;
g/ Total number of votes for each issue voted
on;
h/ Full names and signatures of the Chairman and
secretary.
2. The minutes of a meeting of the General
Assembly of Shareholders shall be completed and approved before the closing of
the meeting.
Article 79.- Request
for cancellation of decisions of the General Assembly of Shareholders
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1. The procedures for convening a meeting of the
General Assembly of Shareholders fail to comply with this Law and the Charter
of the company;
2. The content of the decision breaches the
provisions of law or the Charter of the company.
Article 80.- The Board
of Management
1. The Board of Management is the body managing
the company, and shall have full authority to make decisions in the name of the
company on all issues relating to the objectives and benefits of the company,
except for issues which fall under the jurisdiction of the General Assembly of
Shareholders.
2. The Board of Management shall have the
following rights and duties:
a/ To decide the development strategies of the
company;
b/ To recommend the types of shares and total
number of shares of each type to be offered for sale;
c/ To decide the sale offer of new shares within
the number of shares of each type which may be offered; to make decisions on
mobilizing additional fund in other forms;
d/ To make decisions on investment plans;
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f/ To appoint, dismiss or remove the Director
(General Director) and other key managers of the company; to make decisions on
the salaries and other benefits of such managers;
g/ To decide the organizational structure as
well as internal management rules of the company, to decide the establishment
of subsidiary companies, establishment of branches and/or representative
offices, and the capital contribution to or purchase of shares from other
enterprises;
h/ To submit annual final financial reports to
the General Assembly of Shareholders;
i/ To recommend the dividend rates to be paid,
to decide the time limit and procedures for payment of dividends or for dealing
with losses incurred in the business operation;
k/ To decide the price offered for sale of
shares and bonds of the company; to value assets contributed as capital which
are neither Vietnamese currency, freely convertible foreign currency, nor gold;
l/ To approve the agendas and documents of
meetings of the General Assembly of Shareholders; to convene the General
Assembly of Shareholders’ meetings or to carry out the procedures for obtaining
comments for approval of decisions of the General Assembly of Shareholders;
m/ To decide the redemption of not more than 10%
of the number of shares of each type which have been sold;
n/ To recommend reorganization or dissolution of
the company;
o/ Other rights and duties prescribed in this
Law and the Charter of the company.
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4. The Board of Management shall be composed of
not more than eleven members. The term, qualifications and specific number of
members of the Board of Management shall be stipulated in the Charter of the
company.
Article 81.- Chairman
of the Board of Management
1. The Board of Management shall elect the
Chairman of the Board of Management from its members. The Chairman of the Board
of Management may act concurrently as the Director (General Director) of the
company unless otherwise provided for by the Charter of the company.
2. The Chairman of the Board of Management shall
have the following rights and duties:
a/ To prepare working plans and programs of the
Board of Management;
b/ To prepare programs, agendas and documents
for the Board of Management�s
meetings; to convene and preside over meetings of the Board of Management;
c/ To organize the approval of the Board of
Management’s decisions in other manners;
d/ To monitor the implementation of the
decisions of the Board of Management;
e/ To preside over meetings of the General
Assembly of Shareholders;
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3. Where the Chairman of the Board of Management
is absent or has lost the capacity to perform his assigned tasks, a member
authorized by the Chairman of the Board of Management shall exercise the rights
and perform the duties of the Chairman of the Board of Management. Where no one
is authorized, the remaining members shall select one among them to temporarily
hold the position of the Chairman of the Board of Management.
Article 82.- Meetings
of the Board of Management
1. The Chairman of the Board of Management may
convene meetings of the Board of Management:
a/ At least once every quarter, and may convene
extraordinary meetings when necessary;
b/ At the request of the Control Board or other
persons as prescribed in the Charter of the company.
2. A Board of Management meeting shall be
conducted when it is attended by two thirds or more of the total members. A
decision of the Board of Management is passed when it is approved by the
majority of the attending members. In case of a tied vote, the final decision
shall be in favor of the side with the vote of the Chairman of the Board of
Management.
3. The procedures for convening and conducting a
Board meeting shall be stipulated in the Charter or the internal management
rules of the company.
4. The Board of Management’s meetings shall be
fully recorded in the minutes book. The Chairman and the secretary shall be
jointly responsible for the accuracy and truthfulness of minutes of Board
meetings.
Article 83.- The Board
of Management members’ right to be provided with information
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2. Managers who are so requested must provide
all information and documents promptly and accurately as requested by members
of the Board of Management.
Article 84.- Dismissal,
removal and addition of members of the Board of Management
1. A member of the Board of Management shall be
removed in the following cases where:
a/ His/her capacity for civil act is lost or
restricted;
b/ He/she resigns;
c/ Other cases defined in the Charter of the
company.
2. Members of the Board of Management shall be
dismissed by decisions of the General Assembly of Shareholders.
3. Where the number of Board members is reduced
to less than one third of the number stipulated in the Charter of the company,
the Board of Management shall convene a meeting of the General Assembly of
Shareholders within sixty days to elect additional Board members.
In other cases, the next meeting of the General
Assembly of Shareholders shall elect new Board members to replace Board members
who have been removed or dismissed.
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1. The Board of Management shall appoint one of
its members or another person to be the Director (General Director). The
Chairman of the Board of Management may concurrently act as the Director
(General Director) of the company. Where the Charter of the company does not
provide that the Chairman of the Board of Management is the legal representative,
the Director (General Director) shall be the legal representative of the
company.
Director (General Director) manages the
day-to-day operation of the company and is answerable to the Board of
Management for the exercise of his/her delegated powers and the performance of
his/her assigned tasks.
2. Director (General Director) shall have the
following powers and duties:
a/ To decide all issues relating to the day to
day operation of the company;
b/ To organize the implementation of decisions
of the Board of Management;
c/ To organize the materialization of business
plans and investment plans of the company;
d/ To propose plans on the organizational
structure and internal management rules of the company;
e/ To appoint, remove or dismiss management personnel
in the company except for those appointed, removed or dismissed by the Board of
Management;
f/ To make decisions on salary and allowances
(if any) for employees of the company, including managers who may be appointed
by the Director (General Director);
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Article 86.- Obligations
of managers of the company
The Board of Management, the Director (General
Director) and other managers shall, within their responsibilities and powers,
have the following obligations:
1. To exercise their delegated powers and
perform their assigned tasks honestly and diligently in the interest of the
company and of shareholders of the company;
2. Not to abuse their positions and powers or to
use assets of the company for personal benefits of their own or of other
persons; not to give away assets of the company to others; not to disclose
secrets of the company, except where approved by the Board of Management;
3. When the company fails to pay all its due
debts and other property obligations:
a/ To inform all creditors of the financial
situation of the company;
b/ Not to increase salary or to pay any bonus to
employees of the company, including managers;
c/ To be personally liable for any damage caused
to creditors due to the failure to perform the obligations prescribed in Points
a and b of this Clause;
d/ To propose measures to overcome the financial
difficulties of the company;
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Article 87.- Contracts
which must be approved by the General Assembly of Shareholders or the Board of
Management
1. Economic and civil contracts between the
company and members of the Board of Management, the Director (General
Director), members of the Control Board, shareholders holding more than 10% of
the voting shares or their related persons may only be signed according to the
following regulations:
a/ Contracts having a value larger than 20% of
the total value of assets recorded in the accounting books of the company must
be approved by the General Assembly of Shareholders prior to their signing.
Shareholders who sign such contracts or have related persons signing such
contracts shall not be entitled to vote;
b/ Contracts having a value equal to 20% or less
of the total value of assets recorded in the accounting books of the company
must be approved by the Board of Management prior to their signing. Board
members who sign such contracts or have related persons signing such contracts
shall not be entitled to vote;
2. Where any contract referred to in Clause 1 of
this Article is signed without prior approval of the General Assembly of
Shareholders or the Board of Management, such contract shall be null and void
and dealt with according to law. Persons causing damage to the company shall
have to make compensation therefor.
Article 88.- Rights and
duties of the Control Board
1. A joint-stock company having more than eleven
shareholders must have a Control Board composed of three to five members, of
whom at least one member must be professionalized in accountancy. The Control
Board shall elect one of its members to be the Head; and the Head of the
Control Board must be a shareholder. The rights and duties of the Head of the
Control Board shall be stipulated in the Charter of the company.
2. The Control Board shall have the following
rights and duties:
a/ To inspect the reasonability and legality in
the management and administration of business activities, in books of accounts
and financial reports;
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c/ To inform the Board of Management regularly
of the results of the operations; to consult the Board of Management prior to submission
of reports, conclusions and recommendations to the General Assembly of
Shareholders;
d/ To report to the General Assembly of
Shareholders on the accuracy, truthfulness and legality of the manner in which
vouchers, books of account, financial reports and other reports of the company
are kept and made; and on the honesty and legality in the management and
administration of business operation of the company;
e/ To recommend changes and/or improvements of
the organizational structure, the management and administration of business
operation of the company;
f/ Other rights and duties as prescribed by this
Law and the Charter of the company.
The inspection stipulated in Points a and b of
this Clause may not obstruct the routine activities of the Board of Management
and shall not interrupt the administration of day-to-day business operation of
the company.
Article 89.- Provision
of information to the Control Board
The Board of Management and its members, Director
(General Director) and other managers shall have to provide promptly and fully
information and documents on the business operation of the company at the
request of the Control Board, except otherwise decided by the General Assembly
of Shareholders.
The Control Board and its members must not
disclose secrets of the company.
Article 90.- People who
must not act as members of the Control Board
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2. Persons who are being examined for penal
liability, are serving imprisonment sentences, or who have their practicing
right revoked by a court for having committed offences of smuggling, producing
fake goods, trading in fake goods, conducting illegal business, tax evasion,
deceiving customers and other offences as prescribed by law.
Article 91.- Other
issues related to the Control Board
The term of the Control Board and the working
regulations and remuneration for its members shall be stipulated by the Charter
of the company or decided by the General Assembly of Shareholders.
The Control Board shall be accountable to the
General Assembly of Shareholders for breaches in the course of performing its
duty, which cause damage to the company.
Article 92.- Auditing
requirements
For joint-stock companies which must be audited
as required by law, their annual financial reports must be verified by independent
auditing organizations prior to submission to their the General Assembly of
Shareholders for consideration and approval.
Article 93.- Disclosure
of information on joint-stock companies.
1. Within ninety days after the end of a fiscal
year, a joint-stock company must submit its annual financial report approved by
the General Assembly of Shareholders to the tax office and the business
registration body.
2. The summary of annual financial report must
be sent to all shareholders.
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Article 94.- File-keeping
regime of joint-stock companies
1. Joint-stock companies shall have to keep the
following documents:
a/ Charter of the company; amendments and
supplements to the Charter of the company; internal management rules of the
company; and register of shareholders;
b/ Business registration certificate;
certificate of business registration alteration; certificate of industrial
property rights; certificate of registration of product quality;
c/ Documents and papers certifying the ownership
of assets of the company;
d/ Minutes of meetings of the General Assembly
of Shareholders and the Board of Management; decisions already approved;
e/ Prospectus for issuance of securities;
f/ Reports of the Control Board, conclusions of
inspection bodies, conclusions of independent auditing organizations;
g/ Books of accounts, accounting vouchers,
annual financial reports;
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2. Joint-stock companies must keep the documents
referred to in Clause 1 of this Article at their head-offices or elsewhere,
provided that the shareholders and the business registration body are informed
thereof. The documents shall be kept for a duration as prescribed by law.
Chapter V
PARTNERSHIPS
Article 95.- Partnership
1. A partnership is an enterprise in which:
a/ There must be at least two partnership members;
besides such members, there may be capital-contributing members;
b/ The partnership members must be individuals
who have professional qualifications and credibility, and shall be liable for
the obligations of the partnership with all their assets;
c/ Capital-contributing members shall only be
liable for the debts of the partnership within the amount of capital they have
contributed to the company;
2. Partnerships shall not be entitled to issue
any type of securities.
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1. The partnership members may manage the
partnership; conduct business activities in the name of the partnership; and
shall be jointly liable for the obligations of the partnership.
2. The capital-contributing members shall be
entitled to the distribution of profits according to the ratio stipulated in
the Charter of the partnership; shall not be entitled to take part in the
management of the partnership or to conduct business activities in the name of
the partnership.
3. Members of a partnership shall have other
rights and obligations as prescribed by law and the Charter of the partnership.
Article 97.- Management
of partnerships
1. The organizational and managerial structure
of a partnership shall be agreed upon by partnership members in the Charter of
the partnership.
2. The partnership members shall have equal
right in deciding issues related to the management of the partnership.
Article 98.- Specific
provisions on the establishment, organization, management and operation of
partnerships
Based on this Law and other relevant provisions
of law, the Government shall specify the establishment, organization,
management and operation of partnerships.
Chapter VI
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Article 99.- Private
enterprises
A private enterprise is an enterprise owned by
one individual who shall be liable for all activities of the enterprise with
all his/her assets.
Article 100.- Investment
capital of enterprise owners
1. The investment capital of the owner of a
private enterprise shall be declared by himself/herself. The owner of a private
enterprise shall have to declare accurately the total investment capital,
clearly stating the amounts of capital in Vietnamese dong, in freely
convertible foreign currency, in gold or in other assets; for the amount of capital
in other assets, the types of asset, quantity and residual value of each type
of assets must be clearly stated.
2. All the capital and assets, including
borrowed capital and leased assets, used for the business operations of an
enterprise shall be recorded fully in its books of accounts and financial
statements.
3. In the course of operation, the owner of a
private enterprise may increase or reduce his/her capital invested in the
business operation of the enterprise. The increase or reduction of the investment
capital of the enterprise owner must be recorded fully in the books of account.
The owner of a private enterprise may only reduce the investment capital below
the registered amount of investment capital after declaring it with the
business registration body.
Article 101.- Management
of enterprises
1. The owner of a private enterprise has the
full power to decide all business activities of the enterprise; and the full
power to decide the use of profits after payment of taxes and performance of other
financial obligations as stipulated by law.
The owner of a private enterprise may himself or
employ other persons to manage and administer the business operations. Where
another person is employed as the Director managing the enterprise, the private
enterprise owner must declare such with the business registration body and
shall still be responsible for all business activities of the enterprise.
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3. The owner of a private enterprise shall be
the legal representative of the enterprise.
Article 102.- Lease of
enterprises
The owner of a private enterprise may lease
his/her whole enterprise provided that a written report and a notarized copy of
the lease contract must be submitted to the business registration body and the
tax office. During the leasing term, the owner of the private enterprise is
still responsible before law in his/her capacity as the owner of the
enterprise. The rights and responsibilities of the owner and the lessee with
respect to the business activities of the enterprise shall be provided for in
the lease contract.
Article 103.- Sale of
private enterprises
1. The owner of a private enterprise may sell
his/her enterprise to other persons. No later than fifteen days before the date
of transfer of the enterprise to the purchaser, the owner of the enterprise shall
have to send to the business registration body a written notice. Such notice
shall specify the name and head office of the enterprise; the name and address
of the purchaser; the total amount of outstanding debts of the enterprise; the
name and address of, the amount of the debt and the time of repaying the debt
to, each creditor; labor contracts and any other contracts which have been
signed but not yet fully performed, and the ways of dealing with such
contracts.
2. After the enterprise is sold, the owner of
the private enterprise shall still be liable for all debts and other property
obligations which have not yet been fulfilled by the enterprise, except where
otherwise agreed by the purchaser, the seller and creditors of the enterprise.
3. The purchaser and seller of an enterprise
must comply with the provisions of the legislation on labor.
4. The purchaser of an enterprise must
re-register the business in accordance with the provisions of this Law.
Article 104.- Suspension
of operation
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Chapter VII
REORGANIZATION,
DISSOLUTION AND BANKRUPTCY OF ENTERPRISES
Article 105.- Division
of enterprises
1. Limited liability companies and joint-stock
companies may be divided into a number of companies of the same type.
2. The procedures for division of a limited
liability company or a joint-stock company are as follows:
a/ The Members’ Council, the owner of the
company or the General Assembly of Shareholders of the to be-divided company shall
approve a decision to divide the company in accordance with the provisions of
this Law and the Charter of the company. The decision on division of a company
shall contain the following principal details: the current name and office of
the company; the number of companies to be established; the principles and
procedures for division of assets of the company; the plan for employment of
laborers; the time limit and procedures for transfer of shares of equity,
shares and bonds of the divided company to the newly-established companies; the
principles for dealing with the obligations of the divided company; and the
time limit for effecting the division of the company. The decision on division
of the company shall be sent to all creditors and notified to the laborers
within fifteen days from the date it is approved;
b/ Members, owners or shareholders of
newly-established companies shall approve the Charter, elect or appoint the
Chairmen of their respective Members’ Councils, Chairmen of the companies, the
Boards of Management, Directors (General Directors); and register business in
accordance with this Law. In this case, the business registration dossiers
shall include the decision on division of the company as prescribed in Point a
of this Clause.
3. After the new companies have registered their
business, the divided company ceases to exist. The new companies shall be
jointly liable for the outstanding debts, labor contracts and other property
obligations of the divided company.
Article 106.- Separation
of enterprises
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2. The procedures for separation of limited liability
company or a joint-stock company are stipulated as follows:
a/ The Members’ Council, the owner or the
General Assembly of Shareholders of the separated company shall approve a
decision to separate the company in accordance with the provisions of this Law
and the Charter of the company. The decision on separation of the company shall
contain the following principal contents: the name and office of the separated
company; the number of separating companies to be set up; the plan for
employment of laborers; the value of assets, rights and obligations to be
transferred from the separated company to the separating company(ies); and the
time limit for effecting the separation of the company. The decision on
separation of the company shall be sent to all creditors and notified to the
laborers within fifteen days from the date it is approved;
b/ Members, owners or shareholders of the
separating company(ies) shall approve the Charter, elect or appoint the
Chairman of the Members’ Council, Chairman of the company, the Board of
Management, Director (General Director); and register business in accordance
with this Law. In this case, the business registration dossier shall include
the decision on separation of the company as prescribe in Point a of this
Clause.
3. After the business registration, the
separated company and the separating company(ies) shall be jointly liable for
the outstanding debts, labor contracts and other property obligations of the
separated company.
Article 107.- Consolidation
of enterprises
1. Two or more companies of the same type
(hereinafter referred to as consolidating companies) may be consolidated into a
new company (hereinafter referred to as the consolidated company) by way of
transferring all lawful assets, rights, obligations and interests to the
consolidated company and at the same time, terminating the existence of the
consolidating companies.
2. The procedures for consolidation of companies
are stipulated as follows:
a/ Consolidating companies shall prepare a
consolidation contract. The consolidation contract shall contain the following
principal contents: the names and offices of the consolidating companies; the
name and office of the consolidated company; the consolidation procedures and
terms; the plan for employment of laborers; the time limit, procedures and
conditions for conversion of assets; for conversion of shares of equity, shares
and bonds of the consolidating companies into those of the consolidated
company; the time limit for effecting the consolidation, and the draft Charter
of the consolidated company;
b/ Members, owners or shareholders of the
consolidating companies shall approve the consolidation contract, the Charter
of the consolidated company, elect or appoint the Chairman of the Members’
Council, Chairman of the company, the Board of Management, the Director
(General Director) of the consolidated company; and register the business of
the consolidated company in accordance with this Law. In this case, the
business registration dossier shall include the consolidation contract. The
consolidation contract shall be sent to all creditors and notified to laborers
within fifteen days from the date it is approved.
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Article 108.- Merger
of enterprises
1. One or several companies of the same type
(hereinafter referred to as the merged companies) may be merged into another
company (hereinafter referred to as the merging company) by way of transferring
all lawful assets, rights, obligations and interests to the merging company and
at the same time, the merged companies shall cease to exist.
2. The procedures for merger of companies are
stipulated as follows:
a/ The involved companies shall prepare a merger
contract and charter of the merging company. The merger contract must contain
the following principal contents: the name and office of the merging company;
the name(s) and office(s) of the merged company(ies); the procedures and terms
for the merger; the plan for employment of laborers; the time limit, procedures
and conditions for conversion of assets; for conversion of shares of equity,
shares and bonds of the merged company(ies) to shares of equity, shares and
bonds of the merging company; and the time limit for effecting the merger.
b/ Members, owners or shareholders of involved
companies shall approve the merger contract and the Charter of the merging
company; and register the business of the merging company in accordance with
this Law. In this case, the business registration dossier shall include the
merger contract. The merger contract shall be sent to all creditors and
notified to the laborers within fifteen days from the date it is approved.
c/ After the business registration, the merging
company shall enjoy the lawful rights and interests and be liable for the
outstanding debts, labor contracts and other property obligations of the merged
companies.
Article 109.- Conversion
of companies
Limited liability companies may be converted to
joint-stock companies and vice versa. The procedures for converting limited
liability companies or joint-stock companies (hereinafter referred to as
converting companies) respectively to joint-stock companies or limited
liability companies (hereinafter referred to as converted companies) are
stipulated as follows:
1. The Members’ Council, owners or the General
Assembly of Shareholders shall approve a decision on conversion and the charter
of the converted company. The decision on conversion must contain the following
principal contents: the name and office of the converting company; the name and
office of the converted company; the time limit and conditions for conversion
of assets, shares of equity, shares and bonds of the converting company to
assets, shares of equity, shares and bonds of the converted company; the plan
for employment of laborers; and the time limit for effecting the conversion.
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3. The business of the converted company shall
be registered in accordance with the provisions of this Law. In this case, the
business registration dossier shall include the conversion decision.
After the business registration, the converting
company shall cease to exist. The converted company shall enjoy all the lawful
rights and interests and be liable for the outstanding debts, labor contracts
and other property obligations of the converting company.
Article 110.- Conversion
of one-member limited liability companies
1. Where a company owner assigns a part of the
charter capital to another organization or individual, within fifteen days from
the date of assignment, the company owner and the assignee must register the
change in the number of members with the business registration body. From the
date of registration of the change stipulated in this Clause, the company shall
be managed and shall operate in accordance with the provisions regarding
limited liability companies with two or more members.
2. Where a company owner assigns the entire
charter capital to one individual, within fifteen days from the date of
completion of the procedures for assignment, the company owner must request the
business registration body to remove the name of the company in the business
register, and the assignee must register the business as a private enterprise
in accordance with the provisions of this Law. The assignee shall assume all
obligations and all lawful rights and interests of the limited liability
company, except otherwise agreed by the company owner, the assignee and the
creditors of the company.
Article 111.- Cases of
dissolution of enterprises
1. The operational duration stated in the
Charter expires and there is no decision to extend.
2. By decisions of the enterprise owners, for
private enterprises; of all partnership members, for partnerships; of the
Members’ Council or company owners in case of limited liability companies; of
the General Assembly of Shareholders, for joint-stock companies.
3. The company does not have the minimum number
of members stipulated in this Law for a consecutive period of six months.
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Article 112.- Procedures
for dissolution of enterprises
The dissolution of enterprises shall be carried
out in accordance with the following provisions:
1. A decision on the dissolution of an
enterprise is approved in accordance with the provisions of this Law. The
decision on dissolution of an enterprise must contain the following principal
contents:
a/ Name and office of the enterprise;
b/ Reasons for dissolution;
c/ Time limit and procedures for liquidating
contracts and paying debts of the enterprise; the time limit for debt payment
and contract liquidation shall not exceed six months from the date the decision
on dissolution is approved;
d/ Plan for dealing with obligations arising
from labor contracts;
e/ Establishment of an asset liquidation group
whose rights and duties shall be stipulated in an appendix to the dissolution
decision;
f/ Signature of the legal representative of the enterprise.
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The decision on dissolution must be sent to
creditors together with notice on the settlement of the debts. Such a notice
shall include the name and address of the creditor; the amount of the debt, the
time limit, location and method of paying such debt; the method and time limit
for dealing with complaints of creditors.
3. Liquidating the assets and paying the debts of
the enterprise.
4. Within seven days after all the debts of the
enterprise are fully paid, the liquidation group shall have to send the
dossiers related to the dissolution of the enterprise to the business
registration body.
Within seven days from the date of receipt of
the dossiers related to the dissolution of the enterprise, the business
registration body shall remove the name of the enterprise from the business
register.
5. Where the business registration certificate
of an enterprise is withdrawn, the enterprise must be dissolved within six
months from the date of withdrawal of the business registration certificate.
The order and procedures for dissolution shall comply with the provisions in
this Article.
Article 113.- Bankruptcy
of enterprises
The bankruptcy of enterprises shall comply with
the legislation on business bankruptcy.
Chapter VIII
STATE MANAGEMENT OVER
ENTERPRISES
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1. To promulgate, disseminate and organize the
implementation of legal documents on enterprises.
2. To organize business registration; to provide
guidance for business registration to ensure the implementation of strategies,
planning, orientation and plans for socio-economic development.
3. To organize and manage professional training
and fostering, and enhancement of business ethics of enterprise managers, of
professional, ethical and political qualifications of officials in charge of
the State management over enterprises; and training and building up a
contingent of skilled workers.
4. To implement incentive policies toward
enterprises in accordance with the orientation and objectives of the
strategies, planning and plans for socio-economic development.
5. To examine and inspect enterprises; and to
supervise the business operations of enterprises through the system of
periodical financial statements and other reports.
Article 115.- Bodies
in charge of the State management over enterprises
1. The Government shall exercise the uniform
State management of enterprises.
2. Ministries, ministerial level agencies and
agencies attached to the Government shall, within their tasks and powers, be
responsible for exercising the State management of enterprises in their
delegated fields.
The Government shall provide for the coordination
between ministries, ministerial-level agencies and agencies attached to the
Government in the State management of enterprises.
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a/ To exercise the State management over
enterprises within their respective localities in accordance with the
provisions of law;
b/ To organize business registration; to
inspect, examine and supervise the operation of enterprises within their
localities;
c/ To guide and instruct the People’s Committees
of rural and urban districts, and provincial capital and cities in the
coordination of the exercise of the State management over enterprises.
4. The business registration body shall be
provided for by the Government.
Article 116.- Powers
and responsibilities of the business registration body
1. To effect the business registration and to
issue business registration certificates as prescribed by law.
2. To establish and manage a system of information
on enterprises; to provide information to State bodies, organizations and
individuals at their requests as prescribed by law.
3. To request enterprises to report on their
business situation where it deems necessary for the implementation of the
provisions of this Law; to urge the implementation of the reporting regime by
enterprises.
4. To directly examine or to request the
competent State body to examine enterprises with respect to the matters in the
business registration dossiers.
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6. To be responsible before law for breaches
committed in the course of business registration.
7. To exercise other powers and perform other
responsibilities as prescribed by law.
Article 117.- Inspection
of the business operation of enterprises
1. The inspection of the business operation of
enterprises shall be carried out in accordance with the functions and powers
and in accordance with law.
Financial inspection shall be conducted no more
than once each year for each enterprise. The duration of inspection shall not
exceed thirty days, and may be extended in special cases as decided by the
competent superior authority, but not exceeding thirty days.
Irregular inspection shall only be conducted
when there are grounds showing breaches of law by the enterprise.
2. An inspection may only be conducted under a
decision of the competent authority; minutes recording conclusions of the
inspection must be made when the inspection is completed. The head of the
inspection team shall be responsible for the contents of the minutes and
conclusions of the inspection.
3. Where a person issues an inspection decision
not in accordance with the law or takes advantage of the inspection to gain
personal benefits, harass or obstruct the operation of an enterprise, such
person shall, depending on the seriousness of the breach, be disciplined or
examined for penal liability; and must compensate the enterprise for any damage
caused in accordance with the law.
Article 118.- Fiscal
year and financial statements of enterprises
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2. Annual financial statements of an enterprise
shall comprise the balance sheet and the profit and loss statement.
3. Within thirty days, for private enterprises
and partnerships, and ninety days, for limited liability companies and
joint-stock companies, after the final day of a fiscal year, the annual
financial statements of enterprises must be sent to the competent tax office
and the business registration body; where an enterprise has subsidiary(ies), a
notarized copy of the financial statements of the subsidiary(ies) for the same
year must also be included.
Chapter IX
COMMENDATION, REWARDS
AND DEALING WITH BREACHES
Article 119.- Commendation
and rewards
Organizations, individuals and enterprises
recording outstanding achievements in business, in raising the efficiency and
competitiveness of enterprises, or making major contribution to the national
construction, defense and development shall be commended or rewarded in
accordance with law.
Article 120.- Acts of
breaching the Law on Enterprises
1. Granting business registration certificates
to unqualified persons or refusing to grant business registration certificates
to persons satisfying the conditions stipulated in this Law.
2. Violating the provisions on examination and
inspection of the operation of enterprises.
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4. Declaring dishonestly, inaccurately or
untimely the contents or the alterations to the contents of business
registration dossiers of an enterprise.
5. Deliberately valuing assets contributed as
capital higher than their actual value.
6. Failing to submit annual financial statements
to the competent State body in accordance with this Law or to submit untrue or
inaccurate statements.
7. Preventing members, owners or shareholders
from exercising their rights in accordance with this Law and the Charter of the
company.
8. Other acts breaching the provisions of this
Law.
Article 121.- Forms of
dealing with breaches
1. Depending on the nature and seriousness of
each breach, persons committing breaches of the provisions of this Law shall be
disciplined, administratively sanctioned a examined for penal liability
according to law.
2. Where a breach causes damage to the interests
of an enterprise, its owners, members or shareholders, or of other persons, the
person in breach shall have to compensate as prescribed by law.
3. The business registration certificate of an
enterprise shall be revoked in the following cases:
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b/ Stopping business activities for one full
year without informing the business registration body thereof;
c/ Failing to report on business activities of
the enterprise to the business registration body for two consecutive years;
d/ Failing to send reports stipulated in Clause
3 of Article 116 of this Law to the business registration body within six
months from the date it is so requested in writing;
e/ Conducting prohibited lines of business.
Chapter X
IMPLEMENTATION
PROVISIONS
Article 122.- Effectiveness
1. This Law shall take effect as from January
1st 2000.
2. This Law shall replace the Law on Companies,
the Law on Private Enterprises of December 21, 1990, the Law on Amendments and
Supplements to a Number of Articles of the Law on Companies, and the Law on
Amendments and Supplements to a Number of Articles of the Law on Private
Enterprises of June 22, 1994.
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Article 123.- Application
to enterprises established prior to the effective date of this Law
1. Limited liability companies, joint-stock
companies and private enterprises established under the Law on Companies, the
Law on Private Enterprises of December 21, 1990, the Law on Amendments and
Supplements to A Number of Articles of the Law on Companies and the Law on
Amendments and Supplements to A Number of Articles of the Law on Private
Enterprises of June 22, 1994 shall not have to carry out the procedures for
business re-registration.
Limited liability companies and joint-stock
companies whose charters are not in accordance with this Law must amend or
supplement their charters within two years from the date this Law takes effect.
Where charters of companies are not amended or supplemented within this
time-limit, such charters shall be considered invalid.
2. The Government shall guide and create
favorable conditions for large-scale business households operating under Decree
No. 66/HDBT March 2, 1992 of the Council of Ministers to convert themselves
into enterprises, register business and operate in accordance with this Law.
Small-scale individual business households shall
register business and operate under regulations of the Government.
Article 124.- Guiding
the implementation
The Government shall detail and guide the
implementation of this Law.
This Law was passed by the Xth National
Assembly of the Socialist Republic of Vietnam at its 5th session of June 12,
1999.
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THE NATIONAL ASSEMBLY
Nong Duc Manh