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NATIONAL
ASSEMBLY
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
60/2005/QH11
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Hanoi,
November 29, 2005
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LAW
ON ENTERPRISES
Pursuant to the 1992 Constitution of
the Socialist Republic of Vietnam, which was amended and supplemented under
Resolution No. 51/2001/QH10 of December 25, 2001, of the Xth National Assembly,
the 10th session;
This Law provides for enterprises.
Chapter I
GENERAL
PROVISIONS
Article
1.- Scope of regulation
This Law
provides for the establishment, management organization and operation of
limited liability companies, joint-stock companies, partnerships and private
enterprises (hereinafter referred collectively to as enterprises) of all
economic sectors; and groups of companies.
Article
2.- Subjects of application
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2.
Organizations and individuals involved in the establishment, management
organization and operation of enterprises.
1. The establishment, management organization
and operation of enterprises of all economic sectors shall comply with the
provisions of this Law and other relevant laws.
2.In specific cases where the establishment,
management organization and operation of enterprises are provided for in other
laws, the provisions of those laws shall apply.
3. Where treaties to which the Socialist
Republic of Vietnam is a contracting party contain provisions different from
those of this Law, the provisions of such treaties shall apply.
In this Law, the following terms shall be
construed as follows:
1. Enterprise means an economic organization
that has its own name, assets, stable transaction office and has been lawfully
registered for the purpose of conducting business.
2. Business means the continuous
implementation of one, several or all of stages of an investment process, from
the production to the sale of products or provision of services on the market
for profit purposes.
3. Valid dossier means a dossier that
comprises all documents as required by this Law, whose contents are completely
filled in as required by law.
4. Capital contribution means the transfer of
assets into a company so as to become an owner or joint owners of the company.
Assets used for capital contribution can be Vietnamese currency, freely
convertible foreign currency, gold, value of land use rights, value of
intellectual property rights, technology, technical know-how, or other types of
assets that are contributed to the capital of a company by its members and
stated in the company's charter.
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6. Charter capital means the amount of
capital that is contributed or committed to contribute within a definite period
by members or shareholders of a company and is stated in that company's
charter.
7. Legal capital means the minimum amount of
capital that is required by law for an enterprise to be established.
8. Voting capital means the capital share or
equity of which the owner shall have the right to vote on matters falling under
the deciding competence of the Members' Council or the Shareholders' Meeting.
9. Dividend means the net profit in terms of
money or asset paid to the owner of each share from residual profit of the
company after financial obligations have been performed.
10. Founding member means an organization or
individual that makes capital contribution, participates in formulating,
approves and signs the original charter of a limited liability company or
partnership.
11. Shareholder means a person owning at
least one share issued by a joint-stock company.
Founding shareholder means a shareholder that
participates in formulating, approves and signs the original charter of a
joint-stock company.
12. General partner means a member who is
responsible for all obligations of a partnership with all of his/her own
property.
13. Enterprise manager means the owner,
director of a private enterprise, general partner of a partnership, chairman of
the Members' Council, president of the company, member of the Management Board,
director or general director or another important managerial position provided
for in the company's charter.
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15.
A company is considered a parent company of another company when it is:
a/ Owning more than 50% of charter capital or
total number of ordinary shares issued by the other company;
b/ Having the right to appoint or dismiss directly or
indirectly a majority of or all members of the Management Board, director or
general director of the other company;
c/ Having the right to decide on amendments
and/or supplements to the charter of the other company.
16. Reorganization of an enterprise means the
division, separation, consolidation, merger or transformation of an enterprise.
17. Related persons means organizations and
individuals that have direct or indirect relationships with an enterprise in the
following cases:
a/ Parent company, its managers and other
persons who are competent to appoint managers of its subsidiary company;
b/ Subsidiary company in relation to its
parent company;
c/ Persons or group of persons who are capable
of dominating the decision-making process or operations of an enterprise
through management bodies in that enterprise;
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e/ Wife,
husband, father, adoptive father, mother, adoptive mother, child, adopted
child, or sibling of an enterprise manager or a member or shareholder holding
dominant capital share or shares.
f/ Individuals who are authorized
representatives of those specified at Points a, b, c, d, e, of this Clause;
g/ An enterprise where persons specified at Points a, b, c, d, e, f and h of this Clause hold
shares to the level that they can control the decision-making process
of the management bodies of the enterprise;
h/ Any group of persons who agree to take
concerted actions to take over the capital contribution, shares or benefits, or
control the decision-making process of the company.
18.
State-owned capital contribution means the capital contribution
originating from the state budget and other state capital sources and held by a
state agency or economic organization in the capacity as representative of its
owner.
State-owned share means a share paid with
capital from the state budget or other state capital sources and held by a
state agency or economic organization in the capacity as representative of its
owner.
19. Market price of the capital
contribution or share means the transactional price in the security market or
price defined by a professional valuation organization.
20. Nationality of an enterprise means
the nationality of a country or territory where such an enterprise is
established and registered.
21. Permanent address means the address of
the head office of an organization, permanent residence address or office
address or any other address of an individual that is registered with the
enterprise as contact address;
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Article 5.- State
guaranty toward enterprises and their owners
1. The State recognizes the long lasting existence
and development of all types of enterprise defined in this Law; ensures
equality of enterprises before law regardless of form of ownership and economic
sector; and recognizes the lawful profitability of business activities.
2. The State recognizes and protects
ownership rights over properties, invested capital, income, rights and other
lawful interests of enterprises and their owners.
3. The lawful
property and invested capital of enterprises and their owners shall be neither
nationalized nor expropriated by administrative measures.
In extremely
necessary cases where assets of enterprises are compulsorily purchased or
requisitioned for the reason of national defense, security or national
interest, those enterprises shall be paid or compensated at the market prices
of these assets at the time of compulsory purchase or requisition. Payment and
compensation must ensure the enterprises' interests and nondiscrimination
between types of enterprise.
Article 6.- Political and
socio-political organizations in enterprises
1.
Political and socio-political organizations within enterprises shall operate
within the framework of the Constitution and laws as well as charters of these
organizations which are in accordance with the provisions of law.
2.
Enterprises are obliged to respect and create favorable conditions for their
laborers to establish and participate in organizations defined in Clause 1 of
this Article.
Article
7.- Business lines and conditions
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2. Enterprises may conduct business lines
that are subject to certain conditions as required by the investment law and
other relevant laws only if they meet all of such conditions.
Business
conditions are requirements that enterprises must satisfy or fulfill in order
to conduct a specific business line and are manifested in forms of business
license, certificate of satisfaction of business conditions, practice
certificate, certificate of professional liability insurance, requirement on
legal capital or other requirements.
3.
Any business activities that may cause adverse impacts on national defense,
security, social order and safety, historical traditions, culture, ethics, fine
practices and customs of Vietnam, health of the people, destroy natural
resources or degrade the environment are strictly prohibited.
The Government shall specify the list of
banned business lines.
4. The Government shall review and assess
periodically all or some of business conditions; cancel or propose to cancel
any business condition that is no longer appropriate; amend or propose to amend
any business condition that is irrational; issue, or propose the issuance of,
new business conditions to meet the requirements of state management.
5. Ministries, ministerial-level agencies,
People's Councils and People's Committees at all levels are not allowed to
prescribe conditional business lines and business conditions.
Article
8.- Rights of enterprises
1. To enjoy business autonomy; take
initiative in choosing business lines, localities, and forms of business and
investment; take initiative in expanding business in terms of size and business
line; to be encouraged, given incentives, and facilitated by the State to
produce or provide public products or services.
2. To choose forms and methods of mobilizing,
distributing and utilizing capital.
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4. To conduct
import and export business.
5. To recruit, hire
and use laborers to meet business requirements.
6. To apply, on their own initiative, modern
science and technology in order to raise business efficiency and
competitiveness.
7. To enjoy autonomy in deciding on business
affairs and internal relations.
8. To possess,
use and dispose of their assets.
9. To deny any requests for supply of
resources that are not provided for by law.
10. To lodge complaints and denunciations in
accordance with the law on complains and denunciations.
11. To
participate in legal proceedings directly or via authorized representatives.
12.
Other rights as provided by law.
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1.
To conduct business activities within business lines recorded in the business
registration certificates; ensure business conditions as required by law when
conducting conditional business lines.
2.
To organize accounting work, make and submit truthful and accurate financial
statements on time in accordance with the law on accounting.
3. To register tax identification numbers,
declare and pay tax and perform other financial obligations according to law.
4. To ensure
rights and interests of laborers in accordance with the law on labor; ensure
that social insurance, health insurance and other insurance are given to
laborers in accordance with the law on insurance.
5.
To assure and be liable for the quality of goods and services to meet standards
as registered or published.
6. To implement the statistical regime in
accordance with the law on statistics; report periodically on information
relating to enterprises and their financial status to competent state agencies
according to set forms; correct and supplement any declared or reported
information that are found incorrect and insufficient afterward.
7. To abide by the laws on national defense,
security, public order and safety, protection of natural resources,
environment, historical and cultural places, and famous landscapes.
8. Other
obligations as provided for by law.
Article 10.- Rights and
obligations of enterprises that produce or provide public goods or services.
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2. To account and cover expenses according to
bid prices or collect service charges according to regulations of competent
state agencies.
3. To be given adequate time for producing or
providing goods or services so as to recover invested capital and earn
reasonable profits.
4. To produce or provide goods or services
with adequate quantity and proper quality within committed time limits at
prices or charges set forth by competent state agencies.
5. To ensure
equal and favorable conditions for every customer.
6. To be
responsible to law and customers for the quantity, quality, provision
conditions, prices or charges of provided goods or services.
7. Other rights
and obligations as provided for by law.
Article 11.- Prohibited acts
1. Granting business
registration certificates to persons who are not eligible or refusing to grant
such certificates to those who are eligible under this Law;- causing delay,
trouble, obstacle and harassment to business registration applicants and to
business activities of enterprises.
2. Doing
business in the form of unregistered enterprises or continuing to do business
after having the business registration certificate withdrawn.
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4. Faking the amount of registered capital;
failing to contribute an adequate capital amount within the time limit as
committed; fix the value of assets contributed as capital not true to their
actual value.
5. Conducting illegal activities, committing
frauds; conducting business lines banned by law.
6. Conducting conditional business lines when
not yet meeting all business conditions required by law.
7. Preventing owners, members and
shareholders of enterprises from exercising their
rights as provided by this Law and the company's charter.
8. Other acts prohibited by law.
Article 12.- Regime of preservation of documents of enterprises
1. Depending on their types, enterprises must
preserve the following documents:
a/ Company's
charter and its amendments or supplements; internal management rules; members
or shareholders registration book;
b/ Business registration certificate; titles
of protection of industrial property rights; product quality registration
certificates; licenses or permits and other certificates;
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d/ Minutes of meetings of the Members'
Council, Shareholders' Meeting, Management Board; decisions of the enterprise;
e/ Prospectus
for issuance of securities;
f/ Reports of
the Control Board, conclusions of inspection bodies and independent auditing
organizations;
g/Accounting books and documents and annual
financial statements;
h/ Other
documents as provided for by law.
2. Enterprises must preserve all documents
specified in Clause 1 of this Article at their head offices; the duration of
preservation shall comply with the provisions of law.
Chapter II
ESTABLISHMENT
OF ENTERPRISES AND BUSINESS REGISTRATION
Article 13.- The right to establishment, capital
contribution, share buying and management of enterprises
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2. The following organizations and
individuals shall not be entitled to establish and manage enterprises in Vietnam:
a/ State
agencies and units of the people's armed forces in case they use state assets
to set up enterprises for making their own profits;
b/ Cadres,
public servants as provided for in the law on cadres and public servants;
c/ Officers,
non-commissioned officers, professional army members, defense workers at
agencies or units of the Vietnam People's Army; officers, professional
non-commissioned officers working in agencies or units of the Vietnam People's
Police;
d/ Leading
officials, managers in enterprises with 100% state-owned capital, excluding
those who are appointed as authorized representatives to manage state-owned
capital contributions in other enterprises:
e/ Minors;
persons whose civil act capacity is restricted or lost;
f/ Persons
who are serving an imprisonment penalty or prohibited from doing business by
the Court;
g/ Other
cases as provided for by the law on bankruptcy.
3.
Organizations and individuals shall be entitled to buy shares from joint-stock
companies, make capital contribution to limited liability companies or
partnerships in accordance with this Law, except those stated in Clause 4 of
this Article.
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a/ State
agencies and units of the people's armed forces in case they use state assets
to set up enterprises for making their own profits:
b/ Persons
who shall not be entitled to contribute capital to enterprises as provided for
in the law on cadres and public servants.
Article 14.- Contracts signed prior
to business registration
1. Founding
members and shareholders or their authorized representatives may enter into
contracts in service of enterprise establishment before making business
registration.
2. All
rights and obligations resulting from contracts stated in Clause 1 of this
Article shall be taken over by the enterprises that are established afterward.
3. If the
enterprises fail to be established, the contract-signing persons stated in
Clause 1 of this Article shall be solely or jointly liable for the performance
of such contracts.
Article 15.- Order of business
registration
1. Persons
decided to establish an enterprise must submit a complete business registration
dossier as provided for by this Law to a competent business registration office
and shall be responsible for the truthfulness and accuracy of information
contained in the dossier.
2. The
business registration office shall examine the business registration dossier
and issue a business registration certificate within ten working days as from
the date of receipt of the dossier; if refusing to issue a business
registration certificate, it shall notify the applicant thereof in writing. The
notification must clearly state the reason for refusal and requirements for
amendment or supplement.
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4. The time
limit for issuing business registration certificates associated with specific
investment projects shall comply with the law on investment.
Article 16.- Business registration dossiers
of private enterprises
1. Business
registration application, made according to a form set by competent business
registration offices.
2. Copy of
the people's identity card, passport or other lawful personal certification.
3. Written
certification of legal capital issued by a competent agency or organization,
for enterprises conducting business lines which are required by law to have
legal capital.
4. Practice
certificates of the director and other individuals, for enterprises conducting
business lines which are required by law to have practice certificates as
provided for by law.
Article 17.- Business registration dossiers
of partnerships
1. Business
registration application, made according to a form set by competent business
registration offices.
2. Draft of
the partnership charter.
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4. Written
certification of legal capital issued by a competent agency or organization,
for partnerships conducting business lines which are required by law to have
legal capital.
5. Practice
certificates of general partners and other individuals, for partnerships conducting
business lines which are required by law to have practice certificates.
Article 18.- Business registration dossiers
of limited liability companies
1. Business
registration application, made according to a form set by competent business registration
offices.
2. Draft of
the company's charter.
3. List of
members, which is attached with the following papers:
a/ Copy of
the people's identity card, passport or other lawful personal certification,
for individual members;
b/ Copy of
the establishment decision, business registration certificate or other
equivalent document, for member organizations: copies of the authorization
document, the people's identity card, passport or other lawful personal
certification, for authorized representatives.
Copies of
the business registration certificates of the foreign member organizations must
be authenticated within three months before the date of submission of the
business registration dossier by agencies where such organizations are
registered.
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5. Practice
certificates of directors or general directors and other individuals, for
companies conducting business lines which are required by law to have practice
certificates.
Article 19.- Business registration dossiers
of joint-stock companies
1. Business
registration application, made according to a form set by competent business
registration offices.
2. Draft of
the company's charter.
3. List of
founding shareholders, which is attached with the following documents:
a/ Copy of
the people's identity card, passport or other lawful personal certification,
for shareholders being individuals;
b/ Copy of
the establishment decision, business registration certificate or other
equivalent document, for shareholders being organizations; copies of the
authorization document, the people's identity card, passport or other lawful
personal certification, for authorized representatives.
Copy of the
business registration certificate of the shareholder being a foreign
organization must be authenticated within three months before the date of
submission of the business registration dossier by the agency where such
organization is registered.
4. Written
certification of legal capital issued by a competent agency or organization,
for companies conducting business activities which are required by law to have
legal capital.
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Article 20.- Dossiers, procedural order,
conditions for, and contents of, registration
of business or investment for foreign
investors who invest in Vietnam for the
first time
Dossiers,
order, procedures, conditions for, and contents of, registration of business or
investment for foreign investors who invest in Vietnam for the first time shall
comply with this Law and the law on investment. Investment certificate shall be
also business registration certificate.
Article 21.- Contents of business
registration applications
1.
Enterprise name.
2. Address
of the enterprise's head office; telephone number, fax, email address (if any).
3. Business
lines.
4. Charter
capital, for companies, or start-up investment capita! of the enterprise owner,
for private enterprises.
5. Capital
share owned by every member, for limited liability companies or partnerships;
number of shares owned by every founding shareholder, types and par value of
shares, total number of shares of each type eligible for sale offer, for
joint-stock companies.
6. Full
name, signature, permanent address, nationality, number of the people's
identity card, passport or other lawful personal certification of the owner,
for private enterprises; of owner or his/her authorized representative, for
one-member limited liability companies; of every member or every member's
authorized representative, for limited liability companies with two or more
members; of every founding shareholder or every shareholder's authorized
representative, for joint-stock companies; of every general partner, for
partnerships.
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1. Company name,
address of the company head office, branch(es) and/or representative office(s).
2. Business
lines.
3. Charter
capital; methods of raising and reducing charter capital.
4. Full
name, address, nationality and other basic characteristics of every general
partner, for partnerships; of the owner and every member, for limited liability
companies; of every founding shareholder, for joint-stock companies.
5. Capital
share and the value of contributed capital by each member, for limited
liability companies or partnerships: number of shares held by the founding
shareholders, types of shares, par value of shares and total number of shares
of each type for sale offer, for joint-stock companies.
6. Rights
and obligations of members in limited liability companies or partnerships; of
shareholders in joint-stock companies.
7.
Management organizational structure.
8. The
representative-at-law, for limited liability companies or joint-stock
companies.
9.
Formalities for approval of decisions of the company; principles for settlement
of internal disputes.
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11.
Circumstances where a member or shareholder may request the company to buy back
his/her contributed capital, for limited liability companies, or shares, for
joint-stock companies.
12.
Principles for distribution of after-tax profit and handling of losses.
13. Cases of
dissolution and procedures for dissolution and liquidation of assets of the
company.
14.
Formalities for amending and supplementing the company's charter.
15. Full
name and signature of every general partner, for partnerships; of the
representative-at-law, owner, every member or every member's authorized
representative, for limited liability companies; of the representative-at-law,
every founding shareholder or every founding shareholder's authorized
representative, for joint-stock companies.
16. Other
agreements made by members or shareholders according to law.
Article 23.- List of members of
a limited liability company or partnership;
list of founding shareholders of a joint-stock
company
The list of
members of a limited liability company or partnership, and the list of founding
shareholders of a joint-stock company shall be made according to a form set by
the business registration office and must contain the following principal
details:
1. Full
name, address, nationality, permanent address and other basic identifications
of every member, for a limited liability company or partnership: of every
founding shareholder, for a joint-stock company.
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3. Full name
and signature of the representative-at-law of every member or founding
shareholder or their authorized representative, for limited liability companies
or joint-stock companies; of every partner, for partnerships.
Article 24.- Conditions for the
grant of business registration certificates
Enterprises
shall be granted business registration certificates if they fully meet
following conditions:
1.
Registered business lines are not prohibited;
2. The
enterprise name complies with Articles 31,32,33 and 34 of this Law;
3. There is
a head office that complies with Clause 1, Article 35 of this Law;
4. Business
registration dossier is valid as provided for by law;
5. Business
registration fee is fully paid as provided for by law.
Business
registration fees shall be determined on the basis of the number of registered business
lines; specific fee rates shall be stipulated by the Government.
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1.
Enterprise name, addresses of the head office, branch(es) and/or representative
office(s).
2. Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the representative-at-law of
the enterprise.
3. Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the member or founding
shareholder being an individual; number of the establishment decision or
registration business certificate of the owner, member or founding shareholder
being an organization, for limited liability or joint-stock companies; name,
permanent address, nationality, number of the people's identity card, passport
or other lawful personal certification of every general partner, for
partnerships; name, permanent address, nationality, number of the identity card,
passport or other lawful personal certification of the owner being an
individual, for limited liability companies or private enterprises.
4. Charter
capital, for limited liability companies or partnerships: number of shares,
value of contributed equities and number of shares allowed to be sold, for
joint-stock companies; start-up investment capital, for private enterprises;
legal capital, for enterprises conducting business lines required to have legal
capital;
5.
Registered business lines.
Article 26.- Changes in business
registration dossiers
1.
Enterprises must register changes related to enterprise name, address of the
head office, branch or representative office, business objectives and lines,
charter capital, number of shares allowed for sale offer, invested capital,
representative-at-law of the enterprises and other contents of the business
registration dossiers with the business registration office within ten working
days as from the date of decision on such changes.
2. For
changes in the contents of the business registration certificate, enterprises
shall be re-granted the business registration certificates.
3. If the
business registration certificate is lost, torn, burnt or otherwise destroyed,
it shall be re-issued at a fee.
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1. Within
seven working days as from the date of grant of a business registration
certificate or registration of changes in a business registration dossier, the business
registration office shall have to send a notice on the contents of such
business registration certificate to the tax office, statistics office and
other competent state agencies at the same level, the People's Committee of the
district, town or provincial city and the People's Committee of the commune,
ward or township where the enterprise's head office is located.
2.
Organizations and individuals shall have the right to request the business
registration offices to supply information on the contents of business
registration, issue copies of business registration certificates, certificates
of changes in business registration or extracts of contents of business
registration and have to pay fees therefor in accordance with the provisions of
law.
3. The
business registration offices shall have to provide fully and promptly business
registration information at the request of organizations and individuals as
provided for in Clause 2of this Article.
Article 28.- Publication of business
registration contents
1. Within
thirty days as from the date of receiving the business registration
certificate, enterprises must publish in the business website of the business
registration office or in three consecutive issues of a newspaper or electronic
newspaper the following information:
a/
Enterprise name;
b/ Addresses
of the enterprise's head office, branches and/or representative offices;
c/ Business
lines;
d/ Charter
capital, for limited liability companies or partnerships; number of shares,
value of contributed equities and number of shares allowed for sale offer, for
joint-stock companies; start-up investment capital, for private enterprises:
legal capital, for enterprises conducting business lines required to have legal
capital;
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f/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the representative-at-law of
the enterprise;
g/ Place of
business registration.
2. Any
change in the business registration dossier must be also published by
enterprises within the time limit and by the method stated in Clause 1 of this
Article.
Article 29.- Transfer of property
ownership
1. Members
of limited liability companies or partnerships, and shareholders of joint-stock
companies must transfer ownership of assets used to make capital contribution
to the companies according to the following provisions:
a/ For
assets of which ownership has been registered or for land-use rights, capital contributors
shall have to carry out procedures for transferring ownership of such assets or
land-use rights to the companies at a competent state agency.
Transfer of
ownership of assets used to make capital contribution shall not be subject to
registration fee;
b/ For
assets of which ownership is not required to register, they shall be
contributed in the form of asset delivery and receipt certified by a written
minute.
The delivery
and receipt minutes must clearly state: name and address of the company's head
office; full name, permanent address, nationality, number of the people's
identity card, passport or other lawful personal certification, number of the
establishment decision or business registration certificate of the capital
contributor; types of assets, quantity of assets of each type, total value of
assets and its proportion in the company's charter capital; date of asset
delivery and receipt and signature of the capital contributor or his/her
authorized representative and the representative-at-law of the company;
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2. Private
enterprise owners shall not be required to carry out procedures for
transferring ownership of their own assets used in business operation to their
enterprises.
Article 30.- Valuation of assets
used to make capital contribution
1. Assets used
to make capital contribution other than Vietnamese currency, freely convertible
foreign currency or gold must be valuated by members, founding shareholders or
professional valuation organization.
2. Valuation
of assets used to make capital contribution for setting up an enterprise must
be agreed by all members or founding shareholders on the principle of
consensus. If such assets are valued higher than their actual value at the time
of capital contribution, members or founding shareholders shall be jointly
liable for the company's debts or other financial obligations with the
difference between the determined value and the actual value of assets at the
time of termination of valuation.
3. Valuation
of assets used to make capital contribution during the enterprise operation
shall be agreed by such enterprise and capital contributor or effected by a
professional valuation organization. If such assets are valued by a
professional valuation organization, their value must be agreed by the
enterprise and capital contributor. If such assets are valued higher than their
actual value at the time of capital contribution, the capital contributor or
the valuation organization and the representative-at-law of the enterprise
shall be jointly liable for the company's debts or other financial obligations
with the difference between the determined value and the actual value of assets
at the time of termination of valuation.
Article 31.- Enterprise name
1. The name
of an enterprise must be written in Vietnamese, may comprise numeric and
symbols, and must be pronounceable and have at least two components as follows:
a/ Type of
business;
b/ Specific
name.
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3. In
accordance with Articles 32, 33 and 34 of this Law, the business registration
offices shall be entitled to reject or accept a proposed enterprise name.
Decisions made by the business registration offices shall be final.
Article 32.- Prohibitions in choosing
an enterprise name
1. Using a
name that is identical or causes confusion with an existing enterprise name
already registered.
2. Using
names of state agencies, units of people's armed forces, political
organizations, socio-political organizations, politico-socio- professional
organizations, social organizations or socio-professional organizations to
constitute fully or partially the enterprise name, unless otherwise agreed by
such agencies, units or organizations.
3. Using
words and symbols running counter to historical and cultural traditions,
ethics, and fine customs and practices of the nation.
Article 33.- Enterprise names in
foreign languages and abbreviated forms
1. The
enterprise name in a foreign language is that translated from Vietnamese into a
foreign language. Translation may be done without or with translating the
specific name of the enterprise name into a foreign language.
2. The enterprise name in a
foreign language must be presented in a size font smaller than that in
Vietnamese when it is shown at the enterprise's establishments, on its
transactional papers, dossiers or publications.
3. The
abbreviated name of the enterprise shall be the name shortened from the
name in Vietnamese or a foreign language.
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1. An identical name means an enterprise name requested to be registered which is read and
written in Vietnamese in the same ways
as the name of an existing registered enterprise.
2. In the
following cases an enterprise name requested
to be registered shall be regarded as to cause confusion with the name
of an existing registered enterprise:
a/ It is
read, in Vietnamese, in the same way as the name of an existing registered enterprise;
b/
It is differed, in Vietnamese, from the name of an existing registered enterprise by the sign "&"only;
c/ Its
abbreviation is identical to the abbreviation of the name of an existing
registered enterprise;
d/ It is,
in foreign language, identical to the name of an existing registered
enterprise in foreign language;
e/ It is
differed from the name of an existing registered
enterprise by a number or ordinal or a Vietnamese
letter after such name, except that it is
given to a subsidiary of the existing registered enterprise;
f/ It is
differed from the name of an existing registered
enterprise by the word "tan" or "moi" (new) right before or after such name;
g/ It is
differed from the name of an existing registered enterprise by the word
"mien bac" (northern), "mien
nam" (southern), "mien trung" (central), "mien
tay" (western), "mien dong" (eastern)
or other equivalent words, except that it is given to a subsidiary of the existing registered enterprise.
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1. The head
office is contacting and transactional
place of an enterprise; must be based in the territory of Vietnam, have a
specified address comprising home
number, name of street (street lane)
or commune, ward, township, rural or urban district, provincial city, province or centrally run city; telephone
number, facsimile number and email address (if any).
2. Enterprises
must inform the business registration
office of the opening time of their head offices within fifteen days as
from the date of receiving the business
registration certificates.
Article 36.- The
enterprise seal
1. Every enterprise shall have its own seal. Enterprises must keep and preserve their seals at their head offices. The design and contents of
seals, conditions for making seals
and regulations on seal usage shall comply with regulations of the
Government.
2. Seal is a property of an enterprise. The
representative-at-law of an enterprise must be responsible for managing the use
of its seal in accordance with the
provisions of law. In case of necessity,
an enterprise can have a duplicate of its seal if it obtains approval
from the seal-issuing agency.
Article 37.- Representative offices, branches and business places of enterprises
1. Representative
office is an affiliated unit of an
enterprise and is authorized to act on behalf of the enterprise to
protect its interests. The organization and
operation of representative offices shall
comply with the provisions of law.
2. Branch
is an affiliated unit of an enterprise and is tasked to perform all or some
functions of such enterprise,
including acting as an authorized representative.
Business lines of branches must be consistent with those of their enterprises.
3. Business
place is an area where an enterprise carries out its business activities. A
business place may be located outside the registered location of the head
office.
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5.
Enterprises shall be entitled to open their branches and/or representative
offices in Vietnam or foreign countries. An enterprise can open more than one
representative office and/or branch in the administrative territory of a
locality. The order and procedures for opening branches or representative
offices shall be stipulated by the Government.
Chapter III
LIMITED
LIABILITY COMPANIES
Section I. LIMITED LIABILITY COMPANIES
WITH TWO OR MORE MEMBERS
Article 38.- Limited liability companies
with two or more members
1. A limited
liability company is an enterprise of which:
a/ Members
may be organizations and/or individuals; the total number of members shall not
exceed fifty;
b/ Members
are responsible for debts and other property liabilities of the enterprise
within the amount of capital that they have committed to contribute to the
enterprise;
c/ Capital
shares of the members may only be transferred in accordance with Articles 43,
44 and 45 of this Law.
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3. Limited
liability companies shall not be entitled to issue shares.
Article 39.- Capital contribution and
grant of capital share certificates
1. Members
must contribute capital fully and on time with types of assets as committed.
Any change in the type of assets that members have committed to contribute must
be approved by all other members and informed in writing by the company to the
business registration office within seven working days as from the date of
approval of such a change.
The
representative-at-law of a company must inform in writing the progress of
capital contribution to the business registration office within fifteen days as
from the date of commitment to contribute capital, and is personally liable for
any damage caused to the company or other persons due to his/her late,
inaccurate, untruthful and incomplete report.
2. If a member
fails to contribute capital fully and on time as committed, the amount not yet
contributed shall be considered his/her debt toward the company; such a member
shall be liable for any damage caused by his/her failure to fully contribute
capital on time as committed.
3. If the
capital contribution is not fully made within the time limit as last committed,
the capital amount not yet contributed shall be dealt with in one of the
following ways:
a/ One or
several members agree to contribute such amount;
b/ Other
persons are mobilized to contribute capital to the company;
c/ All other
members contribute such amount in proportion to their capital shares in the
company's charter capital.
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4. At the
time of full contribution of capital amounts, members shall be issued a capital
share certificate by the company. A capital share certificate shall contain the
following principal information:
a/ Company
name and address of company head office;
b/ Number
and date of grant of the business registration certificate;
c/ The
company's charter capital;
d/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the member being an
individual: name, head office, nationality, number of the establishment
decision or business registration certificate of the member being an
organization;
e/ Capital
share and its value:
f/ Number
and the date of grant of the certificate;
g/ Full name
and signature of the representative-at-law of the company.
5. If the
capital share certificate is lost, torn, burnt or otherwise destroyed, it may
be re-issued by the company.
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1. A member
registration book must be made by the company as soon as the business
registration is made. It must contain the following principal contents:
a/ Company
name and address of company head office;
b/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the member being an
individual; name, head office, nationality, number of the establishment
decision or business registration certificate of the member being an
organization;
c/ Value of
contributed capital at the time of capital contribution and capital share of
each member; time of capital contribution; type, quantity and value of every
asset used to make capital contribution;
d/ Signature
of the member being an individual or the representative-at-law of the member
being an organization;
e/ Number
and date of grant of the capital share certificate.
2. Member
registration books shall be kept at head offices of companies.
Article 41.- Rights of members
1. Members
of a limited liability company with two or more members shall have the following
rights:
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b/ To vote
in proportion to their capital share;
c/ To check,
review, search, copy or extract the member registration book, transactions
recording and monitoring books, accounting books, annual financial statements,
minutes of Member's Council meetings, and other papers and documents of the
company;
d/ To be
distributed profits in proportion to their capital share after the company has
fully paid taxes and fulfilled other financial obligations according to law;
e/ To be
distributed the value of remaining assets in proportion to their capital share
when the company is dissolved or goes bankrupt;
f/ To be
given priority in contributing more capital into the company when the company
increases its charter capital; transfer part or the whole of their capital
shares in accordance with this Law;
g/ To lodge complaints
about or initiate lawsuits against the director or general director who fails
to fulfill his/her obligations, causing damage to members or the company
according to the provisions of law;
h/ To
dispose of their capital shares by transfer, bequeath, donation or otherwise
according to the provisions of law and the company's charter;
i/ To have
other rights as provided for by this Law and the company's charter.
2. A member
or group of members holding more than 25% of the charter capital or a smaller ratio
as provided for in the company's charter, except the case stated in Clause 3 of
this Article, shall be entitled to convene a Members' Council meeting to decide
on matters falling under competence;
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Article 42.- Obligations of members
1. To naake
capital contribution fully and on time as committed and be liable for debts and
other property liabilities of the company within the amount of capital
committed to contribute; not to withdraw capital from the company in any form,
except the cases stated in Articles 43, 44, 45 and 60 of this Law.
2. To
observe the company's charter;
3. To abide
by decisions of the Members' Council;
4. To
perform other obligations as provided for by this Law;
5. To be
liable individually when acting on behalf of the company to:
a/ Violate
the laws;
b/ Conduct
business or other transactions not in the interest of the company but causing
damage to other persons;
c/ Pay off
undue debts when there is a financial danger facing the company.
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1. A member
shall be entitled to request the company to buy back his/her capital share if
such a member votes against decisions of the Members' Council regarding the
following matters:
a/ Amendment
and/or supplementation of contents of the company's charter concerning rights
and obligations of members, the Members' Council;
b/
Reorganization of the company;
c/ Other
matters as provided for in the company's charter.
The request
for buy-back of capital share must be made in writing and submitted to the
company within fifteen days as from the date of approval of decisions on
matters specified at Points a, b, and c of this Clause.
2. Upon a
member's request mentioned in Clause 1 of this Article, if an agreement on the
price of the capital share cannot be reached, the company must buy back that
amount at the market price or the price determined on the principles provided
for in the company's charter within fifteen days as from the date of receiving
the request. Payment shall be made only if the company is capable of paying off
all due debts and other financial obligations after fully paying for such a
buy-back.
3. If the
company does not buy back the capital share as provided for in Clause 2 of this
Article, the requesting member shall be entitled to transfer his/her capital
share to other members or anyone else.
Article 44.- Transfer of capital
shares
Except for
the case stated in Clause 6, Article 45 of this Law, a member of the limited liability
company with two or more members shall be entitled to transfer partially or
wholly his/her capital share to a third party according to the following
provisions:
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2. Such a
capital share may be transferred to a non-member person only if all remaining
members of the company refuse to buy or are unable to buy up such a capital
share within thirty days as from the date of offer.
Article 45.- Handling of capital
shares in other circumstances
1. If an
individual-member of a limited liability company is dead or declared to be dead
by the court, his/her testamentary heir or heir-at-law shall become member of
the company.
2. If a
member has his/her civil act capacity restricted or has lost it, his/her rights
and obligations shall be performed through his/her guardian.
3. The
capital share of a member shall be bought back by the company or transferred in
accordance with Articles 43 and 44 of this Law in the following cases:
a/ That
member's heir refuses to become member of the company;
b/ The donee
stated in Clause 5 of this Article is not approved by the Members' Council to
become member of the company;
c/ The
member is an organization that is dissolved or goes bankrupt.
4. If an
individual-member is dead and has no heir or his/her heir refuses or is
deprived of the right to inherit his/her capital share, such capital share
shall be handled in accordance with the civil law.
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The donee
shall become a member of the company if he/she is either a relative of the
donating member within three generations of kinship.
Otherwise,
the donee may become member of the company if so accepted by the Members'
Council.
6. In cases
where a member uses his/her capital share to pay debts, the person who receives
the capital share as payment may use such amount in either of the following two
ways:
a/ Become
member of the company if so accepted by the Member's Council;
b/ Offer and
transfer that capital share in accordance with Article 44 of this Law.
Article 46.- Management organizational
structure of companies
A limited
liability company with two or more members has a Members' Council, chairman of
the Members' Council and director or general director. A company with eleven or
more members must set up a Control Board. A Control Board may be set up in a
company with less than eleven members to meet its management requirements.
Rights, obligations, criteria, conditions and working rules of the Control
Board and its head shall be provided for in the company's charter.
Either the
chairman of the Members' Councilor director or general director shall be
representative-at-law of the company as provided for in the company's charter.
The representative-at-law of a company must permanently reside in Vietnam. If
his/her absence in Vietnam lasts more than thirty days, he/she must authorize
in writing another person in accordance with the company's charter to exercise
his/her rights and obligations.
Article 47.- The Members' Council
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2. The
Member's Council has the following rights and obligations:
a/ To decide
on the development strategy and annual business plans of the company;
b/ To decide
on the increase or decrease of the charter capital, time and methods for
mobilizing capital;
c/ To decide
on methods of investment and investment projects valued at over 50% of total
value of assets recorded in the financial statement most recently published by
the company or at a smaller ratio provided for in the company's charter;
d/ To decide
on methods of market development and marketing, and technology transfer;
approve contracts of borrowing, lending and selling assets valued at 50% or
more of total value of assets recorded in the financial statement most recently
published by the company or at a smaller ratio provided for in the company's
charter;
e/ To elect,
remove or dismiss the chairman of the Members' Council; decide to appoint,
remove, dismiss, sign or terminate contracts with the director or general
director, chief accountant and other managers as provided for in the company's
charter;
f/ To decide
on salaries, bonuses and other benefits of the director or general director,
chief accountant and other managers as provided for in the company's charter;
g/ To adopt
annual financial statements and plans for using or distributing profits as well
as handling losses of the company;
h/ To decide
on the management organization structure of the company;
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j/ To amend
and/or supplement the company's charter;
k/ To decide
on the company's reorganization;
l/ To decide
on dissolution or bankruptcy of the company;
m/ Other
rights and duties as provided for by this Law and the company's charter.
Article 48.- Authorized representatives
1. Appointment
of an authorized representative must be made in writing and notified to the
company and the business registration office within seven working days as from
the date of appointment. The notification must contain the following details:
a/ Name, address
of the head office, nationality, number and date of the establishment decision
or business registration certificate;
b/ Capital
share, number and date of grant of the capital share certificate;
c/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the authorized
representative;
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e/ Full
names, signatures of the representative-at-law and authorized representative of
the authorizing member.
Replacement
of the authorized representative must be notified to the company and the
business registration office within seven working days as from the date of
decision and become valid from the date on which the notification is received
by the company.
2. The
authorized representative must satisfy the following criteria and conditions:
a/ Having
full civil act capacity;
b/ Not being
prohibited from establishing and managing an enterprise;
c/ Having
professional qualifications and experience in business management or in the
major business line of the company;
d/As for
subsidiary companies of a company in which the State-owned capital share or
shares account for more than 50% of the charter capital, wives or husbands,
fathers, adoptive fathers, mothers, adoptive mothers, children, adopted
children, or siblings of the managers and persons who have competence to
appoint managers of that company shall not be appointed to be authorized
representatives in its subsidiary companies.
3. The
authorized representative shall act on behalf of the authorizing member in
exercising all rights and performing all obligations of a member of the
Members' Council as provided for by this Law. Any restriction by the
authorizing member on his/her authorized representative in exercising rights of
a member through the Members' Council shall not be legally valid towards a
third party.
4. The
authorized representative is obliged to attend all meetings of the Members'
Council and exercise rights and perform obligations of a member of the Members'
Council in a honest, careful and optimal manner for the purpose of protecting
to the maximum benefits of the authorizing member and the company.
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Article 49.- Chairman of the Members'
Council
1. The
Members' Council shall elect one of its members to be the chairman. The
chairman may concurrently hold the position of director or general director.
2. The
chairman shall have the following rights and duties:
a/ To
prepare, or organize the preparation of, working programs and plans of the
Members' Council;
b/ To
prepare, or organize the preparation of, the agenda, contents and materials for
meetings of the Members' Council or the members' comments;
c/ To
convene and preside meetings of the Members' Council or organize the gathering
of the members' comments;
d/ To
supervise, or organize the supervisions of, the implementation of decisions
made by the Members' Council;
e/ To sign
on behalf of the Members' Council its decisions;
f/ Other
rights and obligations as provided for by this Law and the company's charter.
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4. That the
chairman is the representative-at-law of the company as provided for in the
company's charter must be clearly stated in all transactional papers.
5. During
his/her absence, the chairman shall authorize a member of the Members' Council
to exercise his/her rights and duties in accordance with principles provided
for in the company's charter. If no member is authorized or the chairman is
incapable of working, remaining members shall elect by principle of majority
vote one of them to temporarily exercise rights and duties of the chairman of
the Members' Council.
Article 50.- Convention of meetings
of the Members' Council
1. A meeting
of the Members' Council may be convened at any time at the request of its
chairman or a member or group of members as provided for in Clause 2 and Clause
3, Article 41 of this Law. Meetings of the Members' Council must be held at the
head office of the company, unless otherwise provided for in the company's
charter.
The chairman
of the Members' Council shall prepare, or organize the preparation of, the
agenda, contents, documents of and convene the meeting. Members may make
written recommendations on the meeting agenda. A recommendation must contain
the following contents:
a/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the member, for individuals;
name, address, nationality, number of the establishment decision or business
registration certificate of the member, for organizations; full name and
signature of the member or authorized representative;
b/ Capital
share, number and date of grant of the capital share certificate;
c/ Contents
recommended for inclusion in the meeting agenda;
d/ Reasons
for recommendations;
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2. The
meeting invitation may be notified in the form of invitation card, telephone,
fax, telex or other electronic means as provided for in the company's charter
and must be sent directly to each member. The meeting invitation must clearly
specify the time, venue and agenda of the meeting.
The agenda
and materials of a meeting must be sent to all members before opening of the
meeting. Materials related to amendment and supplementation of the company's
charter, development orientations of the company, annual financial statements,
reorganization or dissolution of the company must be sent to all members at
least two working days before opening of the meeting. The time limit for
sending other meeting materials shall be provided for in the company's charter.
3. A member
or group of members as provided for in Clause 2 and Clause 3, Article 41 of
this Law shall be entitled to convene a meeting of the Members' Council if the
chairman of the Members' Council does not convene the meeting at the request of
such member or group of members within fifteen days as from the date of
receiving the request; in this case, if it is deemed necessary, the business
registration office may be invited to oversee the organization and proceedings
of the meeting; at the same time, such member himself/herself or group of
members themselves or on behalf of the company may take legal action against
the chairman for his/her failure to duly perform his/her management
obligations, causing losses to their legitimate interests.
4. The
request for convening a meeting of the Members' Council as provided for in
Clause 3 of this Article must be made in writing and contain the following
principal contents:
a/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of the member, for individuals;
name, address, nationality and number of the establishment decision or business
registration certificate of the member, for organizations; capital share,
number and date of grant of the capital share certificate;
b/ Reasons
for convening a meeting of the Members' Council and matters to be settled;
c/ Proposed
agenda;
d/ Full name
and signature of each requesting member or their authorized representatives.
5. If the
request for convening a meeting of the Members' Council does not contain full
contents as provided for in Clause 4 of this Article, that fact must be
notified to the requesting member or group of members by the chairman within
seven working days from the date of receipt of such request.
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If the
chairman of the Members' Council fails to convene a meeting, he/she shall be individually
liable before law for any damage caused to the company and the concerned
members of the company. In this case, the requesting member or group of members
shall be entitled to convene a meeting of the Members' Council. Reasonable
expenses for convening and conducting the meeting shall be reimbursed by the
company.
Article 51.- Conditions and formalities
of a meeting of the Members' Council
1. A meeting
of the Members' Council may be conducted if all participating members own at least
75% of the charter capital; a specific percentage shall be provided for in the
company's charter.
2. If the
first meeting fails to open due to not satisfying the condition stated in
Clause 1 of this Article, the second meeting shall be convened within fifteen
days after the proposed opening date of the first meeting. The second meeting
may be conducted if all participating members own at least 50% of the charter
capital; a specific percentage shall be provided for in the company's charter.
3. If the second
meeting fails to open due to not satisfying the condition stated in Clause 2 of
this Article, the third meeting shall be convened within ten working days after
the proposed opening date of the second meeting. The third meeting may be
conducted regardless of the number of participating members and the percentage
of the charter capital they represent.
4. Members
or their authorized representatives must participate in and vote at meetings of
the Members' Council. Formalities of conducting meetings of the Members'
Council and forms of voting shall be provided for in the company's charter.
Article 52.- Decisions of the
Members' Council
1. The
Members' Council shall approve decisions falling under its competence by voting
at a meeting, consulting opinions in writing or other method as provided for in
the company's charter.
Unless
otherwise provided for in the company's charter, decisions on the following
matters must be approved by voting at a meeting:
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b/ Decisions
on development orientations of the company;
c/ Election,
removal from office or dismissal of the chairman of the Members' Council;
appointment, removal from office or demotion of director or general director;
d/Adoption
of annual financial statements;
e/
Re-organization or dissolution of the company.
2. Decisions
of the Members' Council shall be approved at a meeting by:
a/ A number
of participating members owning at least 65% of the charter capital; a specific
percentage shall be provided for in the company's charter;
b/ A number
of participating members owning at least 75% of the charter capital if such
decisions are related to the sale of assets valued at 50% or more of the total
value of assets recorded in the latest financial statements of the company or a
smaller percentage as provided for in the company's charter; to the amendment
or supplementation of the company's charter, reorganization or dissolution of
the company; a specific percentage shall be provided for in the company's
charter.
3. Decisions
of the Members' Council shall be approved in the form of consulting opinions in
writing by a number of members owning at least 75% or the charter capital; a
specific percentage shall be provided for in the company's charter.
Article 53.- Minutes of meetings
of the Members' Council
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2. The
minutes of a meeting must be completed and passed before the closing of the
meeting. A minutes must contain the following contents:
a/ Time,
venue, purpose and agenda of the meeting;
b/ Full
name, capital share, number and date of issue of the capital share certificate
of every participating member or his/her authorized representative: full name,
capital share, number and date of issue of the capital share certificate of
every absent member or his/her authorized representative;
c/ Matters
discussed and voted; summary of opinions of members on each matter;
d/ Total
numbers of votes "for", "against" and "blank" for
each voting matter;
e/ Decisions
approved;
f/ Full
names and signatures of participating members or their authorized
representatives.
Article 54.- Procedures for approval
of decisions of the Members' Council in
the form of consulting opinions in writing
Unless
otherwise provided for in the company's charter, the competence and formalities
for approving decisions in the form of consulting opinions in writing shall be
as follows:
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2. The
chairman shall be responsible for preparing and sending reports, explanations,
drafts of proposed decisions and opinion sheets to all members of the Members'
Council.
An opinion
sheet must contain the following contents:
a/ Name,
head office, number and date of issue of the business registration certificate
and the place of business registration of the company;
b/ Full
name, address, nationality, number of the people's identity card, passport or
other lawful personal certification, capital share of the member of the
Members' Council;
c/ Matters
put up for opinions and proposed opinions "for", "against"
and "blank";
d/ Deadline
for sending the opinion sheet back to the company;
e/ Full name
and signature of the chairman and the member of the Members' Council.
Opinion
sheets that are fully and accurately filled up and sent by members to the company
within the time limit shall be considered valid.
3. The
chairman of the Members' Council shall organize the counting of opinion sheets,
making a report and sending the count results as well as approved decisions to
all members within seven working days after the deadline for sending back their
opinions to the company. A report on the count results must contain principal
contents as provided for in Clause 2, Article 53 of this Law.
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1. The
director or general director of the company shall run day-to-day business
operations of the company and be responsible to the Members' Council for
performing his/her rights and duties.
2. The
director or general director shall have the following rights and duties:
a/ To implement
decisions of the Members' Council;
b/ To decide
on matters related to day-to-day business operations of the company;
c/ To
implement the business plan and investment plan of the company;
d/ To issue
internal management regulations of the company;
e/ To
appoint, remove from office and dismiss managers except ones falling under the
competence
of the Members' Council;
f/ To
conclude contracts on behalf of the company, except ones falling under the
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g/ To
propose the structure of organization of the company;
h/ To submit
annual financial statements to the Members' Council;
i/ To
propose plans for distributing profits or handling losses in business;
j/ To
recruit laborers;
k/ Other
rights and duties as provided for in the company's charter and labor contract
signed between him/her and the company according to the decision of the
Members' Council.
Article 56.- Obligations of members
of the Members' Council, director or general
director
1. The members
of the Members' Council and director or general director shall have the
following obligations:
a/ To
perform assigned rights and duties in a honest, careful and optimal manner in
order to ensure maximum lawful benefits of the company and its owner;
b/ To be
loyal to the benefits of the company and its owner; not to be permitted to use
information, know-how and business opportunities of the company; not to be
permitted to abuse their status, position and property of the company for
self-seeking purposes or the interests of other organizations or individuals;
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d/ To
perform other obligations as provided for by law and the company's charter.
2. The
director or general director must not raise salary or pay bonus if the company
is incapable of paying off due debts.
Article 57.- Qualifications and conditions
of director or general director
1. The
director or general director must have the following qualifications and
conditions:
a/ Having full
civil act capacity and not being prohibited from managing an enterprise as
provided for by this Law;
b/ Owning at
least 10% of the charter capital or being a non-member person with expertise
and experience in business management or major business lines of the company or
other qualifications and conditions as provided for in the company's charter;
2. Wife,
husband, father, adoptive father, mother, adoptive mother, child, adopted
child, or sibling of the managers or persons who have competence to appoint
managers of a company in which the State-contributed capital amount or
State-owned share accounts for more than 50% of the charter capital can not be
director or general director of a subsidiary company of such company.
Article 58.- Remuneration, salary and
bonus of members of the Members' Council
and director or general director
1. The
company shall be entitled to pay remuneration, salary and bonus of members of
the Members' Council and director or general director based on business results
and efficiency of the company.
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Article 59.- Contracts, transactions
subject to approval of the Members' Council
1. The
following contracts and transactions must be approved by the Members' Council
if they are concluded between the company and:
a/ Its
members or their authorized representatives, director or general director and
representative-at-law
of the company;
b/ Related
persons of the people stated at Point a of this Clause;
c/ Managers
or persons who have competence to appoint managers of its parent company;
d/ Related
persons of people stated at Point c of this Clause.
The
representative-at-law of the company must send draft contracts or notices on
major contents of expected transactions to all members of the Members' Council
and, at the same time, post them up at the head office and branches of the
company. Unless otherwise provided for in the charter, the Members' Council
must approve the draft contracts or transactions within fifteen days as from
the date of posting; in this case, contracts or transactions shall be approved
by a number of members owning at least 75% of the total voting capital. Members
related to contracts or transactions shall not be entitled to vote.
2. Contracts
or transactions that are concluded in violation of Clause 1 of this Article
shall be invalid and handled in accordance with the provisions of law. The
representative-at-law, related members and related persons of such members must
pay compensation for any arising damage or return to the company any benefits
gained from performance of such contracts or transactions.
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1. Under
decisions of the Members' Council, the company may increase or decrease its
charter capital in the following forms:
a/
Increasing capital contributed by the members;
b/
Increasing the charter capital corresponding to the increased value of assets
of the company;
c/ Receiving
capital contributed by new members.
2. If the
capital is increased in the form of increasing capital contributed by the
members, the increase in the capital shall be contributed in proportion to
their capital share in the charter capital of the company. Members who are
against the decision on capital increase may not further contribute capital. In
this case, the increase in capital shall be contributed bv other members in
proportion to their capital share in the charter capital of the company, unless
otherwise agreed by the members.
The capital
may be increased in the form of adding new members only if it is agreed by all
members, unless otherwise provided for in the company's charter.
3. Under
decisions of the Members' Council, the company may decrease its charter capital
in the following forms:
a/ Returning
its members part of their contributed capital in proportion to their capital
share if the company has been carrying out business activities for more than
consecutive two years since the date of business registration and is still
capable of fully paying due debts and other property liabilities afterward;
b/ Buying
back the capital share in accordance with the provisions of Article 44 of this
Law;
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4. The
company must inform in writing the business registration office its decision on
capital increase or decrease within seven working days as from the date of
making such decision. The notification must contain the following major
contents:
a/ Name, address
of the head office, number and date of issue of the business registration
certificate, place of business registration;
b/ Full
name, permanent address, nationality, number of the people's identity card,
passport or other lawful personal certification of every member being an
individual; name, permanent address, nationality, number of the establishment
decision or registration business certificate of every member being an
organization; capital share of each member;
c/ The
charter capital; amount of capital proposed to increase or decrease;
d/ Time and
method of capital increase or decrease;
e/ Full name
and signature of the chairman of the Members' Council and representative-at-law
of the company.
In case of
charter capital increase, the notification must be attached with a decision
thereon of the Members' Council. In case of charter capital decrease, it must
be attached with a decision thereon of the Members' Council together with the
latest financial statement, which must be certified by an independent auditor
for companies with more than 50% of foreign capital share.
The business
registration office must register the increase or decrease in the charter
capital within ten working days as from the date of receiving a notification.
Article 61.- Conditions for profit
distribution
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Article 62.- Recovery of contributed
capital amount returned or profit distributed
If the
return of part of contributed capital amount to decrease the company's charter capital
is effected contrary to the provisions of Clause 3 and Clause 4, Article 60 of
this Law or the profit distribution is made inconsistent with the provisions of
Article 61 of this Law, all members must return to the company money amounts or
properties they have received or must be jointly liable for all debts and other
property liabilities of the company until they have fully returned money
amounts or properties they have received which are equivalent to the decreased
capital amount or distributed profit.
Section II. ONE-MEMBER LIMITED LIABILITY
COMPANIES
Article 63.- One-member limited liability
companies
1. A
one-member limited liability company is an enterprise which is owned by one
organization or individual (hereinafter referred to as the company owner); the
company owner is liable for debts and other property liabilities of the company
within the charter capital of the company.
2.
Acne-member limited liability company shall have the legal person status as
from the date of being granted the business registration certificate.
3. A
one-member limited liability company shall not be entitled to issue shares.
Article 64.- Rights of the company
owner
1. The
company owner that is an organization shall have following rights:
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b/ To decide
on the development strategy and annual business plan of the company;
c/ To decide
on the structure of organization and management; appoint, remove from office
and dismiss managers of the company;
d/ To
approve investment projects valued at 50% or more of total value of assets
recorded in the latest financial statement of the company or a smaller
percentage as provided for in the company's charter;
e/ To decide
on methods of market development, marketing and technology;
f/ To
approve lending, borrowing and other contracts as provided for in the company's
charter which are valued at 50% or more of total value of assets recorded in
the latest financial statement of the company or at a smaller percentage as
provided for in the company's charter;
g/ To decide
on sale of assets valued at 50% or more of total value of assets recorded in
the latest financial statement of the company or at a smaller percentage as
provided for in the company's charter;
h/ To decide
on increase of the charter capital; transfer of part or whole of the charter
capital of the company to another organization or individual;
i/ To decide
on setting up subsidiaries and making capital contribution to other companies;
j/ To
conduct supervision and evaluation of business performance of the company;
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l/ To decide
on re-organization, dissolution and request for bankruptcy of the company;
m/ To
collect the whole value of assets of the company after it finishes the
dissolution or bankruptcy process;
n/ Other
rights as provided for by this Law and the company's charter.
2. The
company owner that is an individual shall have following rights:
a/ To decide
on contents of the company's charter and its amendment or supplement;
b/ To decide
on investment and business activities and internal management of the company,
unless otherwise provided for in the company's charter;
c/ To
transfer part or whole of the charter capital of the company to another
organization or individual;
d/ To decide
on use of profits after fulfilling tax and other financial obligations of the
company;
e/ To decide
on re-organization, dissolution and request for bankruptcy of the company;
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g/ Other
rights as provided for by this Law and the company's charter.
Article 65.- Obligations of the
company owner
1. To make
capital contribution fully and on time as committed; if not, to be liable for
all debts and other property liabilities of the company;
2. To
observe the company's charter;
3. To keep
assets of the company and company owner separated;
The company
owner who is an individual must separate between expenditure of himself or
herself and that of the company owner or director or general director.
4. To
observe laws on contracts and relevant laws on sale, purchase, borrowing,
lending, lease, renting or other transactions between the company and the
company owner.
5. To
perform other obligations as provided for by this Law and the company's
charter.
Article 66.- Restrictions on the
rights of the company owner
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If the
company owner transfers part of the charter capital to another organization or
individual, the company must be transformed into a limited liability company
with two or more members and such transformation must be registered within
fifteen days as from the date of transfer.
2. The
company owner must not withdraw profits if the company fails to fully pay off
due debts and other property liabilities.
Article 67.- Management organizational
structure of a one member limited liability
company whose owner is an organization
1. The
company owner shall appoint one or more than one authorized representative,
with a term of not more than five years, to exercise the owner's rights and
obligations as provided for by this Law and other relevant laws. The authorized
representatives must meet all qualifications and conditions as provided for in
Clause 2, Article 48 of this Law.
2. The
company owner shall be entitled to change authorized representatives at any
time.
3. If two or
more authorized representatives are appointed, the company's organizational
structure of management shall comprise Members' Council, director or general
director and controller. In this case, all authorized representatives
constitute the Members' Council.
4. If only
one authorized representative is appointed, he/she shall be the company
president. In this case, the company's organizational structure of management
shall comprise company president, director or general director and controller.
5. The company's
charter must specify either chairman of the Members' Council, company
president, director or general director to be representative-at-law of the
company. The representative-at-law must reside in Vietnam and authorize another
person to act as representative-at-law of the company on principles as provided
for in the company's charter if his/her absence in Vietnam lasts more than
thirty days.
6.
Functions, rights and duties of the Members' Council, company president,
director or general director and controllers are defined in Articles 68, 69, 70
and 71 of this Law.
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1. The
Members' Council shall act on behalf of the company owner in organizing the
exercise of his/her rights and the performance of his/her obligations; act on
behalf of the company in exercising its rights and performing its obligations;
be responsible to law and the company owner in exercising assigned rights and
duties in accordance with this Law and other relevant laws.
2. Rights,
obligations, tasks and working regime of the Members' Council shall comply with
the company's charter and relevant laws.
3. Chairman
of the Members' Council shall be appointed by the company owner. The term,
rights and obligations of the chairman of the Members' Council shall comply
with the provisions of Article 49 and other relevant provisions of this Law.
4.
Competence and procedures for convening a meeting of the Members' Council shall
comply with the provisions of Article 50 of this Law.
5. A meeting
of the Members' Council may be conducted if it is attended by at least
two-thirds of all members. Unless otherwise provided for in the company's
charter, each member shall have one vote of equal validity. Decisions of the
Members' Council may be made in form of consulting opinions in writing.
6. Decisions
of the Members' Council shall be approved by a majority of participating
members. Decisions on amendment or supplement to the company's charter,
re-organization of the company or transfer of part or whole of the company's charter
capital must be approved by at least three-fourths of participating members.
Decisions of
the Members' Council shall become legally effective from the date of approval,
unless it is otherwise provided for in the company's charter that it must be
approved by the company owner before becoming effective.
7. Meetings
of the Members' Council must be recorded in the minutes book. A minute of a
meeting of the Members' Council must contain contents as provided for in
Article 53 of this Law.
Article 69.- President of the
company
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2. Specific
rights, obligations and duties and working regime of the president of the
company toward the company owner shall comply with the company's charter and
relevant laws.
3. Decisions
of the president of the company on exercise of rights and performance of
obligations of the company owner shall be legally effective from the date of
approval by the company owner, unless otherwise provided for in the company's
charter.
Article 70.- Director or general
director
1. The
director or general director shall be appointed or hired by the Members'
Council or president of the company with a term of not more than five years.
He/ she shall run day-to-day business operation of the company and be
responsible to the Members' Council or president of the company in exercising
his/her rights and duties.
2. The
director or general director shall have following powers:
a/ To
organize implementation of decisions of the Members' Council or president of
the company;
b/ To decide
on matters related to day-to-day business operation of the company;
c/ To
organize implementation of business and investment plans of the company;
d/ To issue
internal management regulations of the company;
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f/ To
conclude contracts on behalf of the company, except those falling under the
competence of the Members' Council or president of the company;
g/ To make
proposals on the organizational structure of the company;
h/ To submit
annual financial settlement reports to the Members' Council or president of the
company;
i/ To make
proposal on distribution of profits or settlement of losses;
j/ To
recruit laborers;
k/ Other
rights as provided for in the company's charter and contract signed with the
chairman of the Members' Council or president of the company.
3. The director
or general director must meet the following qualifications and conditions:
a/ Having
full civil act capacity; not being prohibited from managing an enterprise in
accordance with this Law;
b/ Not being
related person of the members of the Members' Council or president of the
company; any person who has power to appoint the authorized representative or
president of the company;
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Article 71.- Controllers
1. The
company owner shall appoint from one to three controllers working for a term of
not more than three years. Controllers shall be responsible to the company
owner for exercising their rights and duties.
2.
Controllers shall have the following duties:
a/ To check
the lawfulness, honesty and diligence of the Members' Council, president of the
company and director or general director in performing owner's rights and
running business operations of the company;
b/ To
appraise financial statements, business performance, management and other
reports before they are submitted to the company owner or relevant state
agencies; submit reports on examination thereof to the company owner;
c/ To make
proposals to the company owner for change and addition of the organizational
structure of business management and performance of the company;
d/ Other
duties as provided for in the company's charter or as requested or decided by
the company owner.
3.
Controllers shall be entitled to review any dossiers and documents of the
company at the head office, branches or representative offices of the company.
Members of the Members' Council, president of the company, director or general
director and other managers shall be obliged to fully and promptly provide
information relating to the exercise of owner's rights, business and management
performance of the company at the request of controllers.
4.
Controllers must meet the following qualifications and conditions:
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b/ Not being
related person of the members of the Members' Council or president of the
company, director or general director and any person who has power to appoint
controllers;
c/ Having
expertise or professional experience in accounting or audit or having expertise
and experience in major business lines of the company, or meeting other
qualifications and conditions as provided for in the company's charter.
Article 72.- Obligations of members
of the Members' Council, president of the
company, director or general director and controllers
1. Members
of the Members' Council, president of the company, director or general director
and controllers shall have the following obligations:
a/ To
observe the laws, the company's charter and decisions of the company owner in
performing their assigned rights and duties;
b/ To
perform their assigned rights and duties in a honest, careful and optimal
manner in order to ensure maximum lawful benefits of the company and company
owner;
c/ To be
loyal toward interests of the company and company owner. Not to use business
information, know-how and opportunities of the company or to abuse positions,
powers and assets of the company for their own benefits or benefits of other
organizations and individuals;
d/ To notify
promptly, fully and accurately the company of enterprises in which they or
their related persons are owners or dominant shareholders or have controlling
capital shares. This notification must be posted up at the head office and
branches of the company;
e/ Other
obligations as provided for by this Law and the company's charter.
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Article 73.- Remuneration, salary and
other benefits of the company's managers and
controllers
1. The company's
managers and controllers shall enjoy remuneration, salaries and other benefits
according to the company's business results and efficiency.
2. The
company owner shall decide on the levels of remuneration, salary and other
benefits of members of the Members' Council, the company president and
controllers. Remuneration, salaries and other benefits of the company's
managers and controllers shall be accounted as business expenses of the company
in accordance with the law on enterprise income tax and other relevant laws and
shall be presented in a separate section in the company's annual financial
statements.
Article 74.- Management organizational
structure of a one-member limited liability
company whose owner is an individual
1. The organization
of a one-member limited liability company whose owner is an individual shall
consist of the president, director or general director. The company's owner
shall be the company's president. The company's president or director or
general director shall be the company's representative-at-law as provided for
in the company's charter.
2. The
company's president may be the company's director or general director or
another person may be hired to take this position.
3. Specific
rights, obligations and duties of the director shall be provided for in the
company's charter and the labor contract signed by the company's director or
general director and the company's president.
Article 75.- Contracts, transactions
between the company and related persons
1. Contracts
or transactions between a one-member limited liability company whose owner is
an organization and the following parties must be considered and approved by
the Members' Council, the president, the director or general director and
controllers according to the majority principle; each of them shall have one
vote:
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b/ The
authorized representative, the director or general director and controllers;
c/ The
persons related to the persons specified at Point b of this Clause;
d/ Managers
of the company's owner and the persons with power to appoint these managers;
e/ Persons
related to the persons specified at Point d of this Clause.
The
representative-at-law of the company must send draft contracts or notifications
on the contents of transactions to the Member's Council, the company's
president, director or general director and controllers; as well as post them
up at the head office and other branches of the company.
2.
Contracts or transactions stated in Clause 1 of this Article shall be approved
if they fully meet the following conditions:
a/ All parties to the contracts or
transactions are independent legal entities, having separate rights,
obligations, assets and interests.
b/ The price
quoted in the contracts or the transactions is the market price at the time of
conclusion of the contracts or performance of the transactions;
c/ The company's owner performs all
obligations specified in Clause 4, Article 65 of this Law.
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4. All
contracts or transactions between a one-member limited liability company whose
owner is an individual and the company's owner or related persons shall be recorded
and filed in separate documents of the company.
Article 76.- Increase and decrease of the charter capital
1. A one-member
limited liability company shall not be allowed to decrease the charter capital.
2. A one-member
limited liability company may increase the charter capital by additional
investment made by the company owner or mobilization of capital contributions
from others.
The owner shall
decide on the method of increasing and the level of increase of the charter
capital. If increasing the charter capital by mobilizing capital contributions
from others, the company must register for conversion into a limited liability
company having two or more members within fifteen days from the date the new
members committed to make capital contribution to the company.
Chapter IV
JOINT-STOCK
COMPANIES
Article 77.- Joint-stock companies
1. A joint-stock company is an enterprise
where:
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b/ Shareholders
may be organizations and/or individuals; the minimum number of shareholders
shall be three and shall not be restricted to any particular maximum number;
c/ Its
shareholders shall be liable for debts and other property liabilities of such
enterprise within the limit of the value of their capital contribution to the
enterprise;
d/ Shareholders
shall be entitled to freely transfer their shares, except the case specified in
Clause 3 of Article 81 or Clause 5 of Article 84 of this Law.
2. A
joint-stock company shall have the legal person status from the date it is
granted a business registration certificate.
3. A
joint-stock company shall be entitled to issue securities of all kinds for
capital mobilization.
Article 78.- Types of share
1. A
joint-stock company must issue ordinary shares. Owners of such shares are
called ordinary shareholders.
2. A
joint-stock company may issue preference shares. Holders of preference shares
are called preference shareholders.
Preference shares include shares of types as described
hereunder:
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b/ Dividend preference shares;
c/ Redeemable preference shares;
d/ Other types of preference share as provided for
in the company's charter.
3. Voting preference shares shall be held only by
government-authorized organizations and founding shareholders. Voting
preference of founding shareholders shall
be effective for three years only after the date of grant of the business registration certificate to the company. After
that, voting preference shares of
founding shareholders shall be
converted into ordinary shares.
4. Those who shall be entitled to buy dividend
preference shares, redeemable preference shares or other types of preference
share shall be provided in the company's charter or decided by the
Shareholders' Meeting.
5. Each share of the same type offers its owners
equal rights, obligations and interests.
6. Ordinary shares shall not be convertible into
preference shares. Preference shares may be converted into ordinary shares under
decisions of the Shareholders' Meeting.
Article 79.- Rights of
ordinary shareholders
1. An ordinary
shareholder shall have the following rights:
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b/ To receive dividend at the level set by the Shareholders'
Meeting;
c/ To be given priority in buying newly issued
shares pro rata to the amount of ordinary shares held by each shareholder in
the company;
d/ To freely
transfer their shares to other shareholders and those who are other than shareholders, except the case specified in Clause 5,
Article 84 of this Law;
e/ To review, search, extract information in the list
of shareholders holding voting rights and request
correction of inaccurate information;
f/ To review,
search, extract or copy the company's charter, the minute book of Shareholders'
Meetings and resolutions of the Shareholders' Meetings;.
g/ Where the
company is dissolved or goes bankrupt, to
receive part of the remaining property in proportion to the shares
contributed to the company;
h/ Other rights provided for by this Law or by the
company's charter.
2. Shareholders or group of shareholders who hold, within at least six consecutive months, over
10% of ordinary shares or a smaller
percentage as provided for in the
company's charter shall have the following rights:
a/ To nominate candidates to the Management Board and the Control Board (if any);
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c/ To request the convening of the Shareholders' Meeting in the case specified in Clause 3 of this
Article;
d/ To request the Control Board to check each specific problem related to the management and operation
of the company when deeming it necessary. Such request must be made in writing
and state the full name, permanent address, nationality, number of the people's
identity card, passport or other lawful personal certification, for
shareholders being individuals; or the name, permanent address, nationality,
number of the establishment decision or the business registration certificate,
for shareholders being organizations; number of shares and time of share
registration by each shareholder, total shares of the whole group of
shareholders and the proportion of ownership in the total number of shares of
the company; issues to be checked, the purpose of checking;
e/ Other rights
as provided for by this Law and the company's charter.
3. Shareholders
or group of shareholders as provided for in Clause 2 of this Article shall be
entitled to request convening of the Shareholders' Meeting in the following
cases:
a/ The
Management Board seriously violates the rights of shareholders, obligations of
managers or makes decisions ultra vires;
b/ The term of
the Management Board is over six months and the new Management Board has not
yet been elected to replace the former;
c/ Other cases
as provided for in the company's charter.
The request
must be made in writing and state the full name, permanent address, number of
the people's identity card, passport or other lawful personal certification,
for shareholders being individuals; or the name, permanent address,
nationality, number of the establishment decision or the business registration
certificate, for shareholders being organizations; number of shares and time of
share registration by each shareholder, total shares of the whole group of
shareholders and the proportion of ownership in the total number of shares of
the company; grounds and reasons to request convening of the Shareholders'
Meeting. Attached with the request must be materials, evidence of violations by
the Management Board, the severity of violations or the decisions already
issued ultra vires.
4. Unless
otherwise provided for in the company's charter, the nomination of candidates
to the Management Board and the Control Board provided for at Point a, Clause 2
of this Article shall be effected as follows:
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b/ Depending on
the number of members of the Management Board and the Control Board, the
Shareholders' Meeting shall decide on the number of representatives nominated
by shareholders or groups of shareholders provided for in Clause 2 of this
Article. If the number of nominees nominated by shareholders or groups of
shareholders is smaller than the number they shall be entitled to nominate
according to the decision of the Shareholders' Meeting, the remaining nominees
shall be selected by the Management Board, the Control Board and other
shareholders.
Article 80.- Obligations of ordinary shareholders
1. To make full
payment for their subscribed shares within ninety days from the date the
company is granted the business registration certificate and to be liable for
debts and other property liabilities of the company within the amount of the paid-in
capital.
Not to withdraw
the paid-in capital in the form of ordinary shares from the company in any
form, except the case where the company buys back the shares or the shareholder
sells the shares to other persons. If a shareholder withdraws part or the whole
of the paid-in capital contrary to the provisions of this Clause, all the
members of the Management Board and the company's representative-at-law shall be jointly responsible for debts and
other property liabilities of the company within the value of the withdrawn
shares.
2. To observe the charter and internal
management regulations of the company;
3. To abide by decisions of the
Shareholders' Meeting and of the Management Board;
4. To
perform other obligations as provided for by this Law and the company's
charter.
5. Ordinary
shareholders shall take personal responsibility when committing in the name of
the company in any form the following acts:
a/ Violating
law;
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c/ Paying undue
debts when the company is facing possible financial risks.
Article 81- Voting preference shares and rights of voting
preference shareholders
1. A voting
preference share is a share that carries a number of votes more than that
carried by an ordinary share. The specific number of votes carried by such a
share shall be determined in the company's charter.
2. A voting
preference shareholder shall have the following rights:
a/ To vote on
all issues within the competence of the Shareholders' Meeting with the number
of votes as provided in Clause 1 of this Article;
b/ Other rights
as of ordinary shareholders, except the case specified in Clause 3 of this
Article.
3. Shareholders
owning voting preference shares shall not be allowed to transfer such shares to
others.
Article 82.- Dividend preference shares and rights of
dividend preference shareholders
1. A dividend
preference share is a share that entitles its holder to receive a dividend at a
higher level than that of ordinary shares or at a stable annual level. Annual
dividend of such share comprises fixed dividend and bonus dividend. Fixed
dividend is paid regardless of the business result made by the company. The
specific amount of fixed dividend and the method for calculation of bonus
dividend shall be stated in certificates of dividend preference share.
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a/ To receive
dividend at the level stated in Clause 1 of this Article;
b/ Where the
company is dissolved or becomes bankrupt, to receive, in proportion to the
total shares held, part of its remaining assets after the company has paid all
debts and redeemable preference shares;
c/ Other rights
as an ordinary shareholder, except the case stated in Clause 3 of this Article.
3. Dividend preference shareholders shall
not be entitled to vote, to attend the Shareholders' Meeting, and to nominate
representatives in the Management Board and the Control Board.
Article 83.- Redeemable preference shares and rights of
redeemable preference shareholders
1. A redeemable
preference share is a share that is bought back by the company anytime upon
request of its holder, or under circumstances stated in the certificate of such
share.
2. A redeemable
preference shareholder shall have other rights as an ordinary shareholder,
except those in Clause 3 of this Article.
3. Redeemable
preference shareholders shall not be entitled to vote, to attend the
Shareholders' Meeting, and to nominate representatives in the Management Board
and the Control Board.
Article 84.- Ordinary shares of founding shareholders
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2. Within
ninety days as from the date the company is granted a business registration
certificate, the company must inform the business registration office about
equity capital contribution. The notification must contain the following
principal contents:
a/ Name,
address of the head office, number and date of grant of the business
registration certificate, and place of business registration;
b/ Total number
of ordinary shares which may be offered for sale, and number of subscribed
shares of the founding shareholders.
c/ Name,
permanent address, nationality, number of the people's identity card, passport
or other lawful personal certification, number of the establishment decision or
business registration certificate; number of subscribed shares, numbers and
value of paid-in shares, types of asset used to make equity capital
contribution by each founding member;
d/ Total of
shares and value of paid-in shares of all founding shareholders;
e/ Full name
and signature of the company's representative-at-law.
The
representative-at-law of the company shall be personally responsible for any
company's and others' losses if the notice is late, inaccurate, dishonest or
incomplete.
3. If a founding shareholder does not pay
in full for the subscribed shares, those shares shall be dealt with in one of
the following ways:
a/ All remaining
founding shareholders shall fully pay for such shares in proportion to their
share ownership in the company;
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c/ Others who are not founding shareholders shall be
mobilized to fully pay for such shares and shall become founding shareholders
of the company. In this case, founding shareholders who have not yet fully paid
for the subscribed shares shall no longer be founding shareholders of the
company.
Where the
subscribed shares of the founding shareholders
have not yet been paid for, all founding shareholders shall jointly be
responsible for debts and other property responsibilities of the company within
the value of shares not yet be paid for.
4. In case
founding shareholders do not subscribe all shares, the remaining shares must be
offered and sold out within three years as from the date the business
registration certificate is granted to the company.
5. Within three
years as from the date the business registration certificate is granted to the
company, founding shareholders shall be free to transfer their ordinary shares
to other founding shareholders. Ordinary shares of founding shareholders may be
transferable to persons who are not founding shareholders if so approved by the
Shareholders' Meeting. In this case, shareholders who plan to transfer their shares shall not be entitled to vote
on such transfer and the transferees shall become founding shareholders.
After three
years from the date the business registration certificate is granted to the
company, all restrictions imposed upon founding shareholders shall be
abolished.
Article 85.- Share certificates
1. Certificates
issued by a joint-stock company or recorded in the book entry evidencing the
ownership of one or more shares issued by such company are referred to as share
certificates. A share certificate may be either bearer share certificate or
non-bearer share certificate. A share certificate shall contain the following
principal contents:
a/ Name, and
address of the head office of the company;
b/ Number and
date of grant of the business registration certificate;
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d/ Face value
of each share and the total face value of shares specified in the share
certificate;
e/ Full name,
permanent address, nationality, number of the people's identity card, passport
or Other lawful personal certification of
the shareholder being an individual; name, permanent address,
nationality, number of the establishment decision or business registration
certificate of the shareholder being in an organization, for non-bearer share
certificates;
f/ Summary of
procedures of transfer of shares;
g/ Specimen
signature of the representative-at-law and seal of the company;
h/ The
registration number recorded in the company's register book of shareholders and
date of issue of share certificates;
i/ Other
contents as described in Articles 81, 82 and
83 of this Law, for preference share certificate(s).
2. All
mistakes, if any, in the contents and format of share certificates issued by
the company do not affect the rights and benefits of its owner. The chairman of
the Management Board and the director or general director of the company shall
jointly be responsible for losses caused by such mistakes to the company.
3. Where a
share certificate is lost, torn, burnt, or otherwise destroyed, the holder of
such share certificate may request the company to re-issue the share
certificate.
Such request
shall contain commitments that;
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d/ The
requesting shareholder shall be responsible for disputes arising from the issuance
of new share certificate.
For shares with
a par value of more than VND ten million, prior to the receipt of the request
for issue of new share certificate(s), the company's representative-at-law may
ask the shareholder(s) to publish an announcement that the share certificate
has been lost, burnt or otherwise destroyed and after fifteen days from the
date of publication, a request for issue of new share certificate(s) shall be
made.
Article 86.- Register book of shareholders
1. A
joint-stock company must make and retain a register book of shareholders from
the date it is granted the business registration certificate. Such book may be
in writing or in electronic files, or both.
2. A register book of shareholders must
contain the following principal contents:
a/ Name, and
address of the head office of the company;
b/ Total number
of shares which may be offered for sale, types of shares which may be offered
for sale and quantity of each type;
c/ Total number
of paid-in shares of each type and value of paid-in equity capital;
d/ Full name,
permanent address, nationality, number of the people's identity card, passport
or other lawful personal certification of the shareholder being an individual;
name, permanent address, nationality, number of the establishment decision or
business registration certificate of the shareholder being in an organization.
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The register
book of shareholders shall be kept at the head office of the company or
securities registration, custody, clearing and payment center. Shareholders
shall have the right to check, search, extract and copy the content of the
register book of shareholders at any time during the working hours of the
company or securities registration, custody, clearing and payment center.
Shareholders
owning 5% or more of the total number of shares shall be registered with the
authorized business registration office within seven working days as from the
date they acquire that ownership percentage.
Article 87.- Offer for sale and transfer of shares
1. The
Management Board shall have the right to decide on the time, method and offer
price of shares within the quantity of shares which may be offered for sale.
The offer price of shares must not be lower than the market price at the time
of offer or the book-value of the shares at the most recent time, except the
following cases where:
a/ Shares are
offered for the first time to those who are not founding shareholders;
b/ Shares are
offered to all shareholders in accordance with their existing share proportions
in the company;
c/ Shares are
offered to brokers and guarantors. In this case, the discount or discount rate
must be approved by the number of shareholders representing at least 75% of
total voting shares;
d/ Other cases
and the discount rate in such cases is provided for in the company's charter.
2. In case the
company issues additional ordinary shares and offers them to all ordinary
shareholders in accordance with their existing share proportions in the
company, the following provisions must be complied with:
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b/ The notice
must state full name, permanent address, nationality, number of the people's
identity card, passport or other lawful personal certification, for
shareholders being individuals; name, permanent address, nationality, number of
the establishment decision or business registration certificate, for
shareholders being organization; number of shares and share equity proportion
of every shareholder in the company, total shares to be issued and number of
shares that shareholders shall be entitled to buy; the offer price; time limit
for subscription registration; full name and signature of the company's
representative-at-law. The time limit specified in the notice must be
reasonable for shareholders to be able to subscribe. The notice must be
attached with a subscription registration form issued by the company;
c/ Shareholders
may transfer their priority right to buy shares to others;
d/ If the share
subscription registration form is not sent to the company within the time limit
specified in the notice, the related shareholder shall be considered not
receiving the priority right to buy shares. If the shares intended to be issued
are not fully subscribed by shareholders and transferees of the priority right
to buy shares, the remaining shares shall be managed by the Management Board.
The Management Board may distribute these shares to shareholders of the company
or to other persons in an appropriate manner provided that the conditions
offered to such persons are not better than those offered to shareholders,
unless it is otherwise approved by the Shareholders' Meeting or shares are sold
through the stock exchange.
3. Shares shall
be deemed to be sold when they are paid for in full and information of the
buyer provided for in Clause 2, Article 86 of this Law is sufficiently and
truthfully recorded in the register book of shareholders; from that time on,
the buyer of such shares shall become a shareholder of the company.
4. After shares
are sold, the company shall issue and grant
share certificates to buyers. The company may opt to sell shares without
issuing share certificates. In such case, information regarding shareholders as
provided for in Clause 2, Article 86 of this Law recorded in the register book
of shareholders shall be sufficient to certify such share holders' ownership of
shares in the company.
5. All share certificates may be freely
transferable, except cases specified in Clause 3, Article 81, and Clause 5,
Article 84 of this Law. The transfer may be made in writing as usual or by mere
delivery. The transfer paper must be signed by the transferor and transferee or
by their authorized representatives. The transferor shall still be the owner of
the relevant shares until the name of the transferee is recorded in the
register book of shareholders.
Where only some
shares of a bearer share certificate are transferred, the old share certificate
shall be cancelled and the new share certificate stating the transferred shares
and the remaining shares shall be issued by the company.
6. Conditions,
methods and procedures for public share sale offer shall comply with the
provisions of law on securities.
The Government
shall guide the offer of individual shares for sale.
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A joint-stock
company shall be entitled to issue bonds, convertible bonds, and other types of
bond in accordance with the provisions of law and the company's charter.
A company is
not allowed to issue bonds in the following cases, unless otherwise provided
for in the securities law:
a/ The company
fails to make full repayment for the principal and interest of issued bonds or
has not yet paid or paid not in full due debts over the last three consecutive
years;
b/ The average
after-tax profit ratio of the last three consecutive years is not higher than
the intended interest paid to bonds to be issued.
The issuance of
bonds to creditors being selected financial institutions shall not be subject
to the restrictions stated at Points a and b of this Clause.
3. Unless
otherwise provided for in the company's
charter, the Management Board shall have the right to decide on types of bond,
the total value of bonds and time of
issuance, but shall have to report their decisions to the Shareholders' Meeting in the next meeting. Such report must be attached with materials and dossiers for
explaining the decisions of the
Management Board on the bond issuance.
Article 89.- Payment for
shares, bonds
Shares and
bonds of a joint-stock company shall be paid in either Vietnam dong, freely
convertible foreign currencies, gold, value of land use rights, value of
intellectual property rights, technology and technical know-how or other assets
as provided for in the company's charter, and must be paid in full once.
Article 90.- Buy-back of
shares at the request of shareholders
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2. A company
must buy back from the shareholder, at his/her request as provided for in
Clause 1 of this Article, his/her shares at the market price or a price
calculated on the principles provided for in the company's charter within
ninety days as from the date of receipt of such request. Where agreement cannot
be reached on such price, the shareholder may sell the shares to another person
or the company and the shareholder may request a professional valuation
organization to determine the price. The company shall introduce at least three
professional valuation organizations for selection by the shareholder and such
selection is the final decision.
Article 91.- Buy-back of
shares as a result of company decisions
A company shall
be entitled to buy back no more than 30% of total number of its issued ordinary
shares, a portion or all of its sold preferential shares in accordance with the
following provisions:
1. The
Management Board shall have right to decide on a buy-back of no more than 10%
of total number of shares of each type already offered and sold for every 12
months. In other cases, the buy-back of shares shall be decided by the
Shareholders' Meeting.
2. The
Management Board shall set the price for the buy-back of shares. For ordinary
shares, the set price shall not be higher than their market price at the time
of buyback, unless otherwise provided for in Clause 3 of this Article. The
price of other types of shares shall not be lower than their market price,
unless otherwise provided for in the company's charter or otherwise agreed
between the company and related shareholders.
3. The company
may buy back a number of shares from every shareholder corresponding to his/her
equity proportion in the company. In this case, a notice of such decision by
the company shall be sent via registered mail to all shareholders within thirty
days as from the date of approval of such decision. A notice so made must
contain the name and address of the head office of the company, the total
number and types of shares to be bought back, price of such buy-back or
principles for determination of such price, procedures and time limit for
payment, procedures and time limit for shareholders to offer the company their
shares.
Shareholders
who agree to resell their shares must send their offers via registered mail to
the company within thirty days after the notice date. Such a offer must state
the full name, permanent address, number of the people's identity card,
passport or lawful personal certification of the shareholder being an
individual; name, permanent address, nationality, number of the establishment
decision or business registration certificate of the shareholder being an
organization, total shares owned, number of shares on sale; payment method,
signature of the shareholder or his/her representative-at-law. The company
shall only buy back shares offered within the said time limit.
Article 92.- Payment conditions and handling of share
buy-backs
1. A company
may make payment for the share buy-backs to shareholders in accordance with the
provisions of Article 90 and Article 91 of this Law where immediately
subsequent to such payment, the company shall still be able to pay off
all due debts and other property liabilities.
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3. Share
certificates certifying the ownership of the bought-back shares shall be
destroyed as soon as the respective shares have been paid in full. The chairman
of the Management Board and the director or general director shall be jointly responsible for any losses caused
by non-destruction or delayed destruction of such share certificates to the
company.
4. Where a full
payment of bought-back shares results in a decrease in the total book value of
the company's assets by more than 10%, the company shall have to notify all of
its creditors thereof within fifteen days as from the date of such payment.
Article 93.- Payment of dividends
1. Dividends
for preference shares shall be paid according to specific conditions on each
type of preference share.
2. Dividends
payable to ordinary shares shall be determined on the basis of realized net
profits and paid from the source of profits retained by the company. A
join-stock company may pay dividends to its shareholders after its tax and
other financial obligations have been fulfilled in accordance with the
provisions of law, contributions to the company's funds have been made and
previous losses have been fully covered in accordance with the provisions of
law and the company's charter; and immediately after full payment of dividends,
the company must still be able to fully pay all due debts and other property
liabilities.
Dividends may
be paid in cash, shares or other assets as provided for in the company's
charter. In case of payment in cash, the payment must be made in Vietnam dong,
possibly by check or money order sent by post to the permanent addresses of
shareholders.
Dividends may
be paid through bank transfer when the company has all information on
shareholders' banks enabling the company to make direct transfer to the
shareholders' bank accounts. If the company has transferred the money according
to the bank information provided by shareholders, it shall not be responsible
for any losses incurred from that transfer.
3. The Management Board must make a list
of shareholders who get paid and determine the amount of dividend per share, the
time and form of payment at least thirty days prior the date on which the
payment of dividends is to be made. The notice of dividend payment must be sent
via registered mail to the registered addresses of al! share holders not later
than fifteen days prior to the date of such payment. Such notice must contain
the name of the company, the full name, permanent address, nationality, number
of the people's identity card, passport or other lawful personal certification
of the shareholder being an individual or the number of the establishment
decision or registration business certificate of the shareholder being an
organization, the quantity of shares of each type of the shareholder; the
amount of dividend per share and the total dividend to be received by such
shareholder, the time and mode of payment, the full name and signature of the
chairman of the Management Board and the representative-at-law of the company.
4. Where a
shareholder transfers his/her shares at a time between the completion of the
shareholders list and the dividend payment, the transferor shall receive the
dividends paid by the company.
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Where the
payment for a share buy-back does not comply with the provisions of Clause 1,
Article 92 of this Law or the payment of dividends is contrary to the
provisions of Article 93 of this Law, all shareholders must refund the company
the paid money amounts or assets they have received; where a shareholder is
unable to do so, that shareholder and all members of the Management Board shall
jointly be liable for all debts and other property liabilities of the company
within the value of money amounts and assets already paid to the shareholder
but not yet refunded.
Article 95.- Organizational structure of management of
joint-stock companies
A joint-stock
company shall comprise: the Shareholders' Meeting; the Management Board, the
director or general director; for a company with more than eleven shareholders being
individuals or with a shareholder being an organization holding more than 50%
of total shares, it must also have the Control Board.
The chairman of
the Management Board or the director or general director is representative-at-1
aw of the company as provided for in the company's charter. The
representative-at-law of a company must permanently reside in Vietnam; in case
he/ she is absent from Vietnam for more than thirty days, he/she must authorize
in writing another person to exercise the rights and perform the duties of a
representative-at-law of the company.
Article 96.- Shareholders' Meetings
1. All shareholders with voting rights
shall make up the Shareholders' Meeting that acts as the highest
decision-making body of a joint-stock company.
2. The Shareholders' Meeting shall have
the following rights and duties:
a/ To adopt
orientations of development of the company;
b/ To decide on
types and total quantity of shares of each type the company is allowed to
offer; decide on the annual amount of dividend per share of each type, unless
otherwise provided for in the company's charter;
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d/ To decide on
investment or approve the sale of 50% or more of the total value of assets
recorded in the company's latest financial statement unless a different
percentage is provided for in the company's charter;
e/ To decide on
the amendment or supplementation of the company's charter, except where there
is an adjustment to the charter capital as a result of selling new shares
within the total quantity of shares the company is allowed to offer as provided
for in the company's charter;
f/ To approve
annual financial statements;
g/ To decide on
the buy-back of more than 10% of sold shares of each type;
h/ To
investigate and handle violations committed by the Management Board and the Control Board which cause damage to the company and
its shareholders;
i/ To decide on
the reorganization and dissolution of the company;
j/ Other rights
and duties as provided for by this Law and the company's charter.
3. Shareholders
being organizations may appoint one or more authorized representatives to
exercise their rights in accordance with the provisions of law. If more than
one authorized representative is appointed, the number of shares and votes of
each authorized representative must be determined. The appointment, termination
or replacement of authorized representatives must be notified in writing to the
company at the earliest convenience. The
notice must contain the following principal contents:
a/ Name,
permanent address, nationality, number and date of the establishment decision
or business registration certificate of the shareholder;
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c/ Full name,
permanent address, nationality, number of the people's identity card, passport
or other lawful personal certification of the authorized representative;
d/ Number of
authorized shares;
e/ Duration of
authorization;
f/ Full name
and signature of the authorized representative and the representative-at-law
for the shareholder.
The company
must send a notice on the authorized representative stated in this Clause to
the business registration office within five working days as from the date of
receipt of such notice.
Article 97.- Competence to convene meetings of the
Shareholders' Meeting
1. The
Shareholders' Meeting shall meet regularly or irregularly, at least once a
year. The venue of meetings of the Shareholders' Meeting must be in the
territory of Vietnam.
2. The
Shareholders' Meeting shall hold a regular meeting within four months after the
end of a fiscal year. At the request of the Management Board, the business
registration office may extend this time limit which must, however, not exceed
six months after the end of a fiscal year.
A regular
meeting of the Shareholders' Meeting shall discuss and approve:
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b/ Report of the
Management Board on the evaluation of the business management in the company;
c/ Report of
the Control Board on management work of the Management Board and the director
or general director;
d/ Dividend per
share of each type;
e/ Other issues
within its competence.
3. The Management Board must convene an
irregular meeting of the Shareholders' Meeting in the following cases:
a/ The
Management Board considers it necessary for the benefits of the company;
b/ The number
of remaining members of the Management Board is smaller than as provided for by
law;
c/ At the
request of a shareholder or group of shareholders as provided for in Clause 2,
Article 79 of this Law;
d/ At the
request of the Control Board;
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4. Unless
otherwise provided for by the company's charter, the Management Board shall
convene a meeting of the Shareholders' Meeting within thirty days as from the
date it has the number of its remaining members as provided for at Point b or
the date of receipt of the request mentioned at Point c and d, Clause 3 of this
Article.
Where the
Management Board fails to convene a meeting of the Shareholders' Meeting as
provided for, its chairman shall be responsible before law therefor and
compensate for any damage caused to the company.
5. Where the Management Board fails to
convene a meeting of the Shareholders' Meeting as provided for in Clause 4 of
this Article, within the next thirty days, the Control Board shall, in place of
the Management Board, convene a meeting of the Shareholders' Meeting in
accordance with this Law.
Where the
Control Board fails to convene a meeting of the Shareholders' Meeting as
provided for, the head of the Control Board shall be responsible before law
therefor and compensate for any damage caused to the company.
6. Where the Control Board fails to
convene a meeting of the Shareholders' Meeting as provided for in Clause 5 of
this Article, the requesting shareholder or group of shareholders mentioned in
Clause 2, Article 79 of this Law, shall, in place of the Management Board and
the Control Board, have the right to convene a meeting of the Shareholders'
Meeting in accordance with this Law.
In this case,
the shareholder or group of shareholders convening a meeting of the Shareholders
Meeting may request the business registration office to supervise the convening
process and the meeting if necessary.
7. The
convener(s) of the a meeting of Shareholders' Meeting must make a list of
shareholders entitled to participate in the meeting, provide information on and
resolve complaints about such list of shareholders, prepare the agenda,
contents and materials for such meeting, set the time and decide on the venue
thereof, send meeting invitations to each shareholder entitled to participate in
the meeting in accordance with this Law.
8. All expenses arising from the convening
and proceeding of meetings of the Shareholders' Meeting as provided for in
Clauses 4, 5 and 6 of this Article shall be reimbursed by the company.
Article 98.- List of shareholders entitled to participate in
a meeting of the Shareholders' Meeting
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2. The list of
shareholders entitled to participate in a meeting of the Shareholders' Meeting
shall include full name, permanent address, nationality, number of the people's
identity card, passport or other lawful personal certification of every
shareholder being an individual, or number of the establishment decision or
business registration certificate of every shareholder being an organization;
quantity of shares of each type; number and date of registration of each
shareholder.
3. Every
shareholder shall have the right to check, search, extract and copy the list of
shareholders eligible for participation in meetings of the Shareholders'
Meeting; to request amendment of incorrect information or addition of necessary
information on him/herself in such list.
Article 99.- Agenda and contents for meetings of the
Shareholders' Meeting
1. The convener(s) of the Shareholders'
Meeting must make a list of shareholders entitled to participate in the meeting
and to vote; prepare the agenda, and materials for the meeting and draft
resolutions for each issue in the agenda, determine the time and venue of the
meeting and send invitations to all shareholders eligible for participation in
the meeting.
2. Individual shareholders or group of
shareholders mentioned in Clause 2, Article 79 of this Law may propose matters
to be included in the meeting agenda of a meeting of the Shareholders' Meeting.
Such proposals shall be made in writing and forwarded to the company at least
three working days before the opening date of such meeting; unless otherwise
provided for in the company's charter. Such a proposal must specify the names
of such shareholders, the quantity of shares of each type held by them, number
and date of shareholder registration in the company, and matters proposed for
inclusion in the meeting agenda.
3. The convener(s) of the Shareholders'
Meeting may refuse proposals defined in Clause 2 of this Article in one of the
following cases:
a/ Such
proposals are not forwarded within the specified time limit or contain
incorrect or insufficient information;
b/ The proposed
matters are not within the deciding competence of the Shareholders' Meeting;
c/ Other
circumstances as provided for in the company's charter.
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Article 100.- Invitation to meetings of the Shareholders'
Meeting
1. The convener(s) of the Shareholders'
Meeting shall forward invitations to all shareholders eligible for
participation in meetings of the Shareholders' Meeting at least seven working
days before the opening date thereof unless such a time limit is provided for
in the company's charter. Invitations shall be forwarded to the permanent
addresses of shareholders via registered mail.
An invitation shall
state the name, address of the head office, number and date of the business
registration certificate, place of business registration of the company; name
and permanent address of the shareholder or the shareholder's authorized
representative, time and venue of the meeting.
2. Such
invitations shall be enclosed with the form of authorization of
representative for attending the meeting, the voting card, discussion materials
as grounds for adoption of decisions, and draft resolutions for each issue
included in the meeting agenda.
If the company has a website, meeting invitations
and enclosed materials must be posted on the website as well as
forwarded to shareholders.
Article 101.- Authorization to participate in meetings of
the Shareholders' Meeting
1. A shareholder
being an individual or an authorized representative of a shareholder being an
organization may directly or authorize in writing another person to participate
in a meeting of the Shareholders' Meeting. If a shareholder being an
organization does not have an authorized representative as provided for in
Clause 3, Article 96 of this Law, it may authorize a person to attend a meeting
of the Shareholder's Meeting.
2. The
authorization of a representative to attend a meeting of the Shareholders'
Meeting shall be made in writing according to a form set by the company and
must be signed according to the following provisions:
a/ If the
authorizing shareholder is an individual, there must be a signature of that
shareholder and a signature of the authorized person;
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c/ In other
cases, there must be a signature of the representative-at-law of the
shareholder and the person authorized to attend the meeting.
The person
authorized to attend a meeting of the Shareholder's Meeting must submit the
authorization document before attending the session.
3. Except for the case mentioned in Clause
4 of this Article, the voting of the personal authorized to attend the meeting
within the scope of authorization shall be effective even in the following cases:
a/ The
authorizer is dead or his/her civil act capacity is lost or restricted;
b/ The
authorizer terminates the authorization.
4. The
provisions of Clause 2 of this Article shall not be applicable if the company
receives a written notice on one of the cases specified in Clause 2 of this
Article within twenty-four hours before the opening of a meeting of the
Shareholders' Meeting.
5. Where a
shareholder transfers his/her own shares within the duration from the date of
completion of the list of shareholders to the opening date of the Shareholders'
Meeting session, the transferee shall have the right to participate in such
session in place of the transferor with respect to such transferred shares.
Article 102.- Conditions for conducting meetings of the Shareholders'
Meeting
1. A meeting of
the Shareholders' Meeting shall be conducted where it is attended by a number
of shareholders that own at least 65% of the voting shares. The specific ratio
shall be provided for in the company's charter.
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3. Where the
second meeting fails to satisfy the conditions provided for in Clause 2 of this
Article, the third session shall be convened within twenty days after the
proposed opening date of the second meeting. In this case, the third meeting of
the Shareholders' Meeting shall be held regardless of the number of
participating shareholders and the ratio of their voting shares.
4. Only the Shareholders'
Meeting may alter the meeting agenda enclosed with the invitations in accordance with the provisions of Article 100 of
this Law.
Article 103.- Procedures for conducting meetings of the
Shareholders' Meeting and for voting thereat
Unless otherwise
provided for in the company's charter, procedures for conducting meetings of
the Shareholders' Meeting and for voting thereat shall comply with the
following provisions:
1. Before the
opening date of a meeting of the Shareholders' Meeting, attendance registration
must be undertaken and continued until all eligible participating shareholders
are registered. Upon registration, participants shall be provided with voting cards corresponding to the number of
issues to be voted in the meeting agenda.
2. The chair,
secretary and vote-counting committee of a meeting of the Shareholders' Meeting
shall be defined as follows:
a/ The chairman
of the Management Board shall chair meetings convened by the Management Board. Where
he/she is absent or temporarily lost the ability to work, the remaining members
shall elect one of them to be the chair of
the meeting. In case none of the members may act as the chair, the
highest ranking member of the Management Board shall guide the Shareholders'
Meeting to elect a chair of the meeting from participating members and the
member who receives the highest number of votes shall chair the meeting;
b/ In other
cases, the person who signs the decision to convene a meeting of the Shareholders'
Meeting shall guide the Shareholders' Meeting to elect the chair of the meeting
and the person who receives the highest number of votes shall chair the
meeting;
c/ The chair
shall appoint a person to be the secretary in charge of taking the meeting minutes;
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3. The meeting
agenda and contents must be approved by the Shareholders' Meeting in the
opening session. The meeting agenda must define details and timing for each of
the issues to be discussed.
4. The chair
and secretary of the meeting of the Shareholders' Meeting may take measures as
necessary in order to chair the meeting in a proper and orderly manner, and in
compliance with the approved agenda; or to make the meeting reflect the
opinions of the majority of participants.
5. The
Shareholders' Meeting shall discuss and vote each of the issues in the meeting
agenda. The voting shall be conducted by firstly collecting voting cards that
support the resolution, then collecting voting cards that oppose it, and
finally counting the supporting voting cards, opposing voting cards, and
"blank" ones. The counting results shall be announced by the chair
before the meeting is closed.
6. Shareholders
or authorized persons who come after the meeting opened shall be entitled to
register and vote after registration. The chair must not stop the meeting for
the latecomers to register; in this case the effect of votes that have been done
shall not be affected.
7. The person
who convenes a meeting of the Shareholders' Meeting shall have the following
rights:
a/ To ask all
participants to go through screening checks or other security measures;
b/ To ask
competent agencies to maintain the order of the meeting; expel from the session
those who do not comply with the chair's instructions, or intentionally disturb
and hinder the smooth progress of the meeting, or refuse to comply with the
security checking requirements.
8. The chair may delay a meeting which is
attended by a sufficient number of registered participants till another time or
change it to another location in the following cases:
a/ There is not
enough space for all participants to be conveniently seated;
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The delay time
shall not exceed three days after the intended date of the meeting.
9. In case the chair delays or temporarily
postpones the meeting of the Shareholders' Meeting contrary to the provisions
of Clause 8 of this Article, the Shareholders' Meeting shall elect one of
participants to be the chair, who shall chair the session until it closes, and
the effect of votes at that session shall not be affected.
Article 104.- Adoption of decisions of the Shareholders'
Meeting
1. The
Shareholders' Meeting shall adopt decisions within its competence by voting
during its meetings or by collecting written opinions.
2. Unless
otherwise provided for in the company's charter, decisions on the following
issues shall be adopted by voting during meetings of the Shareholders' Meeting:
a/ Amendment
and supplementation of the company's charter;
b/ Development
orientations for the company;
c/ Decision on
types of shares and total number of shares of each type which may be offered
for sale;
d/ Election,
removal from office or dismissal of members of the Management Board or Control
Board;
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f/ Approval of
annual financial statements;
g/
Re-organization or dissolution of the company.
2. A decision
made by the Shareholders' Meeting shall be adopted during a meeting when it
satisfies all the following conditions:
a/ It is
approved by at least 65% of total votes of all participating shareholders; the
specific ratio shall be provided for in the company's charter;
b/ It is
approved by at least 75% of total votes of all participating shareholders, for
decisions on types of shares and number of shares of each type allowed to be
offered for sale; amendments and supplements to the company's charter;
reorganization or dissolution of the company; or investment or sale of assets
valued at 50% or more of the total value of assets recorded in the company's
latest financial statements, unless a different percentage is provided for in
the company's charter; the specific ratio shall be provided for in the
company's charter;
c/ The voting
for electing members of the Management Board or Control Board shall be
implemented by accumulatively calculating the votes, thereby each shareholder
shall have a total number of voting cards corresponding to the total number of
shares he/she owns multiplied by the number of elected members of the
Management Board or Control Board, and the shareholders can accumulate their
voting cards for one or a number of candidates.
4. Decisions
adopted during the Shareholders' Meeting meetings by shareholders and
authorized representatives representing 100% of the voting shares shall be
lawful and take immediate effect even in cases where the order and procedures
for convention, the meeting agenda and the conducting procedures were carried
out in contravention of regulations.
5. Where a
decision of the Shareholders' Meeting is proposed to be adopted by collecting
written opinions, such decision shall be adopted if approved by a number of
shareholders who own at least 75% of the total votes; the specific ratio shall
be provided for in the company's charter.
6. Decisions adopted by the Shareholders'
Meeting must be notified to shareholders eligible to attend meetings of the
Shareholders' Meeting within fifteen days as from the date of adoption thereof.
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Unless
otherwise provided for in the company's charter, the competence and procedures
for collecting written opinions of shareholders to adopt decisions of the
Shareholders' Meeting shall comply with the following provisions:
1. The
Management Board may collect shareholders' written opinions in order to adopt
decisions of the Shareholders' Meeting at any time when it deems it
necessary for the benefits of the company.
2. The
Management Board must prepare opinion cards, draft decisions of the
Shareholders' Meeting and explanatory documents for the draft decisions. These
shall be sent via registered mail to the permanent address of every
shareholder.
3. An opinion
card must have the following principal contents:
a/ Name,
address of the head office, number and date of grant of the business
registration certificate, place of business registration of the company;
b/ Purpose for
collecting opinions;
c/ Full name,
permanent address, nationality, number of the people's identity card, passport
or other lawful personal certification of the shareholder being an individual;
name, permanent address, nationality, number of the establishment decision or
business registration certificate of the shareholder being an organization;
number of shares of each type and number of votes of the shareholder;
d/ Issues to be
commented for the adoption of the decision;
e/ Voting
options: "Yes", "No" and "Blank";
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g/ Full names
and signatures of the chairman of the Management Board and the
representative-at-law of the company.
4. Filled-in opinion cards must be signed
by shareholders being individuals or by the authorized representatives or the
representatives-at-law of shareholders being organizations.
Filled-in
opinion cards must be put in sealed envelopes and no person shall be allowed to
open such envelopes before vote counting. Those filled-in opinion cards that
are sent to the company after the deadline specified in the opinion cards or
are opened shall be considered invalid.
5. The Management Board shall count the
votes and make a vote counting minutes in the presence of the Control Board or
shareholders who do not hold managerial titles in the company.
A vote counting
minutes must contain the following principal contents:
a/ Name,
address of the head office, number and date of grant of the business registration
certificate, and place of business registration ;
b/ Purposes and
issues for collecting opinions for the adoption of the decision;
c/ Number of
voting shareholders and total number of their votes, in which the numbers of
valid and invalid votes shall be specified, attached with a list of voting
shareholders;
d/ Total
numbers of votes that are "for", "against" or
"blank" with respect to each of the issues;
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f/ Full names
and signatures of the chairman of the Management Board, the
representative-at-law of the company, and the vote-counting controllers.
Members of the
Management Board and vote counting controllers shall be jointly responsible for
the truthfulness and accuracy of the vote counting minutes; and jointly liable
for any damage caused by decisions which were adopted due to untruthful and
inaccurate vote counting results.
6. The vote
counting minutes must be sent to all shareholders within fifteen days as from
the date of completion of vote counting.
7. All filled-in
opinion cards, vote-counting minutes, full texts of the adopted resolutions and
relevant documents attached with opinion cards must be preserved at the
company's head office.
8. Decisions
adopted by collecting written opinions from shareholders shall be as valid as
those adopted at the meetings of the Shareholders' Meeting.
Article 106.- Minutes of meetings of the Shareholders'
Meeting
1. Any meeting
of the Shareholders' Meeting shall be recorded in a minutes that shall be
written in Vietnamese and may also be in a foreign language and shall contain
the following principal contents:
a/ Name,
address of the head office, number and date of grant of the business
registration certificate, place of business registration;
b/ Time and
venue of the meeting of the Shareholders' Meeting;
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d/ Names of the
chair and secretary of the meeting;
e/ Summary of
the meeting proceedings and opinions and speeches made during the meeting on
each issue in the meeting agenda;
f/ Number of
participating shareholders and their total votes, attached with the annex of a
list of shareholders and shareholders' authorized representatives registered to
participate, with numbers of their respective shares and votes;
g/ Total number
of votes with respect to each issue voted; in which the numbers of
"for", "against" or "blank" votes are specified,
the respective proportion over the total votes of participating shareholders;
h/ Adopted
decisions;
i/ Full names
and signatures of the chair and secretary.
Minutes written
in Vietnamese and a foreign language shall be of equivalent legal validity.
2. The minutes of a meeting of the
Shareholders' Meeting must be completed and approved before the meeting closes.
3. The chair and secretary shall be jointly
responsible for the truthfulness and accuracy of the minutes.
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The minutes of
a meeting of the Shareholders' Meeting attached with the annex of a list of
shareholders registered to participate in the meeting, the full texts of the
adopted resolutions and other relevant materials attached with the meeting
invitations must be preserved in the head office of the company.
Article 107.- Request to cancel decisions of the
Shareholders' Meeting
Within ninety
days as from the date of receipt of the meeting minutes of the Shareholders'
Meeting or the voting result minutes in case of collecting written opinions of
shareholders, members of the Management Board or the Control Board, or the
director or general director shall be entitled
to request the court or arbitration to consider and cancel such
decisions in the following cases:
1. The order
and procedures for convening the concerned meeting of the Shareholders' Meeting
do not comply with the provisions of this Law and the company's charter;
2. The order
and procedures for issuing the decision or such decision has some content in
violation of law or the company's charter.
Article 108.- The Management Board
1. The
Management Board shall act as the management body of the company, be fully
authorized on behalf of the company to decide and exercise the rights and
perform the obligations of the company which do not fall under the competence
of the Shareholders' Meeting.
2. The
Management Board shall have the following rights and duties:
a/ To decide on
the development strategy, medium-term development plans and annual business
plans of the company;
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c/ To decide on
the sale offer of new shares within the number of shares of each type allowed
to be offered; determine the additional mobilization of capital in other forms;
d/ To set the price
of shares offered and bonds issued by the company;
e/To decide on
the share buy-backs as provided for in Clause 1, Article 91 of this Law;
f/ To make
decisions on investment plans and projects falling under its competence and
within the limit provided for by this Law or the company's charter;
g/ To make
decisions on market development, marketing and technology solutions; to approve
contracts of sale, purchase, borrowing, lending or any other contracts worth
50% or more of the total value of assets recorded in the company's latest
financial statement, or a smaller percentage provided for in the company's
charter, except contracts and transactions defined in Clause 1 and Clause 3,
Article 120 of this Law;
h/ To appoint,
remove from office, dismiss, sign or terminate contracts with the director or
general director and other key managers of the company as provided for in the
company's charter; to decide on salary and other benefits applied to such
persons; to appoint its authorized representatives to exercise the ownership
right over shares or capital contributions in other companies, to decide on
allowances and other benefits to be applied to such persons;
i/ To supervise
and direct the director or general director and other managers in managing
day-to-day business activities of the company;
j/ To decide on
the organizational structure, management rules within the company; to make
decisions on the setting up of subsidiary companies, branches, representative
offices and on the contribution of capital to or buying of shares from other
enterprises;
k/ To approve
the agenda, materials used in sessions of the Shareholders' Meeting, convene
sessions of the Shareholders' Meeting or collect written opinions for the
adoption of decisions of the Shareholders' Meeting;
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m/ To propose the amount of dividend to be paid, timing
and procedures for payment of dividend or the settlement of losses incurred
during the course of business operations;
n/ To propose
reorganization, dissolution or bankruptcy of the company;
o/ Other rights
and duties as provided for by this Law and the company's charter.
3. The
Management Board may opt to have its decisions adopted by voting at its
meetings, by collecting written opinions or other ways as provided for in the
company's charter. Each member of the Management Board shall have a single
vote.
4. When
exercising its functions and duties, the Management Board shall have to comply
with the provisions of law, the company's charter and decisions of the
Shareholders' Meeting. If decisions adopted by the Management Board are in
contravention of law or the company's charter, causing losses to the company,
the members adopting such decisions shall be jointly responsible for such decisions
and compensating the company's losses; members who oppose these decisions shall
be exempt from liabilities. In this case, every shareholder who continuously
owns shares of the company for at least one year may request the Management
Board to suspend the execution of such decision.
Article 109.- Term and number of members of the Management
Board
1. Unless otherwise provided for in the
company's charter, the Management Board shall consist of at least three members
and no more than eleven members. The number of the members of the Management
Board who must permanently reside in Vietnam shall be provided for in the
company's charter. The term of the Management Board shall be five years. The
term of members of the Management Board shall be no more than five years; and
members of the Management Board may be re-elected for unlimited number of
terms.
2. The
Management Board of the expiring term shall continue working until a new
Management Board is elected and takes over the management.
3. If a new
member is additionally elected or replaces a removed or dismissed member during
the term, the term of this new member shall be the remaining term of the
Management Board.
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Article 110.- Qualifications and conditions for acting as
members of the Management Board.
1. Members of
the Management Board must satisfy the following qualifications and conditions:
a/ Having full
civil act capacity and are not prohibited
from managing an enterprise as provided for by this Law;
b/ Being
individual shareholders who own at least 5% of total ordinary shares of the
company or others possessing expertise and experience in business management or
in major business line(s) of the company, or satisfy other criteria and conditions as provided for in the company's
charter.
2. For
subsidiary companies of which the State holds shares accounting for more than
50% of the charter capital, members of their Management Board must not be
related persons of managers of and persons who have competence to appoint
managers of their parent company.
Article 111.- Chairman of the Management Board
1. The Shareholders' Meeting or the
Management Board shall elect the chairman of the Management Board as provided
for in the company's charter. In case the
Management Board elects its chairman, the Management Board shall elect one among its members as the chairman. The chairman
of the Management Board may hold at the same time the post of director or
general director, unless otherwise provided for in the company's charter.
2. The chairman of the Management Board
shall have the following rights and duties:
a/ To develop
working programs and plans for the Management Board;
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c/ To arrange
for the adoption of decisions by the Management Board;
d/ To monitor
the implementation of decisions adopted by the Management Board;
e/ To chair sessions
of the Shareholders' Meeting;
f/ Other rights
and duties as provided for by this Law and the company's charter.
3. Where the
chairman of the Management Board is absent, another member shall be authorized
by the chairman of the Management Board to exercise the rights and duties of
the chairman according to the principles established in the company's charter.
In cases where no member is so authorized or the chairman of the Management
Board is incapable of working, other members shall elect by majority vote one
among themselves to hold the temporary chairmanship of the Management Board.
Article 112.- Meetings of the Management Board
1. If the
Management Board elects the chairman, the first meeting of the term of the
Management Board to elect the chairman and adopt other decisions under its
competence shall be conducted within seven working days after the end of the
election of the Management Board for such term. This meeting shall be convened
by the member with the highest number of votes. If more than one member have
equal and highest numbers of votes, the voting members shall elect by majority
vote one of them to convene the meeting of the Management Board.
2. The
Management Board may hold regular or irregular meetings. The Management Board
may meet at the head office of the company or elsewhere.
3. Regular
meetings of the Management Board shall be convened by the chairman at any time
necessary, however, at least once every quarter.
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a/ The Control
Board;
b/ The director
or general director or at least five other managers;
c/ At least two
members of the Management Board;
d/ Other cases
as provided for in the company's charter.
The request
must be made in writing, clearly stating the objectives, issues to be discussed
and decided under the competence of the Management Board.
5. The chairman shall convene a meeting of
the Management Board within fifteen days as from the date of receipt of the
request. If the chairman fails to do so, he/she shall be responsible for losses
incurred by the company; requesters may in replacement of the Management Board,
convene a meeting of the Management Board.
6. Unless
otherwise provided for in the company's charter, the chairman of the Management
Board or the person who convenes a meeting of the Management Board must send
invitations at least five working days before the meeting date. Such invitation
must specify the meeting time and venue, agenda, issues to be discussed and
decided. Relevant materials to be used in the meeting and voting cards shall be
attached to the invitations.
Invitations may
be sent by post, fax, email or other means, however, they shall be ensured to
reach the address of each member of the Management Board registered in the
company.
7. The chairman of the Management Board or
the person who convenes a meeting must forward invitations and relevant
materials to members of the Control Board and the director or general director
as to members of the Management Board.
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8. A meeting of the Management Board shall
be conducted if it is attended by three-quarters or more of the total number of
its members.
Members who do
not directly attend a meeting may vote in writing. Voting cards must be put in
sealed envelopes and sent to the chairman of the Management Board at least one
hour before the opening of the meeting. They may only be opened in front of all
participants in the meeting.
A decision of
the Management Board shall be adopted if it is so approved by a majority of the
participating members; where the numbers of votes for and against are equal,
decision of the chairman shall be the final one.
9. Members must participate in all
meetings of the Management Board. Members may authorize other persons to
participate meetings of the Management Board, if it is so approved by a
majority of members of the Management Board.
Article 113.- Minutes of meetings of the Management Board
1. All meetings
of the Management Board must be recorded in the minutes book. Minutes shall be
in Vietnamese and possibly in a foreign language and shall have the following
principal contents:
a/ Name,
address of the head office, number and date of grant of the business
registration certificate, place of business registration;
b/ Objectives,
agenda and contents of meetings;
c/ Time and
venue of meetings;
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e/ Issues
discussed and voted during meetings;
f/ Summary of
opinions by each participant in the order of the meeting proceedings;
g/ The voting
result, clearly stating members who vote for, against and express no idea;
h/ Adopted
decisions;
i/ Full names
and signatures of all participating members or authorized participants.
The chair and
secretary of a meeting of the Management
Board shall be liable for the truthfulness and accuracy of the minutes
of the meeting.
2. Minutes of
the Management Board meetings and materials used during such meetings shall be
kept in the head office of the company.
3. Minutes in
Vietnamese and foreign language shall be of equivalent legal validity.
Article 114.- The right of members of the Management Board
to be supplied with information
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2. A manager so
requested must provide adequate and accurate information, materials in a timely
manner as requested by members of the Management Board.
Article 115.- Removal, dismissal and supplementation of
members of the Management Board
1. A member of the Management Board shall
be removed or dismissed in the following cases:
a/ No longer
meeting criteria and conditions as provided for in Article 110 of this Law;
b/ Failing to
participate in meetings of the Management Board for six consecutive months,
except for force majeure circumstances;
c/ Having a
letter of resignation;
d/ Other cases
as provided in the company's charter.
2. Apart from the cases provided for in
Clause 1 of this Article, a member of the Management Board may be removed at any
time by a decision of the Shareholders' Meeting.
3. Where the number of members of the
Management Board is reduced by more than one-third of the number as provided
for in the company's charter, the Management Board shall convene a session of
the Shareholders' Meeting within sixty days as from the date on which the
number of members is reduced by more than one-third in order to supplement new
members.
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Article 116.- Director or general director
1. The
Management Board shall appoint one among its members or hire another person to
act as the director or general director. The director or general director shall
act as the representative-at-law of the company unless the company's charter
provides that the chairman of the Management Board shall so act.
2. The director
or general director shall manage day-to-day business operations of the company
under the supervision of the Management Board and be answerable to the
Management Board for his/her performance of assigned rights and duties.
The term of the
director or general director shall not exceed five years and may be renewed for
unlimited number.
The qualifications
and conditions of the director or general director shall be as provided for in
Article 57 of this Law.
The director or
general director of the company cannot be concurrently the director or general
director of another enterprise.
3. The director or general director shall
have the following rights and duties:
a/ To decide on
matters related to day-to-day business operations of the company, which do not
require decisions of the Management Board;
b/ To organize
the implementation of decisions adopted by the Management Board;
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d/ To propose
the organizational structure plan and the internal management regulations of
the company;
e/ To appoint,
remove or dismiss managers in the company, except those who are under the
competence of the Management Board;
f/ To decide on
salaries and allowances (if any) for employees of the company, including those
managers whose appointment falls under the competence of the director or general
director;
g/ To recruit
laborers;
h/ To propose
plans to pay dividends or deal with business losses;
i/ Other rights
and duties as provided for by this Law, the company's charter and decisions of
the Management Board.
4. The director or general director must
manage day-to-day business operations of the company in accordance with the
provisions of law, the company's charter, the labor contract signed with the
company and decisions of the Management Board. If the management violates these
regulations causing damage to the company, the director or general director
shall be responsible before law and pay compensation for such damage.
Article 117.- Remuneration, salary and other benefits of
members of the Management Board, director or general director
1. The company shall be entitled to pay the
remuneration, salaries of the members of the Management Board, director or
general director and other managers according to the results and profits of the
business.
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a/ Members of
the Management Board shall receive remuneration and bonuses. The remuneration
is calculated based on the number of working days needed to complete the tasks
of members of the Management Board and the daily remuneration. The Management
Board estimates the remuneration for each member on the principle of consensus.
The total remuneration of the Management Board shall be determined by the
Shareholders' Meeting in its annual meetings;
b/ Members of
the Management Board can be reimbursed all expenses such as meals and
accommodation, travel expenses and other reasonable expenses that they have
paid to fulfill their assigned tasks;
c/ The director
or general director shall receive salary and bonuses. The salary of the
director or general director shall be determined by the Management Board.
3. Remuneration
of the Management Board members and salaries of the director or general
director or other managers of the company shall be accounted as business
expenses of the company according to the provisions of law on enterprise income
tax and must be presented in a separate section of the company's annual
financial statements and reported to the Shareholders' Meeting at its annual
meetings.
Article 118.- Disclosure of related benefits
1. Members of the Management Board, the
director or general director and other managers of the company must declare all
their related benefits with the company, including:
a/ Name, head
office address, business lines, number and date of grant of the business
registration certificate, place of business registration of the enterprise in
which they have capital contribution or shares; proportion and time of holding
such capital contribution or shares;
b/ Name, head
office address, business lines, number and date of grant of the business
registration certificate, place of business registration of the enterprise in
which their related people individually or
jointly hold capital contribution or shares greater than 35% of the
charter capital.
2. Declarations
mentioned in Clause 1 of this Article shall be made within seven working days
as from the date of arising of related benefits; all changes and supplements, if any, must be declared with the
company within seven working days as from the date of making of such changes or
Supplements.
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4. Members of
the Management Board, the director or general director who, on their personal
behalf or on behalf of others, do any work in any form within the scope of the
business operations of the company shall have to explain the nature and
contents of such work to the Management Board and the Control Board and can
only do this work with the approval of the majority of the remaining members of
the Management Board. If such work is performed without declaration to or
approval of the Management Board, all incomes generating there from shall
belong to the company.
Article 119.- Obligations of managers
1. The Management
Board members, the director or general director and any other managers of a
company shall have the following obligations:
a/ To exercise
rights and perform duties assigned in accordance with the provisions of this
Law, other relevant laws, the company's charter and decisions of the
Shareholders' Meeting;
b/ To exercise
assigned rights and duties in an honest, careful and optimal manner to ensure
the maximum legitimate interests of the company and its shareholders;
c/ To be loyal
to the company's benefits and shareholders; not to use business information,
know-how and opportunities; not to abuse their position, power and use the
company's assets for benefits of his/her own or of any other organizations or
individuals;
d/ To inform
promptly, sufficiently and exactly the company of enterprises owned by
themselves or their related persons or enterprises in which they or their
related persons have capital contributions or controlling shares. This notice
shall be posted at the head office and branches of the company.
2. Apart from
the obligations defined in Clause 1 of this Article, the Management Board or
the director or general director shall not be allowed to increase salaries and
pay bonuses when the company fails to pay off due debts.
3. Other obligations
as provided for by this Law and the company's charter.
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1. Contracts and transactions between the
company and the following entities must be approved by the Shareholders'
Meeting or the Management Board:
a/
Shareholders, authorized representatives of shareholders that own more than 35%
of total ordinary shares of the company and their related persons;
b/ Members of
the Management Board, the director or general director;
c/ Enterprises
specified at Point a and Point b, Clause 1, Article 118 of this Law and other
related persons of the members of the Management Board, the director or general
director.
2. Contracts and transactions valued at
under 50% of the total value of the company's assets in the latest financial
statement or another smaller percentage as provided for in the company's
charter shall be approved by the Management Board. In this case, the
representative-at-law of the company shall send draft contracts or inform the
principal contents of the intended transactions to all members of the
Management Board or post them at the head office and branches of the company.
The Management Board shall decide on approval of such contracts or transactions
within fifteen days as from the date of posting. Members, who have benefits
related to such contracts or transactions shall not have right to vote.
3. Other
contracts and transactions except those mentioned in Clause 2 of this Article
shall be approved by the Shareholders' Meeting. The Management Board shall
submit draft contracts or explain the principal contents of the intended
transactions at meetings of the Shareholders' Meeting or to collect written
opinions of shareholders. In this case, shareholders related to such contracts
or transactions shall not have the right to vote and the contracts or
transactions shall be approved when shareholders representing 65% of total
votes approve.
4. If contracts
are signed or transactions are conducted without the approval as provided for
in Clause 2 and Clause 3 of this Article,
such contracts or transactions shall be invalid and handled according to
the provisions of law. The representative-at-law of the company, shareholders,
members of the Management Board or the director or general director related to
such contracts or transactions shall have to compensate for any incurred losses
and return to the company all benefits from the performance of such contracts
or transactions.
Article 121.- The Control Board
1. Unless
otherwise provided for in the company's charter, the Control Board consist of three to five members; the term of the Control
Board shall be no more than five years; and the members of the Control
Board may be re-elected with unlimited number of terms.
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3. At the end
of the term and if the Control Board of a new term has not been elected, the
former Control Board shall continue exercising rights and performing tasks
until the new Control Board is elected and takes over its tasks.
Article 122.- Criteria and conditions for members of the
Control Board
1. Members of the Control Board must
satisfy the following criteria and conditions:
a/ Being 21
years old or older, having full civil act capacity and not being prohibited
from establishing and managing an enterprise as provided for by this Law;
b/ Not being
wives or husbands, fathers, adoptive fathers, mothers, adoptive mothers,
children, adopted children and blood siblings of the members of the Management
Board, the director or general director and other managers of the company.
2. Members of the Control Board shall not
hold any managerial position in the company. Members of the Control Board are
not necessarily shareholders or employees of the company.
Article 123.- Rights and duties of the Control Board
1. To supervise
the management and direction of the company
by the Management Board and the director or general director; to be
responsible to the Shareholders' Meeting for the performance of its assigned
tasks.
2. To
verify the reasonability, legality, truthfulness and carefulness of
business management and direction, accounting and statistical work, and making
of financial statements.
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To submit to
the regular meetings of the Shareholders' Meeting the appraisal reports on
annual financial statements and business reports of the company and the
evaluation reports on the management of the Management Board.
4. To check
accounting books and other materials of the company and the management and
direction of the company's activities at any time if necessary or under a
decision of the Shareholders' Meeting or at the request of individual
shareholders or group of shareholders in accordance with the provisions of
Clause 2, Article 79 of this Law.
5. If there is
a request from individual shareholders or a group of shareholders provided for
in Clause 2, Article 79 of this Law, the Control Board shall investigate within
seven working days from the date of receipt thereof. Within seven working days
from the date of completion of the investigation, the Control Board shall make
an explanation report on investigated issues and send it to the Management
Board, the requesting shareholder or group of shareholders.
The
investigation by the Control Board provided for in this Clause must neither
obstruct the normal operations of the Management Board nor disrupt the
management of business operations of the company.
6. To propose to the Management Board or
the Shareholders' Meeting measures to adjust and improve organizational and
business management structures of the
company.
7. When members
of the Management Board, the director or general director are discovered to
have violated the obligations of company managers provided for in Article 119
of this Law, to promptly send a written notice to the Management Board
requesting the termination of such violations and the remedy of consequences.
8. To exercise
other rights and perform other duties in accordance with the provisions of this
Law, the company's charter and decisions of the Shareholders' Meeting.
9. The Control
Board may use independent consultants to perform assigned duties.
The Control
Board may consult the Management Board before submitting reports, conclusions
and recommendations to the Shareholders' Meeting.
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1. Meeting
invitations or opinion cards of members of the Management Board and other relevant materials enclosed thereto shall be sent
to members of the Control Board at
the same time and in the same way as to members of the Management Board.
2. Reports made
by the director or general director and
submitted to the Management Board and
other relevant materials issued by the company shall be sent to members of the Control Board at the same time and in
the same way as applied to members of
the Management Board.
3. Members
of the Control Board shall have the right to get access to all files and
documents of the company which are kept at the head office, branches of the company and other locations and
shall have the right to come to all locations where managers and employees of the company work.
4. The Management Board and its members, the director or general director and other
managers must provide fully and in time information and documents on management work and business
operations of the company at the request of the Control Board.
Article 125.- Remuneration and other benefits for members of the Control Board
Unless otherwise provided for in the company's charter,
remuneration and other benefits for members of the Control Board shall be paid according to the following provisions:
1. Members of the Control Board shall receive remuneration
based the work done and other benefits as
decided by the Shareholders' Meeting. The
Shareholders' Meeting shall decide on the total remuneration and the annual operation budget for the Control Board based on the estimated number of working days, volume and nature of work and
the average daily remuneration of members.
2. Members of the Control Board shall be paid for meals, accommodation, travel expenses and fees
for hiring independent consultancy services at a reasonable level. The total remuneration and expenses shall not exceed the total annual budget
for operations of the Control Board
approved by the Shareholders' Meeting, unless otherwise decided by the Shareholders' Meeting.
3. Remuneration and operations expenses of the Control Board shall be accounted as business expenses
of the company according to the provisions
of law on enterprise income tax and other relevant laws, and shall be presented in a separate section of the company's annual financial
statement.
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1. To comply with the laws, the company's charter, decisions of the Shareholders' Meeting
and professional ethics in exercising assigned rights and tasks.
2. To exercise
assigned rights and duties in an honest, careful and optimal manner in order to
ensure the maximum legitimate benefits of the company and its shareholders.
3. To be loyal
to the benefits of the company and shareholders; not to use business
information, know-how and opportunities of the company; not to abuse their
position and power and use the company's assets for their own benefits or for
benefits of other organizations or individuals.
4. Other
obligations as provided for by this Law and the company's charter.
5. If violating
obligations defined in Clauses 1, 2, 3 and 4 of this Article causing losses to
the company or others, the members of the Control Board shall be individually
or jointly responsible for compensating such losses.
Every income
and other benefits gained directly or indirectly by members of the Control
Board from violating the obligation specified in Clause 3 of this Article shall
belong to the company.
6. In cases where the violation of members
of the Control Board in the exercise of
assigned rights and tasks is discovered, the Management Board shall
notify such in writing to the Control Board, requiring the violators to stop
their violation and remedy consequences.
Article 127.- Removal and dismissal of members of the
Control Board
1. Members of
the Control Board may be removed or dismissed in following cases:
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b/ Failing to exercise
their rights and tasks for six consecutive months, except force majeure
circumstances;
c/ Submitting a
letter of resignation;
d/ Other cases
as provided for in the company's charter.
2. Apart from the cases specified in
Clause 1 of this Article, members of the Control Board may be dismissed at any
time as decided by the Shareholders' Meeting.
3. If the Control Board seriously violates
its obligations, which probably cause losses to the company, the Management
Board shall convene the Shareholders' Meeting to consider and dismiss the
existing Control Board and elect a replacing one.
Article 128.- Submission of annual statements and reports
1. By the end of a fiscal year, the
Management Board shall prepare the following reports and materials:
a/ Report on
the business operation of the company;
b/ Financial
statements;
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2. Annual financial statements of a
joint-stock company, if required by law to be audited, must be audited before
they are submitted to the Shareholders' Meeting for consideration and approval.
3. Unless
otherwise provided for in the company's charter, reports and documents provided
for in Clause 1 of this Article must be sent to the Control Board at least
thirty days before the opening of the regular meetings of the Shareholders'
Meeting.
4. Unless
otherwise provided for in the company's charter, reports and documents prepared
by the Management Board together with the appraisal reports of the Control
Board and the auditing reports must be available at the head office of the
company and its branches at least seven working days before the opening of the
regular meetings of the Shareholders' Meeting.
All
shareholders who hold shares of the company for at least one year shall have
the right to review the reports and statements mentioned in this Article at a
appropriate time by themselves or with their lawyers, or certified auditors or
accountants.
Article 129.- Disclosure of information on joint-stock
companies
1. Joint-stock companies shall forward
their annual financial statements already approved by the Shareholders' Meeting
to competent state agencies according to the provisions of law on accounting
and other relevant laws.
2. A brief of
the annual financial statement shall be notified to all shareholders.
3. All
individuals or organizations shall be entitled to have access to or make copies
of the annual financial statements of a joint-stock company at the competent
business registration office.
Chapter V
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Article 130.- Partnerships
1. A
partnership is an enterprise in which:
a/ There are at
least two partners who are co-owners of the company, jointly conduct business
under one common name (hereinafter referred to as partners); in addition to
general partners, there may also be limited partners;
b/ General
partners to a partnership must be individuals who are liable for all
obligations of the partnership with his/her own entire property;
c/ Limited partners
shall be liable for debts of the partnership only to the extent of their
capital contribution to the partnership.
2. A
partnership shall have the legal person status from the date of receipt of the
business registration certificate.
3. A partnership
must not issue any type of securities.
Article 131.- Capital contribution and grant of capital
share certificates
1. General
partners and limited partners shall have to make capital contribution in full
and on time as committed.
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3. If a limited
partner fails to contribute capital in full and on time as committed, the
deficit amount shall be regarded as a debt of such partner to the company; in
this case, such limited partner may be expelled from the company as decided by
the Partners' Council.
4. At the time
of making full capital contribution as committed, partners shall be granted a
capital share certificate. A capital share certificate shall have the following
principal contents:
a/ Name,
address of the head office of the partnership;
b/ Number and
date of grant of the business registration certificate;
c/ Charter capital
of the partnership;
d/ Name,
permanent address, nationality, number of the people's identity card, passport
or other legal personal certification of the partner and type of partner;
e/ Value of
contributed capital amount and type of assets used as contributed capital of
partners;
f/ Number and
date of grant of the capital share certificate;
g/ Rights and
obligations of the owner of the capital share certificate;
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5. If the capital share certificate is lost,
torn, burnt or otherwise destroyed, partners shall be granted a new one
by the partnership.
Article 132.- Assets of a partnership
1. Assets used as capital contributions by
partners, the ownership of which has been
transferred to the partnership.
2. Assets
created under the partnership's name.
3. Assets
acquired from any business operations performed by general partners on behalf
of the partnership or from any business operations within the registered
business lines of the partnership which are conducted by general partners on
their own behalf.
4. Other assets
as provided for by law.
Article 133.- Restrictions on rights of general partners
1. General partners cannot be owner of a private
enterprise or general partners of other partnerships Unless it is so
agreed by the remaining general partners.
2. General partners
cannot conduct the same business lines of the partnership whether on their
behalf or others' behalf for their own benefits or benefits of other
organizations or individuals.
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Article 134.- Rights and obligations of general partners
1. General
partners shall have the following rights:
a/ To
participate in meetings, discuss and vote all issues in the partnership; each
general partner has one vote unless otherwise provided for in the partnership's
charter;
b/ On behalf of
the partnership, to conduct business operations within the registered business
lines of the partnership; negotiate and enter into contracts, agreements or
accords with terms deemed to be the most beneficial to the partnership;
c/ To use the
partnership's seal and property to conduct business operations within the
registered business lines of the partnership; if money is advanced by a partner
to conduct the partnership's business, he/she can request the partnership to
return the principal of the advanced money and its interest calculated at the
market interest rate;
d/ To request
the partnership to cover losses from conducting business operations within its
powers if such losses were incurred not due to partners' mistakes;
e/ To request the partnership or any other general
partners to provide information on the partnership's business
operations; inventory assets, check accounting books and other documents of the
partnership at any time if necessary;
f/ To receive
profit sharing pro rata with the proportion of the capital contribution or as
agreed in the partnership's charter;
g/ To receive a
portion of the remaining assets pro rata with the proportion of the capital
contribution, unless another ratio is provided for in the partnership's charter
when the partnership dissolves or goes bankrupt;
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i/ Other rights
as provided for by this Law and the partnership's charter.
2. General
partners shall have the following obligations:
a/ To manage
and carry out business operations in an honest, careful and optimal manner to
ensure the maximum lawful benefits of the partnership and all partners;
b/ To manage
and supervise business operations of the partnership in accordance with the
provisions of law, the partnership's charter and decisions of the Partners'
Council; if violating the provisions of this Point, causing losses to the
partnership, to be responsible for compensating the partnership for such
losses;
c/ Not to use
the partnership's assets for their own benefits or benefits of other
organizations or individuals;
d/ If a general
partner receives money or property by using the partnership's name or on his/
her behalf or another person's behalf or receives money or property from
business activities within the partnership's registered business lines and does
not return to the partnership, he/she shall have to return the money or
property received;
e/ To be
jointly responsible for paying off all remaining debts of the partnership if
the property of the partnership is not enough for paying off all the
partnership's debts;
f/ If the
partnership makes business losses, to incur losses pro rata to their capital
contribution to the partnership as agreed upon in the partnership's charter;
g/ To make
monthly truthful and accurate reports to the partnership on their business
progress and results and provide information on their business progress and
results to partners who have a request;
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Article 135.- Partners' Council
1. All partners
shall form the Partners' Council. The Partners' Council shall elect one general
partner to be its chairman who shall concurrently be the director or general director,
unless otherwise provided in the partnership's charter.
2. All general
partners shall be entitled to convene meetings of the Partners' Council to
discuss and decide on business activities of the partnership. Partners who
convene a meeting must prepare the content, agenda and materials for the
meeting.
3. The
Partners' Council shall be entitled to decide on all business issues of the
partnership. Unless otherwise provided for in the partnership's charter,
decisions on the following issues shall be approved by at least three-quarters
of the total number of general partners:
a/ The
partnership's development orientations;
b/ Amendments
and supplements to the partnership's charter;
c/ Admission of
new general partners;
d/ Acceptance
of the withdrawal of general partners from the partnership and decision on the
exclusion of members from the partnership;
e/ Decision on
investment projects;
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g/ Decision on
purchase, sale of assets valued at equal to or higher than the partnership's
charter capital, unless otherwise provided for in the partnership's charter;
h/ Decision on
approval of annual financial statements and total profits allowed to be divided
and profits divided to each partner;
i/ Decision on
the partnership's dissolution.
4. Decisions on
issues not specified in Clause 3 of this Article shall be approved if they are
accepted by at least two-thirds of general partners; a specific ratio shall be
provided for in the partnership's charter.
5. The right of
limited members to vote shall be provided for in the partnership's charter.
Article 136.- Convention of meetings of the Partners'
Council
1. The chairman
of the Partners' Council may convene a meeting of the Partners' Council at any
time if necessary or at the request of general partners. If the chairman fails to convene a meeting at the
request of general partners, the requesting partners shall convene the meeting.
2. Invitation
to a meeting may be in writing, by telephone, fax, telex or other electronic
equipment. An invitation must specify the purpose, requirements, content,
agenda and venue of the meeting and the name of the partner requesting
convention of the meeting.
Documents used
for deciding on issues as provided for in Clause 3, Article 135 of this Law
should be sent in advance to all partners. The time limit for sending such
documents shall be specified in the partnership's charter.
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a/ Name,
address of the head office of the partnership, number and date of grant of the
business registration certificate, place of business registration;
b/ Purpose,
content and agenda of the meeting;
c/ Time and
place of the meeting;
d/ Full names
of the chair and participating partners;
e/ Opinions
expressed by participating partners;
f/ Adopted
decisions, number of partners who approve and the principal contents of such
decisions;
g/ Full names
and signatures of all participating partners.
Article 137.- Business management of a partnership
1. All general partners shall have the
right to be representatives-at-law and manage and conduct daily business
activities of the partnership. Any restriction on general partners in
conducting daily business activities of the partnership shall only have effect
to a third party if this party is informed of such restriction.
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When some or
all general partners jointly conduct several business activities, decisions
shall be made on the principle of majority.
Any activity
which is conducted by any general partner outside business operations within
the scope of the partnership's registered business lines shall not fall within
the responsibilities of the partnership unless such operations are accepted by
the remaining partners.
3. The
partnership may open one or several bank accounts. The Partners' Council shall
authorize one partner to deposit and withdraw money from these accounts.
4. The chairman
of the Partners' Council, the director or general director shall have the
following duties:
a/ To manage and
direct day-to-day business operations of the partnership as a general partner;
b/ To convene
and conduct meetings of the Partners' Council; sign decisions or resolutions of
the Partners' Council;
c/ To assign
and coordinate business operations among general partners; sign decisions on
regulations, rules and other internal organizational issues of the partnership;
d/ To arrange,
keep complete and truthful accounting books, invoices and vouchers and other documents
of the partnership according to the provisions of law;
e/ To represent
the partnership in relations with state agencies; represent the partnership as
a plaintiff or a defendant in lawsuits or commercial or other disputes;
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Article 138.- Termination of general partner status
1. A general
partner status shall be terminated in one of the following cases:
a/ Voluntary
capital withdrawal from the partnership;
b/ He/she is
dead or declared dead by the court;
c/ He/she is
declared missing by the court or his/her civil act capacity is restricted or
lost;
d/ He/she is
expelled from the partnership;
e/ Other cases
as provided for in the partnership's charter.
2. General
partners may withdraw capital from the partnership if approved by the Partners'
Council. In this case, partners who want to withdraw capital from the
partnership shall notify in writing the capital withdrawal request at least six
months before the date of capital withdrawal. Capital shall only be allowed to
be withdrawn at the end of a fiscal year and the financial statement of such
fiscal year has been approved.
3. General
partners shall be expelled from the partnership in the following cases:
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b/ They violate
the provisions of Article 133 of this Law;
c/ They fail to
conduct business activities in an honest and careful manner, or have
inappropriate behaviors causing serious losses to the partnership's and others
partners' benefits;
d/ They fail to
perform properly obligations of general partners.
4. In case of termination of the partner
status of a partner whose civil act capacity is restricted or lost; the capital
contribution of such partner shall be returned fairly and properly.
5. Within two
years as from the date of terminating the general partner status as provided
for at Point a and Point d, Clause 1 of this Article, such partners shall still
be jointly responsible for the partnership's debts by their entire property
which arose before such date.
6. After the
termination of the general partner status, if the name of such partner has been
used as part or the whole of the name of the partnership, such partner may
request the partnership to stop that use.
Article 139.- Admission of new partners
1. A
partnership may admit new general or limited partners; admission of new
partners of a partnership shall be subject to approval of the Partners' Council.
2. A new
general partner or limited partner shall make full capital contribution to the
partnership within fifteen days from the date of admission, unless another time limit is decided by the
Partners' Council.
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Article 140.- Rights and obligations of limited partners
1. Limited
partners shall have the following rights:
a/ To
participate in meetings, discuss and vote in the Partners' Council on
amendments and supplements to the partnership's charter, amendments and
supplements to rights and obligations of limited partners, re-organization and
dissolution of the partnership, and other contents of the partnership's charter
that are directly related to their rights and obligations;
b/ To receive
annual profits sharing pro rata the proportion of capital contribution in the
partnership's charter capital;
c/ To be
provided with annual financial statements of the partnership; request the
chairman of the Partners' Council, general partners to provide fully and
truthfully information on the business operations and results of the
partnership; review accounting books, minutes book, contracts, transaction
documents, files and other documents of the partnership;
d/ To transfer
their capital contributions in the partnership to others;
e/To conduct the
same registered business lines of the partnership on their behalf or others'
behalf;
f/ To dispose
of their capital contribution by bequeathing, giving, presenting, mortgaging,
pledging and other activities as provided for by law and the partnership's charter;
if a partner is dead or declared dead by the court, the heir replacing the
deceased partner shall become the limited partner of the partnership;
g/ To receive
part of the remaining assets pro rata to the proportion of capital contribution
in the partnership's charter capital when the partnership is dissolved or goes
bankrupt;
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2. Limited
partners shall have the following obligations:
a/ To be
responsible for all debts and other property liabilities of the partnership
within their committed capital contribution proportions;
b/ Not to
manage the partnership or conduct business activities on behalf of the
partnership;
c/ To comply
with the partnership's charter and rules and decisions of the Partners'
Council;
d/ Other
obligations as provided for by this Law and the partnership's charter.
PRIVATE ENTERPRISES
Article 141.- Private enterprises
1. A private
enterprise is an enterprise owned by an individual who is liable for all of its
operations with his/her entire property.
2. Private
enterprises shall not be allowed to issue any type of securities.
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Article 142.- Investment capital of enterprise owners
1. The investment
capital of the owner of a private enterprise shall be registered by the owner
himself/herself. The owner shall be obliged to register exactly the total
amount of investment capital, in which the amounts in Vietnam dong, in freely
convertible foreign currency, of gold and other assets shall be specified; for
capital in other assets, the type, quantity and residual value of such assets
must be clearly stated.
2. All capital
and assets including borrowed capital and leased property, once used for business
operations of the enterprise, must be fully reflected in accounting books and
financial statements of the enterprise as provided for by law.
3. In the
course of business, the owner of a private enterprise may increase or reduce
his/her investment capital in business operations of the enterprise, which
shall be reflected in accounting books. Where the remaining capital after
reduction is lower than the registered investment capital, the owner may do so
only after registering such reduction with the business registration office.
Article 143.- Management of private enterprises
1. The owner of
a private enterprise has the full decision-making power on any business
operation of the enterprise, the use of its profits after payment of taxes and
fulfillment of other financial obligations according to the provisions of law.
2. The owner of
a private enterprise may directly manage and run business operations of the
enterprise or employ another person to do so. Where
the latter is the case, the owner must register it with the business
registration office while still taking full responsibility for all business
operations of the enterprise.
3. The owner of
a private enterprise shall act as plaintiff, defendant or person with related
interests and obligations before arbitration tribunals or courts in all
disputes related to the enterprise.
4. The owner
shall act as the representative-at-law of the enterprise.
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The owner of a private
enterprise may lease his/ her entire enterprise, provided he/she shall report
in writing thereon to the business registration office and the tax agency and
such report shall be enclosed with a notarized copy of the leasing contract.
During the lease term, the owner of such private enterprise shall remain liable
before law in the capacity as its owner.
Rights and responsibilities of the owner and the lessee with respect to
business operations of the enterprise shall be defined in the leasing contract.
Article 145.- Sale of private enterprises
1. The owner of
a private enterprise may sell his/her enterprise to another person. At least
fifteen days before the date of transfer of the enterprise, the owner shall
notify in writing the business registration office of the transfer. The notice
shall specify the name and head office of the sold enterprise; name and address
of the buyer; total amount of outstanding debts of the enterprise; name,
address, and the amount of debt of each creditor, the date of payment to each
creditor; labor contract and other contracts that have been concluded but not
yet completed and methods of settlement of such contracts.
2. The owner,
after selling his/her enterprise, shall still be liable for all debts and other
property liabilities of the enterprise that have not been paid off, unless otherwise agreed by the buyer, the
seller, and the creditors.
3. The seller
and the buyer of a private enterprise must observe the provisions of law on
labor.
4. The buyer of
a private enterprise must reregister the business according to the provisions
of this Law.
GROUP
OF COMPANIES
Article 146.- Group of companies
1. Group of
companies is a combination of companies which have long-term interrelations in terms of economic benefits, technology, market
and other business services.
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a/ Parent
company - subsidiary company;
b/ Economic
conglomerate;
c/ Other forms.
Article 147.- Rights and responsibilities of the parent
company with respect to its subsidiary companies
1. Depending on
the legal form of a subsidiary company, the parent company shall exercise
rights and perform obligations as a member, an owner or a shareholder in the
relation with the subsidiary company according to relevant provisions of this
Law and other laws.
2. Except the case mentioned in Clause 1
of this Article, all contracts, transactions and other relationships between
the parent company and its subsidiary companies must be established and
performed independently and equally under conditions applied to independent
legal entities.
3. In case the
parent company interferes beyond its competence as the owner, member or
shareholder, or forces the subsidiary companies to carry out business
activities that run counter with normal business practices or to conduct
unprofitable activities without proper compensation in the fiscal year, causing
losses to the subsidiary companies, the parent company must be liable for such
losses.
4. Managers of
the parent company who are responsible for making interferences or forcing the
subsidiary companies to conduct business activities defined in Clause 3 of this
Article shall be jointly liable with the parent company for such losses.
5. If the
parent company refuses to make compensation to its subsidiary companies as
provided for in Clauses 3 of this Article, the creditors, members or
shareholders who hold at least 1% of the company's charter capital may, on
behalf of themselves or the subsidiary companies, request the parent company to
compensate for any losses caused to the subsidiary companies.
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Article 148.- Financial statements of the parent company and
its subsidiary companies
1. By the end of a fiscal year, apart from
reports and materials as required by law, a parent company must also make the
following reports:
a/ Consolidated
financial statement of the group of companies as provided for by the law on
accounting;
b/ General
report on annual business results of the group of companies;
c/ General
report on the management and direction of the group of companies.
2. Those who
are responsible for making reports defined in Clause 1 of this Article shall not
make or submit such reports if they do not receive all financial statements
from all subsidiary companies.
3. At the
request of the representative-at-taw of the parent company, the
representatives-at-law of its subsidiary companies must provide necessary
reports, documents and information as prescribed for making the consolidated
financial statement and general report for the group of companies.
4. If being
unaware of or having no doubt that there is untrue, inaccurate or fake
information in the reports made and submitted by subsidiary companies, the
manager of the parent company may use these reports to make the consolidated
financial statement and general report for the group of companies.
5. If the manager of the parent company has
taken all necessary measures within his/her power but still receive no
necessary reports, materials and information as prescribed from subsidiary
companies, he/she shall still make and submit the consolidated financial
statement and general report of the group of companies. Such reports may or may
not contain information from such subsidiaries but must include necessary
explanations to avoid misunderstanding or misleading.
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7. For
subsidiary companies, apart from reports, statements and materials as provided
by law, they shall have to make and submit a general report on purchases, sales
and other transactions to the parent company.
Article 149.- Economic conglomerates
Economic
conglomerate is a large group of companies. The Government shall stipulate and
guide the criteria, organization, management and operation of economic
conglomerates.
REORGANIZATION,
DISSOLUTION AND BANKRUPTCY OF ENTERPRISES
Article 150.- Division of enterprises
1. Limited
liability companies and joint-stock companies may be divided into several
companies of the same type.
2. Division of
a limited liability company or a joint-stock company shall be conducted
according to the following procedures:
a/ The Members'
Council, the company owner or the Shareholders' Meeting of the to-be-divided
company adopts a decision on the division of the company in accordance with the
provisions of this Law and the company's charter. Such a decision shall contain
the following principal contents: name, address of the head office of the
divided company; number of companies formed as a result of such division;
principles and procedures for the division of assets of the company; the plan
on labor use; the time limit and procedures for the distribution of capital
contribution, shares and bonds of the divided company to newly formed ones;
principles for the settlement of obligations of the divided company; and
duration of such division. Within fifteen days as from the date of its
adoption, the company division decision shall be sent to all creditors and
notified to employees of the divided company;
b/ Members,
owners or shareholders of the newly formed companies adopt the charter thereof,
elect or appoint the chairman of the Members' Council, the president of the
company, the Management Board, the director or general director, and proceed
with business registration as provided by this Law. In this case, the business
registration dossier shall be accompanied by the company division decision as
provided for at Point a of this Clause.
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Article 151.- Separation of enterprises
1. A limited
liability company or a joint-stock company may be separated by transferring a
portion of the assets of the existing company (hereinafter called the separated
company) for forming one or several new companies of the same type (hereinafter
called the separating company(ies)); and transferring a proportion of rights
and obligations of the separated company to the separating company(ies) without
terminating the existence of the separated company.
2. Separation
of a limited liability or a joint-stock company shall be conducted according to
the following procedures:
a/ The Members'
Council, the company owner or the Shareholders' Meeting of the to-be-separated
company adopts a decision on the separation of the company in accordance with
the provisions of this Law and the company's charter. Such a decision shall
contain the following principal contents: name, address of the head office of
the separated company; name the company formed as a result of such separation;
the plan on labor use; asset value, rights and obligations to be transferred
from the separated company to the separating companies; and duration of such
separation. Within fifteen days as from the date of its adoption, the company
separation decision shall be sent to all creditors and notified to employees.
b/ Members, the
owner or shareholders of the separating company adopt the charter thereof,
elect or appoint the chairman of the Members' Council, the president of the
company, the Management Board, the director or general director, and proceed with
business registration as provided by this Law. In this case, the business
registration dossier shall be accompanied by the company separation decision as
provided for at Point a of this Clause.
3. After the
completion of business registration, the separated and separating companies
shall jointly be liable for outstanding debts, labor contracts, and/or other
property liabilities of the separated company, unless otherwise agreed upon by
the separated company, separating companies, creditors, customers and employees
of the separated company.
Article 152.- Consolidation of enterprises
1. Two or more
companies of the same type (hereinafter called the consolidated companies) may
be consolidated to form a new company (hereinafter called the consolidating
company) by transferring all legal assets, rights, obligations and interests to
the consolidating company simultaneously with the termination of the existence
of the consolidated companies.
2.
Consolidation of companies shall be conducted according to the following
procedures:
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b/ Members,
company owners, or shareholders of the consolidated companies shall adopt the
consolidation contract, the charter of the consolidating company, elect or appoint
the chairman of the Members' Council, the president of the company, the
Management Board, the director or general director of the consolidating
company; proceed with business registration of the consolidating company as
provided for by this Law. In this case, the business registration dossier must
be accompanied by the consolidation contract. The consolidation contract must
be sent to all creditors and notified to employees within fifteen days from the
dale of its adoption;
3. If the
consolidating company shall have a market share of between 30% and 50% in the
relevant market, the representatives-at-law of the consolidated companies shall
report to the competition management agency before the consolidation, unless
otherwise provided by the law on competition.
Consolidations
resulting in consolidating companies having a market share of more than 50% in
the relevant market shall be prohibited, unless otherwise provided by the law
on competition.
4. After the
completion of business registration of the consolidating company, the
consolidated companies shall cease to exist. The consolidating company shall
enjoy the legal rights and interests, and be liable for the outstanding debts,
labor contracts, and/or other property liabilities of such consolidated companies.
Article 153.- Merger of
enterprises
1. One or more
companies of the same type (hereinafter called the merged company(ies)) may be
merged into another company (hereinafter called the merging company) by transferring
all legal assets, rights, obligations and interests to the merging company
simultaneously with the termination of the existence of the merged company.
2. Merger shall
be conducted according to the following procedures:
a/ Related
companies prepare a merger contract and a draft of the charter of the merging
company. A merger contract shall include the following principal contents: name
and head office of the merging company; name(s) and head office(s) of the
merged company(ies); procedures and conditions for the merger; plan on labor
use; duration, procedures and conditions for the conversion of assets, capital
contribution, shares and bonds of the merged company(ies) into those of the
merging company; and duration of such merger;
b/ Members, company
owners, or shareholders of related companies shall adopt the merger contract,
the charter of the merging company, and proceed with business registration of
the merging company as provided for by this Law. In this case, the business
registration dossier shall be accompanied by the merger contract. The merger
contract must be sent to all creditors and notified to employees within fifteen
days from the date of its adoption;
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3. If the
merging company shall have the market share of between 30% and 50% in the
relevant market, the representative-at-law of the company shall report to the
competition management agency before the merger, unless otherwise provided by
the law on competition.
Mergers
resulting in merging companies having a market share of more than 50% in
relevant market shall be prohibited, unless otherwise provided by the law on
competition.
Article 154.- Transformation of enterprises
A limited
liability company may be transformed into a joint-stock company or vice versa.
Such transformation of a limited liability company or a joint-stock company
(hereinafter referred to as the transformed company) into a joint-stock
company, or a limited liability (hereinafter referred to as the transforming
company) shall be made in accordance with the following provisions:
1. The Members'
Council, the company owner, or the Shareholders' Meeting shall adopt the
decision on the transformation and the charter of the transforming company. A
transformation decision shall consist of the following principal contents: name
and address of the head office of the transformed company; name and address of
the head office of the transforming company; duration and conditions for the
transfer of assets and conversion of capital contribution, shares, and bonds of
the transformed company into those of the transforming company; plan on labor
use; and duration of such transformation.
2. The
transformation decision must be sent to all creditors and notified to employees
within fifteen days from the date of its adoption.
3. The
transforming company shall be registered in accordance with the provisions of
this Law. In this case, the business registration dossier shall be accompanied
by the transformation decision.
After the
completion of business registration, the transformed company shall cease to be
exist. The transforming company shall enjoy legal rights and interests, and be
liable for the outstanding debts, labor contracts, and/or other property
liabilities of the transformed company.
Article 155.- Transformation of one-member limited liability
companies
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2. Where the
owner of a one-member limited liability company transfers the whole of the
company's charter capital to an individual, the transferee shall, within
fifteen days as from the date of completion of transfer procedures, register
the change in the company's owner and organize the management and operation of
the company in accordance with the provisions on one-member limited liability
company with its owner being an individual.
Article 156.- Business
suspension
1. An
enterprise has the right to suspend its business after sending a written notice
to the business registration office and tax agency on the date it suspends its
business and the duration of suspension no later than fifteen days before the
date of suspension or restart of its business.
2. The business
registration office, the competent state agency shall be entitled to ask the
enterprise to suspend its conditional business lines if they discover that the
enterprise does not meet all the conditions required by law.
3. During the
period of suspension of its business, the enterprise shall have to pay in full
the outstanding tax amounts, continue to pay other debts, fulfill the contracts
signed with consumers and laborers, unless otherwise agreed upon by the
creditors, consumers and laborers.
Article 157.- Cases of and conditions for dissolution of
enterprises
1. An
enterprise shall be dissolved in the following cases:
a/ The
operation duration stated in the company's charter expires without any decision
to renew;
b/ A decision
made by the enterprise owner, for private enterprises; by all general partners,
for partnerships; by the Members' Council or the company owner, for limited
liability companies, or by the Shareholders' Meeting, for joint-stock
companies;
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d/ The business
registration certificate is withdrawn.
2. An
enterprise shall be dissolved only after paying off all its debts and other
property liabilities.
Article 158.- Procedures
for dissolution of enterprises
An enterprise
shall be dissolved in accordance with the following provisions:
1. Adopting a
decision on the dissolution of the enterprise. Such a decision shall have the
following principal contents:
a/ Name and
address of the head office of the enterprise;
b/ Reasons for
the dissolution;
c/ Duration and
procedures for liquidation of contracts and payment of the enterprise's debts;
such duration for liquidation and payment shall not exceed six months as from
the date of adoption of the dissolution decision;
d/ Plans on
settling obligations arising from labor contracts;
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2. Owner of a
private enterprise, the Members' Council or company's owner, the Management
Board shall directly organize the liquidation of enterprise's assets unless
otherwise provided for in the company's charter.
3. Within seven
working days as from the date of its adoption, the dissolution decision must be
sent to the business registration office, all creditors, people with related
rights, obligations and interests, and laborers of the enterprise; such
decision shall be publicly posted at the enterprise's head office.
If newspaper
publishing is required by law, the enterprise dissolution decision must be
published in at least three consecutive issues of a printed or electronic
newspaper.
The dissolution
decision must be sent to creditors together with a notice on the plan on
settlement of debts. Such notice shall contain the name and address of the
creditors, the amount of debts, the time limit, the place and method of payment
of such debts, procedures and duration for settling complaints of creditors.
4. The debts of the dissolved enterprise
shall be paid in the following order:
a/ Owed
salaries, severance allowance, social insurance as provided for by law, other
benefits agreed according to signed collective labor agreements and labor
contracts;
b/ Tax debts
and other debts.
After paying in
full the debts and dissolution expenses, the remaining assets shall belong to
private enterprise owners, members, shareholders or the company's owners.
5. Within seven working days as from the
date of making full payment of all debts owed by the enterprise, the representative-at-law of the enterprise must send a dossier on its dissolution to the
business registration office. The business registration office shall,
within seven working days as from the date of receiving the valid dossier,
erase the name of the enterprise in its business registration book.
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After six
months if the business registration office does not receive the dissolution
dossier from the enterprise, such enterprise shall be considered dissolved and
the business registration office shall delete its name from the business
registration book. In this case, the representative-at-law, all members, for
limited liability companies, the company's owner, for one-member limited
liability companies, all members of the Management Board, for joint-stock
companies, and all general partners, for partnerships, shall jointly be liable
for unpaid debts and other financial obligations.
Article 159.- Activities prohibited since the issuance of
dissolution decisions
Since a
decision on dissolution of an enterprise is issued, such enterprise and its
managers shall be prohibited from
conducting the following activities:
1. Hiding or
dispersing assets;
2. Denouncing or reducing the debt-claming
rights;
3. Converting
unsecured debts into secured debts with the enterprise's assets;
4. Signing new
contracts other than contracts to dissolve the enterprise;
5. Pledging, mortgaging,
donating or leasing assets;
6. Terminating
the performance of already effective contracts;
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Article 160.- Bankruptcy
The bankruptcy of an enterprise shall comply with
the provisions of law on bankruptcy.
STATE
MANAGEMENT OF ENTERPRISES
Article 161.- Contents of state management of enterprises
1. To
promulgate, disseminate, and guide the implementation of legal documents on
enterprises and relevant legal documents.
2. To organize
business registration; guide the business registration in order to ensure the
materialization of strategies, master plans and plans orienting
social-economical development.
3. To organize
training, retraining of professional skills, improvement of business ethics for
enterprises' managers; of political quality, morality, and professional
qualification for officers involved in state management of enterprises; and
training and building of a contingent of skilled workers.
4. To realize
preferential policies for enterprises in compliance with orientations and
objectives of social-economical development strategies, master plans and plans.
5. To control
and inspect enterprises' business operations; and handling law-breaking acts of
enterprises, related individuals and organizations in accordance with the
provisions of law.
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1. The
Government shall perform the unified state management of enterprises, appoint
an agency responsible to the Government for assuming the prime responsibility
for, and coordinating with the other ministries and agencies in, performing
state management of enterprises.
2. Ministries
and ministerial-level agencies shall be responsible to the Government for
performing their assigned duties in state management of enterprises and, within
the scope of their assigned tasks and powers, have the following duties:
a/ To
periodically or at the request of business associations review the business
conditions subject to state management; recommend the removal of unnecessary
business conditions; adjust inappropriate business conditions; and submit to
the Government for promulgation new business conditions to ensure the
fulfillment of their assigned state management tasks;
b/ To guide the
implementation of legal provisions on business conditions; supervise, inspect
and handle violations in the observance of business conditions within the scope
of state management;
c/ To
disseminate and popularize legal documents;
d/ To manage
business activities in conditional business lines; to supervise, inspect, and
deal with the environmental pollution, protect the environment; to ensure food
safety and hygiene as well as labor safety and sanitation;
e/ To develop
the Vietnamese standard system; to supervise, inspect and handle violations in
ensuring the quality of goods and services according to the Vietnamese quality
standard system;
f/ To exercise
other rights and duties as provided for by law.
3. People's
Committees of provinces and centrally run cities shall perform the state
management of enterprises within their localities, and, within the scope of
their assigned tasks and powers, shall have the following duties:
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b/ To organize
business registration and manage enterprises and business households according
to the registered business contents; to administratively handle violations of
this Law and other relevant laws;
c/ To direct
their subordinate specialized agencies and People's Committees of rural
districts, urban districts, towns and provincial cities to implement legal
provisions on taxes and business conditions according to the provisions of law
and relevant guidelines of ministries and ministerial-level agencies; to
directly handle or propose competent agencies to handle violations of the
provisions on state management in this domain;
d/ To organize
business registration office, decide on the personnel for business registration
offices of the provinces or centrally-run cities; direct and guide People's
Committees of rural districts, urban districts, towns and provincial cities and
People's Committees of communes, wards and townships to handle administrative
violations in business registration.
Article 163.-
Organizational structure, tasks and powers of business registration offices
1. Business
registration offices shall have the following tasks and powers:
a/ To settle
business registration and grant business registration certificates in
accordance with the provisions of law;
b/ To set up
and manage the system of information on enterprises; to provide information to
state agencies, organizations and individuals upon request in accordance with
the provisions of law;
c/ Where deeming
it necessary for the enforcement of this Law, to ask enterprises for reports on
their business situation; to supervise and speed up the performance of the
reporting regime by enterprises;
d/ To examine
directly or request competent state agencies to supervise enterprises according
to the contents of business registration dossiers;
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f/ To be
responsible before law for violations in business registration;
g/ To exercise
other duties and powers in accordance with the provisions of this Law and other
relevant laws.
2. The
organizational structure of business registration offices shall be stipulated
by the Government.
Article 164.-
Supervision and inspection of business operations of enterprises
Supervision and
inspection of business operations of
enterprises shall comply with the provisions of law.
Article 165.- Handling
of violations
1. Those who
commit acts violating the provisions of this Law shall, depending on the nature
and severity of their violations, be disciplined, administratively sanctioned
or examined for penal liability in accordance with the provisions of law; if
causing damage to the interests of the enterprises, their owners, members,
shareholders, creditors or others, they shall have to pay compensations
therefor in accordance with the provisions of law.
2. An
enterprise shall have its business registration certificate withdrawn and its
name deleted from the business registration book in the following cases:
a/ The content
declared in the business registration dossier is fake;
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c/ The
enterprise fails to register the tax identification number for one year since
the issuance of the business registration certificate;
d/The
enterprise fails to operate in the registered location for six consecutive
months as from the date of grant of the business registration certificate or
the certificate of relocation of head office;
e/ The
enterprise fails to send reports on its business operations to the business
registration office for twelve consecutive months;
f/ The
enterprise suspends business operations for a whole year without notifying the
business registration office;
g/ The enterprise fails to send reports as
provided for at Point c, Clause 1, Article 163 of this Law to the business
registration office within three months as from the date of receiving a written
request;
h/ The
enterprise conducts banned business lines.
Chapter X
IMPLEMENTATION
PROVISIONS
Article 166.- Transformation of state companies
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The Government
shall stipulate and guide the transformation order and procedures.
2. During the
period of transformation, issues that are not provided for by this Law shall
still comply with the provisions of the 2003 Law on State Enterprises.
Article 167.- Enterprises in service of security, defense
State
enterprises established directly in service of security, defense or the
combination of economic and defense and security activities shall be organized,
managed and operate in accordance with the provisions of this Law and separate
regulations of the Government.
Article 168.- Exercise of the rights of the owner of the state
capital at enterprises
1. The State
exercises the rights of an owner of the state capital at enterprises on the
following principles:
a/ To exercise
the rights of an owner in the. capacity as an investor;
b/ To secure
and develop the state capital;
c/ To separate
the function of an owner and the function of state administrative management;
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e/ To exercise
consistently and concentratedly the rights and obligations of the capital
owner.
2. Functions,
duties and rights of state owner-representing agencies; mechanisms for exercise
of the rights of the state capital owner; methods and criteria for evaluating
the effectiveness and situation of state capital security and development;
mechanisms of coordination, supervision and evaluation of state owner
representing agencies; guidelines and measures to rearrange, restructure,
reform, and raise the effectiveness of the operations of, state enterprises
shall comply with the provisions of law.
3. The
Government shall submit to the National Assembly annual sum-up reports on the
situation of state capital-related business, situation of state capital and
assets security and development in enterprises.
Article 169.- Establishment of state enterprises
State
enterprises established after this Law takes effect must be registered,
organized, managed and operate in accordance with the provisions of this Law
and other relevant laws.
Article 170.- Application to enterprises established before this Law takes effect
1. Limited
liability companies, joint-stock companies, private enterprises and
partnerships which were set up in accordance with the 1999 Enterprise Law are
not required to carryout procedures for re-registration.
2.
Foreign-invested enterprises established before this Law takes effect, except
for the case stated in Clause 3 of this Article, shall have the following
rights:
a/ To
re-register and organize the management and activities according to this Law
and other relevant laws. The re-registration must be made within two years as
from the effective date of this Law;
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3.
Foreign-invested enterprises whose foreign investors have committed to transfer
without indemnification all the assets invested after the operation duration to
the Vietnamese Government may be transformed only if so allowed by the
competent state agency as stipulated by the Government.
4. Business
households that employ ten or more laborers must register to operate as
enterprise according to this Law.
Small-sized
business households shall make business registration and operate under
regulations of the Government.
Article 171.-
Implementation effect
1. This Law takes
effect as from July 1, 2006.
2. This Law
replaces the 1999 Enterprise Law; the 2003 Law on State Enterprises, except the
case stated in Clause 2, Article 166 of this Law; provisions on the
organization, management and operation of enterprises in the 1996 Law on
Foreign Investment in Vietnam and the 2000 Law Amending and Supplementing a
Number of Articles of the Law on Foreign Investment in Vietnam.
Article 172.-
Implementation guidance
The Government
shall detail and guide the implementation of this Law.
This Law was
passed on November 29, 2005, by the XIth National Assembly of the Socialist
Republic of Vietnam at its 8th session.
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CHAIRMAN OF THE
NATIONAL ASSEMBLY
Nguyen Van An