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
1. Enterprises of all economic sectors.
2. Organizations and individuals involved in the establishment, management organization and operation of enterprises.
Article 3.- Application of the Enterprise Law, treaties and relevant laws
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.
Article 4.- Interpretation of terms
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.
5. Capital share means the ratio of capital contributed by an owner or joint owners of a company to its charter capital.
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.
14. Authorized representative means an individual who is authorized in writing by a member organization of a limited liability company or a shareholder-organization of a joint-stock company to exercise its rights in the company in accordance with the provisions of this Law.
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;
d/ Enterprise managers;
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;
22. State enterprise means an enterprise of which over 50% of charter capital is owned by the State.
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
1. Enterprises of all economic sectors shall be entitled to conduct any business lines that are not banned by law.
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.
3. To take initiative in the search for markets, customers, and in signing contracts.
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.
Article 9.- Obligations of enterprises
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.
1. To have rights and obligations as provided in Articles 8 and 9 and elsewhere in this Law.
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.
3. Submitting business registration dossiers containing untruthful or inaccurate information; registering changes in the business registration dossiers either with untruthful and inaccurate information or not in time.
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;
c/ Documents and papers certifying ownership of the company's assets;
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.
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