Chapter VIII
GROUPS OF COMPANIES
Article 188. Business corporations, general companies
1. Business corporations and general companies of various economic sectors are groups of companies that are related to each other through ownership of shares, stakes, or other kinds of connection. A business corporation or a general company is not a type of business entity, does not have a legal status, and is not required to apply for establishment registration as prescribed by this Law.
2. A business corporation or general company has a parent company, subsidiaries, and other affiliate companies The parent company, subsidiaries, and each of the associate companies of a business corporation or general companies have rights and obligations of independent enterprises as prescribed by law.
Article 189. Parent company and subsidiaries
1. A company is considered parent company of another company if the former company:
a) Owns more than 50% of charter capital or total ordinary shares of the other company;
b) Is entitle to directly or indirectly decide the designation of a majority of or all of Members of the Board of Directors, the Director/General Director of the other company;
c) Is entitled to decide amendments to the other company’s charter.
2. Subsidiaries must not contribute capital to or buy shares of the parent company. Subsidiaries of the same parent company must not contribute capital or buy shares of each other for the purpose of cross ownership.
3. Subsidiaries of the same parent company which has at least 65% state capital must not contribute capital to establish an enterprise as prescribed in this Law.
4. The Government shall elaborate Clause 2 and Clause 3 of this Article.
Article 190. Rights and obligations of parent company to subsidiaries
1. Depending on the type of business of the subsidiary, the parent company shall perform its rights and obligations as a member/partner, owner, or shareholder of the subsidiary in accordance with corresponding regulations of this Law and relevant regulations of law.
2. The contracts, transactions, and other relationships between the parent company and the subsidiary must the established and executed independently and equitably under conditions applied to independent legal entities.
3. If the parent company makes intervention beyond the competence of the owner, member/partner, or shareholder and requires the subsidiary to do business against usual practice or engage in unprofitable activities without providing acceptable compensation in the fiscal year and, the parent company shall be responsibility for any damage to the subsidiary.
4. The manager of the parent company shall take responsibility for the intervention mentioned in Clause 3 of this Article and, together with the parent company, take joint responsibility for the damage.
5. If the parent company fails to provide compensation for the subsidiary as prescribed in Clause 3 of this Article, the creditor, member/partner, or shareholder that holds at least 1% of charter capital of the subsidiary is entitled to, whether single-handedly or on behalf of the subsidiary, request the parent company to pay compensation for the subsidiary.
6. If the business activities of a subsidiary mentioned in Clause 3 of this Article bring profits for another subsidiary of the same parent company, the subsidiary that receives such profit shall, together with the parent company, return the profit to the subsidiary that suffers the loss.
Article 191. Financial statements of parent company and subsidiaries
1. At the end of the fiscal years, apart from the reports and documents prescribed by law, the parent company shall make the following reports:
a) Consolidated financial statement of the parent company in accordance with regulations of law on accounting;
b) The report on summary of annual business outcome of the parent company and subsidiaries;
c) The report on summary of management and administration of the parent company and subsidiaries.
2. The persons in charge of making the reports mentioned in Clause 1 of this Article shall not make and submit such reports before receiving all financial statements of subsidiaries.
3. At the request of legal representative of the parent company, the legal representative of the subsidiary shall provide necessary reports, documents, and information as prescribed to make the consolidated financial statement and summary report of the parent company and subsidiaries.
4. The parent company’s manager shall use such reports to make the consolidated financial statement and summary report of the parent company and subsidiaries if the reports made and submitted by subsidiaries are not suspected to be contain incorrect, inaccurate, or false information.
5. In case the parent company’s manager does not receive necessary reports, documents, and information from a subsidiary after taking all necessary measures within his/her competence, the parent company’s manager shall still make and submit the consolidated financial statement and summary report of the parent company and subsidiaries. The report might or might not contain information from such subsidiary, but explanation must be provided to avoid misunderstanding.
6. Reports, annual financial statements of the parent company, subsidiaries, consolidated financial statements, and summary reports of the parent company and subsidiaries must be kept at the parent company’s headquarter. Copies of the reports and documents in this Clause must be available of the parent company’s branches in Vietnam’s territory.
7. Subsidiaries must make summary reports on purchase, sale, and other transactions with the parent company in addition to the reports and documents prescribed by law.
Tìm kiếm
Luật doanh nghiệp 2014 (Bản Word)
Luật doanh nghiệp 2014 (Bản Pdf)
