Chapter III
RIGHTS AND OBLIGATIONS OF STATE COMPANIES
Article 12.- Capital and assets of State companies
1. The companies' capital shall include capital invested in the companies by the State, capital mobilized by the companies themselves and other capital sources as provided for by law.
2. The State's capital invested in the companies shall include State budget capital and accumulated capital added to the State capital.
3. The land use right value calculated into capital of the companies according to the provisions of land legislation. The Government shall guide in detail the determination of land use right value, methods of calculating and including the land use right value into the capital according to land use purposes and the particularity of branches, lines and domains of operation of each type of State companies.
4. The State companies' assets shall include fixed assets and liquid assets.
Article 13.- Rights of State companies over capital and assets
1. To possess, use the companies' capital and assets for business, achievement of legitimate benefits from capital and assets of the companies.
2. To dispose of the companies' capital and assets according to the provisions of this Law and other relevant law provisions.
3. To use and manage assets being land and/or natural resources, which are assigned or leased by the State according to the provisions of legislation on land, natural resources.
4. The State shall not regulate the State's capital invested in the companies and the capital and assets of the companies by mode of non-payment, except for cases of deciding to reorganize the companies or realizing the objectives of providing public-utility products and/or services.
Article 14.- The State companies' obligations towards capital and assets
1. To preserve and develop the State capital and capital mobilized by the companies themselves, to take self-responsibility for the debts and other property obligations of the companies within their assets.
2. The representatives of owners being the State are responsible for the debts and other property obligations of the companies within the capital amounts invested in the companies by the State.
3. To periodically re-evaluate the companies' assets according to the Government's regulations.
Article 15.- Business rights of State companies
1. To take initiative in organizing their production and business, to organize their managerial apparatuses according to business requirements and ensure efficiency in business.
2. To do business in production and business lines not banned by law; to expand business scale according to capability of the companies and demands of domestic and overseas markets.
3. To look for domestic and overseas markets, customers and sign contracts.
4. To decide by themselves the purchase prices and sale prices of products and services, except for public-utility products and/or services as well as products and/or services priced by the State, which shall comply with the price levels or brackets set by the State.
5. To decide on investment projects according to the provisions of legislation on investment; to use capital and assets of the companies for joint venture or cooperation with, or capital contribution to, other enterprises in the country; to hire or purchase part or whole of other companies.
6. To use capital of the companies or mobilized capital for investment in the establishment of State-run one-member limited liability companies; to invest together with other investors in the establishment of joint-stock companies or limited liability companies with two or more members.
7. To open branches and/or representative offices at home and abroad.
8. To formulate and apply labor and materials norms, wage unit prices and other expenses on the basis of ensuring the efficiency of companies' business and the compliance with law provisions.
9. To recruit, hire, arrange, employ, train, discipline, sack laborers, to select forms of wage and bonus payment suitable to business requirements and have other rights as prescribed by labor legislation.
10. To have other business rights according to the market demands and in compliance with the provisions of law.
Article 16.- Business obligations of State companies
1. To conduct business strictly according to the registered production and business lines; ensure the quality of products and services provided by the companies according to the registered standards.
2. To renew or modernize their technologies and managerial modes in order to raise the efficiency and competitiveness.
3. To ensure the rights and interests of laborers according to labor legislation, to ensure the laborers' rights to participate in the management of companies as provided for in Section 3,
4. To comply with the State's regulations on defense, security, culture, social order and safety, natural resource and environment protection.
5. To observe the regimes of book-keeping, audit and financial statements, statistical reports according to law provisions and at requests of owners being the State.
6. To submit to the supervision and inspection by owners being the State; to abide by the inspection decisions of finance bodies and competent State agencies according to law provisions.
7. To be answerable to the capital investors for the use of capital for investment in the establishment of other enterprises.
8. To fulfill other obligations in business according to law provisions.
Article 17.- The financial rights of State companies
1. To mobilize capital for business in forms of issuing bonds, credit bills, promissory notes; borrowing capital of banks, credit institutions and other financial organizations, of individuals and organizations outside the companies; borrowing capital of laborers, and other forms of capital mobilization under the provisions of law.
The mobilization of capital for business shall comply with the principles of self-responsibility for debt repayment, assurance of efficiency in the use of mobilized capital and non-alteration of the form of ownership of the companies.
In cases where companies mobilize capital for ownership conversion, the provisions in The mobilization of capital of foreign individuals and organizations shall comply with the Government's regulations on management of foreign loans.
2. To take initiative in using capital for business activities of the companies; to use and manage funds of the companies according to law provisions.
3. To decide on amortization of fixed assets according to the principles that the minimum amortization level must ensure to cover the tangible wear-out and intangible depreciation of fixed assets and shall not be lower than the minimum amortization rates prescribed by the Government.
4. To enjoy allowance and/or price subsidy regimes or other preferential regimes of the State when performing the tasks of public-utility, defense, security, natural calamity prevention and combat or the provision of products and/or services according to the State’s price policy and failing to offset the production costs of these products and/or services of the companies.
5. To be entitled to pay rewards for technical, managerial and/or technological renewal or innovations; rewards for higher labor productivity; rewards for material and cost saving. These rewards shall be accounted as business costs on the basis of ensuring the companies’ business efficiency brought about by such technical, managerial and/or technological renewal or innovations, higher labor productivity and/or materials and cost savings.
6. To enjoy investment and/or reinvestment preference regimes as prescribed by law.
7. To reject and denounce all requests for the supply of resources, which are not prescribed by law, of any individuals, agencies or organizations, except for voluntary contributions for humanitarian and public-utility purposes.
8. After fulfilling their tax obligations, transferring losses according to the provisions of the Law on Enterprise Income Tax and fulfilling other financial obligations under law provisions, making deductions for setting up financial reserve funds, the remaining profits shall be divided according to sources of capital invested by the State and sources of capital mobilized by the companies themselves as follows:
a) The profits divided according to the State’s investment capital sources shall be used for reinvestment to increase the State capital at the companies or to formulate concentrated funds for investment in other State enterprises in domains which the State needs to develop or to control according to the Government’s regulations;
b) The profits divided according to sources of capital mobilized by the companies themselves shall be deducted for setting up the development investment funds according to the Government’s regulations; the remainder shall be channeled into reward funds and welfare funds by the companies themselves.
Where the companies have payable due debts, which have not yet been fully repaid, they may raise wages and make deductions for rewards to the companies’ employees, including managers, only after they fully repay such due debts.
The distribution of after-tax profits into development investment funds, reward funds and welfare funds by State companies operating in the State-monopolized domains, newly set up State companies shall comply with the Government’s regulations.
Article 18.- Financial obligations of the State companies
1. To conduct business with profits, to ensure the ratio of profit to the capital invested by the State and assigned by the owner’s representatives; to register, declare and pay tax fully; to fulfill obligations toward the owner and other financial obligations under the provisions of law.
2. To manage and use with efficiency the business capital, including capital portions invested in other companies (if any), natural resources, land and other resources, which are assigned or leased by the State.
3. To use capital and other resources for performance of other special tasks when so requested by the State.
4. To fully comply with the regimes of management of capital, assets, funds, regimes of accounting and audit according to law provisions; to be accountable for the honesty and legality of their financial activities.
5. To observe the regimes of annual financial statement, financial publicity and supply of necessary information for truthful assessment of the efficiency of the companies’ operation.
Article 19.- Rights and obligations of State companies when participating in public-utility activities
Apart from the rights and obligations of the State companies, which are prescribed in Articles 13, 14, 15, 16, 17 and 18 of this Law, the State companies, when participating in public-utility activities, shall have the following rights and obligations:
1. To produce and/or provide public-utility products and/or services on the basis of bidding. For public-utility activities carried out on orders placed, or under plans assigned, by the State, the companies are obliged to sell public-utility products and/or provide public-utility services to the right subjects, at the prices and charge levels set by the State;
2. To take responsibility before the State for their public-utility activities; take responsibility before customers and before law for the public-utility products and/or services provided by the companies;
3. To be considered for additional investment corresponding to the assigned public-utility tasks; to account and have their reasonable expenses for public-utility activities covered and ensure the laborers’ interests according to the following principles:
a) For products and/or services provided by mode of bidding, the companies shall themselves cover the expenses according to the bid prices;
b) For public-utility products and/or services, which cannot be implemented by mode of bidding but on orders placed by the State, the companies may use charges or turnovers from the provision of products and/or services on the orders placed by the State to cover up reasonable expenses in service of public-utility activities and ensure interests for laborers. In cases where the revenues are not enough to make up for the reasonable expenses, the difference shall be provided by the State budget and the laborers’ satisfactory interests shall be ensured.
4. To formulate and apply spending norms, wage unit prices within the bid prices, the cost estimates according to the orders placed or the plans assigned by the State;
5. To fulfill other tasks and obligations of the State companies according to the provisions of this Law;
6. For companies which are designed, established with investment and make business registration for the achievement of key, regular and stable objectives of providing public-utility products and/or services,
a) They shall be invested by the State with capital for formation of assets in service of the objectives of providing public-utility products and/or services;
b) When necessary, the State shall transfer the capital portion and assets in service of the objectives of providing public-utility products and/or services of the companies for the achievement of the objectives of providing public-utility products and/or services in other companies;
c) They are entitled to transfer, lease, mortgage assets in service of the objectives of providing public-utility products and/or services, which are under the companies’ management, when so permitted by the persons who decide the establishment of the companies. The mortgage of land use right value and/or the companies’ assets associated with the rights to use land in service of the objectives of providing public-utility products and/or services shall comply with the provisions of the land legislation;
d) They are entitled to use the assigned resources for organization of additional business activities when so agreed upon by the persons who decide the establishment of the companies, but without affecting the achievement of the principal objectives of providing public-utility products and/or services of the companies;
e) They shall perform other tasks and obligations of the companies participating in public-utility activities according to the provisions of this Law.
The Government shall prescribe branches and domains with public-utility products and/or services; guide in detail the mechanism for bidding, order placement, plan assignment, financial mechanism and accounting for public-utility activities.
Article 20.- Rights and obligations of the State companies holding dominant powers over other enterprises
Apart from the rights and obligations of the State companies prescribed in Articles 13, 14, 15, 16, 17, 18 and 19 of this Law, the State companies holding dominant powers over other enterprises shall also have the rights and obligations prescribed in Articles 57, 58 and 59 of this Law.
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