Chapter VII
REORGANIZATION, DISSOLUTION, BANKRUPTCY OF STATE COMPANIES
Article 73.- Reorganization of State companies
Forms of reorganization of State companies which do not alter the companies’ ownership shall include:
1. Merger into other State companies;
2. Consolidation of State companies;
3. Division of State companies;
4. Separation of State companies;
5. Transformation of State companies into State-run one-member limited liability companies or State-run limited liability companies with two or more members;
6. Transformation of State corporations with investment and establishment decided by the State into corporations invested and set up by companies themselves;
7. Contracting or lease of State companies;
8. Other forms as provided for by law.
Article 74.- Conditions for reorganization of State companies
1. Independent State companies conducting business activities and being on the list of those which the State shall consolidate, develop or maintain 100% ownership may be transformed into State-run one-member limited liability companies or State-run limited liability companies with two or more members.
2. The conditions for reorganization of State companies in forms of merger, consolidation, division, separation shall be prescribed by the Government.
3. The State corporations set up under the 1995 Law on State Enterprises and meeting the following conditions may be transformed, reorganized into the State corporations invested and set up by companies themselves under the provisions in Articles 54, 55, 56, 57, 58 and 59 of this Law:
a) Being on the list of those which the State shall consolidate, develop and continue to maintain 100% State ownership in companies where the State holds dominant powers;
b) Having dominant contributed capital in many other companies or having plans on equitization or sale of member companies of the corporations, sections of the State companies, where, however, the State holds dominant shares or dominant contributed capital;
c) Being engaged in various business lines, of which one is the principal business line; having many dependent units inside and outside the country;
d) Having large capital for investment of capital in other companies;
e) Having the development capability.
The principles and schedules for transformation of State companies shall be prescribed by the Government.
Article 75.- Competence and procedures for reorganization of State companies
1. The competence to decide on reorganization of State companies is prescribed as follows:
a) The persons who decide on the establishment of State companies shall organize the elaboration of plans for, and decide on, the reorganization of companies. In case of merger or consolidation of State companies of various ministries, of various provinces or centrally-run cities, or between State companies set up by ministries and State companies set up by provinces or centrally-run cities, the agencies agreed upon shall perform the rights and obligations of owners of the consolidating companies or the merging companies to issue decisions on merger or consolidation of the companies; in case of failure to reach agreement, the agencies having companies to be merged or consolidated may be the co-owners of State-run limited liability companies with two or more members;
b) For cases of reorganization or transformation of corporations, after the Appraisal Councils make proposals and the Prime Minister approves the plans for reorganization of the corporations, the persons who have decided the establishment of the corporations shall decide on the reorganization of the corporations;
c) The Prime Minister shall decide to reorganize important State companies in direct service of defense and/or security.
2. The decisions on reorganization of companies must be sent to creditors and notified to laborers within thirty days as from the date of issuing the reorganization decisions.
3. Where the reorganization of companies leads to the change in legal forms or business objectives and lines, in charter capital, the companies must carry out procedures for re-registration or additional registration with the business registries.
Article 76.- Responsibilities of the reorganized State companies
1. For cases of division of companies, the divided companies shall terminate their existence and the new companies shall jointly bear responsibility for the debts not yet repaid, the labor contracts and other property obligations of the divided companies.
2. For cases of separation of companies, the separated companies and the separating companies shall jointly bear responsibility for the debts not yet repaid, the labor contracts and other property obligations of the separated companies.
3. For cases of consolidation of companies, the consolidated companies shall terminate their existence, the consolidating companies shall enjoy lawful interests, bear responsibility for the debts not yet repaid, the labor contracts and other property obligations of the consolidated companies.
4. For cases of merger of companies, the merging companies shall enjoy the lawful interests and bear responsibility for the debts not yet repaid, the labor contracts and other property obligations of the merged companies.
Article 77.- Dissolution of State companies
1. The State companies shall be considered for dissolution in the following cases:
a) Upon the expiry of the operation duration inscribed in the establishment decisions and the companies do not apply for the extension;
b) The companies suffer prolonged business losses but have not yet fallen into the state of bankruptcy;
c) The companies fail to fulfill the tasks assigned by the State after they have applied the necessary measures;
d) The maintenance of the companies is unnecessary.
2. The corporations organized and set up by the State and failing to achieve the objectives prescribed in Clause 5, Article 48 of this Law shall have their managerial apparatuses dissolved and be transformed into independent State companies.
Article 78.- Decisions on dissolution of State companies
1. The persons who decide on the establishment of State companies shall be entitled to decide on the dissolution of such State companies. The dissolution decisions must be sent to the business registries, creditors and persons with relevant rights and obligations and be notified to laborers in the companies within seven days as from the date of issuance of the decisions to dissolve the companies.
2. The persons who decide to dissolve companies must set up the Dissolution Councils which function to advise the company dissolution deciders on deciding to dissolve the companies and organize the execution of the decisions on company dissolution. The order and procedures for execution of the company dissolution decisions shall be prescribed by the Government.
3. The complaints about dissolution of State companies and the settlement thereof shall comply with the provisions of legislation on complaints and denunciations.
Article 79.- Bankruptcy of State companies
The settlement of bankruptcy of State companies shall comply with the provisions of legislation on bankruptcy.
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