Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Law provides the establishment, organization and operation of cooperatives and unions of cooperatives in different sectors of the economy.
Article 2. Subjects of application
This Law applies to cooperatives and unions of cooperatives, and cooperative members (below referred to as members), member cooperatives of unions of cooperatives (below referred to as member cooperatives), and organizations, households and individuals related to the establishment, organization and operation of cooperatives and unions of cooperatives.
Article 3. Cooperatives and unions of cooperatives
1. A cooperative is a collective economic organization with co-owners and legal entity status, established voluntarily by at least 7 members who cooperate with and assist one another in production, business or job creation activities to meet their common needs on the basis of autonomy, self-responsibility, equality and democracy in management of the cooperative.
2. A union of cooperatives is a collective economic organization with co-owners and legal entity status, established voluntarily by at least 4 cooperatives which cooperate with and assist one another in production and business activities to meet their common needs on the basis of autonomy, self-responsibility, equality and democracy in the management of the union.
3. When a cooperative or union of cooperatives develops to a higher level, it may form businesses to operate in accordance with the Enterprise Law.
Article 4. Interpretation of terms
In this Law, the terms below are construed as follows:
1. Common needs of members or member cooperatives means needs for use of similar products and services arising frequently and stably from business and production activities and the lives of members or member cooperatives. For a job creation cooperative, the common needs of members are the needs of cooperative members for jobs created by the cooperative.
2. Minimum contributed capital means an amount that individuals, households and legal entities shall contribute to the charter capital of a cooperative or union of cooperatives in accordance with the charter of the cooperative or union of cooperatives to become its members or member cooperatives.
3. Charter capital means the total capital contributed or committed to contribute in a given period by members or member cooperatives and is specified in the charter of the cooperative or union of cooperatives.
4. Undivided asset means a part of assets of a cooperative or union of cooperatives not divided to the members or member cooperatives upon termination of the status of member or member cooperative or when the cooperative or union of cooperatives terminates its operation.
5. Service contract means an agreement between a cooperative or union of cooperatives with its members or member cooperatives on the use of its products and services in order to meet the common needs of its members or member cooperatives.
6. Products or services of a cooperative or union of cooperatives for members or member cooperatives are products or services provided by the cooperative or union of cooperatives to its members or member cooperatives under service contracts through one or more of the following activities:
a/ Common purchase of products and services from the market to serve members or member cooperatives;
b/ Common sale of products and services of members or member cooperatives to the market;
c/ Purchase of products and services of members or member cooperatives for sale to the market;
d/ Purchase of products and services from the market for sale to members or member cooperatives;
e/ Processing of products of members or member cooperatives;
f/ Supply of equipment and technical infrastructure to serve members or member cooperatives;
g/ Credit for members or member cooperatives;
h/ Job creation for members, for job creation cooperatives;
i/ Other activities as prescribed by the charter of the cooperative or union of cooperatives.
7. Level of use of products or services of members or member cooperatives means the ratio of the value of products or services used by each member or member cooperative to the total value of products or services provided by the cooperative or union of cooperatives for all members or member cooperatives.
For a job creation cooperative, the level of use of products or services is the members’ labor contribution to the cooperative shown by the ratio of the salary of each member to the total salary of all members.
Article 5. State guarantee for cooperatives and unions of cooperatives
1. Recognizing and protecting the right to own property, capital, income, and other rights and legitimate interests of cooperatives and unions of cooperatives.
In case the State purchases or requisitions assets of cooperatives or unions of cooperatives for the reason of national defense, security or national interests, these assets must be paid or compensated in accordance with the law on compulsory purchase or requisition of assets.
2. Ensuring a fair production and business environment between cooperatives and unions of cooperatives and other types of enterprise and other economic organizations.
3. Ensuring the autonomy and self-responsibility of cooperatives or unions of cooperatives and not interfering in their lawful activities.
Article 6. Support and preferential policies of the State
1. The State has the following support policies for cooperatives and unions of cooperatives:
a/ Training and retraining of human resources;
b/ Trade promotion and market expansion;
c/ Application of new science, techniques and technologies;
d/ Access to capital and funds to support the development of cooperatives;
e/ Facilitation of participation in target programs and socio-economic development programs;
f/ Establishment of cooperatives and unions of cooperatives.
2. The State has the following preferential policies for cooperatives and unions of cooperatives:
a/ Preferential business income tax and other taxes in accordance with tax laws;
b/ Preferential fee for cooperative or cooperative union registration in accordance with the law on charges and fees.
3. Cooperatives and unions of cooperatives operating in agriculture, forestry, fishery or salt production may, in addition to the support and preferential policies prescribed in Clauses 1 and 2 of this Article, enjoy the following support and preferential policies:
a/ Investment in infrastructure development;
b/ Allocation and lease of land for their activities in accordance with the land law;
c/ Preferential credit;
d/ Capital and breeds when meeting with difficulties caused by natural disasters or epidemics;
e/ Product processing.
4. The Government shall detail this Article based on sectors, geographical areas and conditions for national socio-economic development in each period and the level of development of cooperatives and unions of cooperatives.
Article 7. Principles of organization and operation
1. Individuals, households and legal entities may voluntarily establish, join or leave cooperatives. Cooperatives may voluntarily establish, join and leave unions of cooperatives.
2. Cooperatives and unions of cooperatives may widely admit members or member cooperatives.
3. Members or member cooperatives enjoy equality and have equal votes regardless of contributed capital in deciding on the organization, management and operation of their cooperatives or unions of cooperatives; are provided with adequate, timely and accurate information on production and business activities, finance, income distribution and other contents as prescribed by the charter.
4. Cooperatives and unions of cooperatives shall enjoy autonomy and take responsibility for their activities before law.
5. Members and member cooperatives and cooperatives and unions of cooperatives shall implement their commitments under service contracts and as prescribed by their charters. Incomes of cooperatives or unions of cooperatives must be mainly distributed according to the level of use of products and services of members or member cooperatives or, for job creation cooperatives, by members’ contributed labor.
6. Cooperatives or unions of cooperatives shall pay attention to education, training and retraining for their members or member cooperatives, managers and employees, and provide information about the nature and benefits of cooperatives or unions of cooperatives.
7. Cooperatives or unions of cooperatives shall care for the sustainable development of their members or member cooperatives and cooperate with one another in developing the cooperative movement on local, regional, national and international scales.
Article 8. Rights of cooperatives and unions of cooperatives
1. To achieve their operation objectives; to implement autonomy and self-responsibility in their operation.
2. To decide on organizing their management and operation; to hire and use labor.
3. To carry out production and business activities or create jobs according to registered business lines to meet the common needs of their members or member cooperatives.
4. To supply and consume products, services and jobs for their members or member cooperatives and to the market while ensuring the fulfillment of obligations toward their members or member cooperatives.
5. To admit new members and terminate the status of member or member cooperative.
6. To increase or decrease their charter capital during operation; to mobilize capital and carry out internal credit activities in accordance with law.
7. To enter into joint ventures with, associate and cooperate with domestic and foreign organizations and individuals to achieve their operation objectives.
8. To contribute capital to, buy shares from and establish businesses aiming to support their activities.
9. To manage, use and handle their capital, assets and funds.
10. To distribute their incomes and settle their losses and debts.
11. To participate in representative organizations of cooperatives or unions of cooperatives.
12. To lodge complaints about or through their representatives to denounce infringements upon their rights and legitimate interests; to handle their members or member cooperatives for violations of their charter, and settle internal disputes.
Article 9. Obligations of cooperatives and unions of cooperatives
1. To implement the charter.
2. To guarantee the rights and legitimate interests of their members or member cooperatives as prescribed by this Law.
3. To operate strictly according to their registered business lines.
4. To perform service contracts between cooperatives and their members or unions of cooperatives and their member cooperatives.
5. To implement laws on finance, tax, accounting, audit and statistics.
6. To manage and use their capital, assets and funds in accordance with law.
7. To manage and use land and other resources allocated or leased by the State in accordance with law.
8. To sign and perform labor contracts, pay social insurance and health insurance premiums, and implement other policies for their laborers in accordance with law.
9. To educate, train, retrain and provide information for their members or member cooperatives.
10. To report on their activities according to regulations of the Government.
11. To pay compensations as prescribed by law for damages caused by themselves to their members or member cooperatives.
Article 10. Preservation of documents of cooperatives or unions of cooperatives
1. Cooperatives or unions of cooperatives shall preserve the following documents:
a/ Their charter, amended and supplemented charter and regulations; registration books of their members or member cooperatives;
b/ Their registration certificates; intellectual property rights certificates; product or goods quality registration certificates; licenses of conditional business lines;
c/ Documents and papers of certification of their right to own or use assets;
d/ Applications for joining and capital contribution certificates of their members or member cooperatives; minutes and resolutions of their founding conference, general meetings of members and Board of Directors; and their decisions;
e/ Reports on production and business results, reports and other documents of the Board of Directors, Director (General Director), Control Board or controller; conclusions of inspection, examination and audit agencies;
f/ Accounting books, accounting documents and financial statements.
2. The documents prescribed in this Article must be preserved in accordance with law.
Article 11. Political organizations, socio-political organizations and socio-professional organizations in cooperatives and unions of cooperatives
1. Political organizations, socio-political organizations and socio-professional organizations in cooperatives or unions of cooperatives shall operate within the framework of the Constitution and law.
2. Cooperatives and unions of cooperatives shall create favorable conditions for their members or member cooperatives and laborers to establish and join organizations prescribed in Clause 1 of this Article.
Article 12. Prohibited acts
1. Issuing certificates of registration of cooperatives or unions of cooperatives in the case of ineligibility; refusing to issue certificate of registration of cooperatives or cooperatives unions in the case of eligibility prescribed by this Law; hindering or harassing the registration and operation of cooperatives or unions of cooperatives.
2. Hindering the exercise of the rights and performance of the obligations of cooperatives, unions of cooperatives, members and member cooperatives under this Law and their charter.
3. Operating in the name of cooperatives or unions of cooperatives without a certificate of registration; continuing to operate even after the withdrawal of certificate of registration.
4. Declaring untruthful and inaccurate contents to register cooperatives or unions of cooperatives.
5. Committing fraud in the valuation of contributed assets and capital.
6. Conducting business lines which are not recorded in the certificate of registration; conducting conditional business lines when lacking business conditions prescribed by law.
7. Failing to abide by the principles of organization and operation prescribed in Article 7 of this Law.
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