Chapter I
GENERAL PROVISIONS
Article 1. Scope
This Law deals with the establishment, management, reorganization, dissolution, bankruptcy and relevant activities of artels, cooperatives and cooperative unions; State policies for development of artels, cooperatives and cooperative unions.
Article 2. Regulated entities
1. Artels, cooperatives and cooperative unions.
2. Members of artels, cooperatives and cooperative unions.
3. Regulatory authorities, organizations and individuals relevant to establishment, management, reorganization, dissolution, bankruptcy and relevant activities of artels, cooperatives and cooperative unions.
Article 3. Application of Law on Cooperatives and other laws
In case there are other laws containing specific regulations on establishment, management, reorganization, dissolution, bankruptcy and relevant activities of artels, cooperatives and cooperative unions, regulations of these laws shall apply.
Article 4. Definitions
For the purposes of this Law, the following terms shall be construed as follows:
1. “internal transaction” means supply of goods/services, including employment services, or grant of internal loans by a cooperative or cooperative union to its official members under specific written agreements.
2. “external transaction” means transactions other than internal transactions of a cooperative or cooperative union.
3. “cooperative registration certificate” means a physical or electronic document recording information on registration of a cooperative or cooperative union issued by a business registration authority to that cooperative or cooperative union.
4. “artel registration certificate” means a physical or electronic document recording information on registration of an artel issued by a business registration authority to that artel.
5. “labour contribution” means a member’s direct participation in management and/or working under specific agreement made with an artel, cooperative or cooperative union.
6. “capital contribution” means a member’s contribution of assets as charter capital to establish a new cooperative or cooperative union or contribution of additional capital to an existing cooperative or cooperative union or members’ contribution of their own assets as assets of an artel.
7. “cooperative” means an organization that has the status of a juridical person, is voluntarily established by at least 05 official members who cooperate with and assist each other in production, business and job creation with the aim of meeting general economic, cultural and social demands of its members and making contribution to sustainable community and social development, and adheres to the principles of autonomy, equality and democracy.
8. “cooperative union” means an organization that has the status of a juridical person, is voluntarily established by at least 03 official members who cooperate with and assist each other in production, business and job creation with the aim of increasing their production and business scale, improving their ability to compete in the market, and making contribution to sustainable community and social development, and adheres to the principles of autonomy, equality and democracy.
9. “level of use of products/services” of a member means the ratio of value of products/services used by that member to total value of products/services supplied by a cooperative or cooperative union to all of its members.
10. “level of labour contribution” of a member means the ratio of salaries, wages or remunerations paid to that member to the sum of those paid to all members.
11. “relatives” of a person include his/her spouse, biological parents, adoptive parents, parents-in-laws, biological children, adopted children, children-in-law, biological siblings, siblings-in-law and biological siblings of his/her spouse.
12. “stake” means the value of assets that a member has contributed or promises to contribute as charter capital to a cooperative or cooperative union or to an artel under terms and conditions of a signed cooperation contract.
13. “undistributed fund” means the fund of a cooperative or cooperative union that shall not be distributed to its members during its operation.
14. “undistributed assets” are assets of a cooperative or cooperative union that shall not be distributed to its members during its operation.
15. “distributed assets” are assets of a cooperative or cooperative union that shall be distributed to its members.
16. “members” include official members, contributing members and non-contributing members of a cooperative or cooperative union or are members of an artel.
17. “official members” include:
a) Any member that makes capital contribution and uses products/services of a cooperative or cooperative union;
b) Any member that makes capital contribution and labour contribution to a cooperative or cooperative union;
c) Any member that makes capital contribution and labour contribution to, and uses products/services of a cooperative or cooperative union.
18. “contributing member” means a member that only makes capital contribution, without using products/services and making labour contribution, to a cooperative or cooperative union.
19. “non-contributing members” include:
a) A member that does not make capital contribution but uses products/services of a cooperative or cooperative union;
b) A member that does not make capital contribution but makes labour contribution to a cooperative or cooperative union;
c) A member that does not make capital contribution but uses products/services and makes labour contribution to a cooperative or cooperative union.
20. “reorganization” means the split-off, split-up, consolidation or merger of a cooperative or cooperative union.
21. “artel” means an organization that does not have the status of a juridical person and is voluntarily established under a cooperation contract by at least 02 members who jointly make capital contribution and labour contribution to perform certain works, share benefits and assume joint responsibility.
22. “internal transaction rate” means the ratio of revenues earned from internal transactions to total revenues earned by a cooperative or cooperative union or the ratio of costs of internal transactions to total expenses incurred by cooperative or cooperative union in a fiscal year.
23. “holding” means the ratio of a member’s stake to the charter capital of a cooperative or cooperative union or the ratio of the stake of an artel's member to total value of stakes of all members of that artel.
24. “charter capital” means total value of assets that official members and contributing members have contributed or promise to contribute upon establishment or during operation of a cooperative or cooperative union.
25. “minimum capital contribution” means the smallest amount of money that an individual or organization has to contribute as charter capital to become an official member or contributing member of a cooperative or cooperative union.
26. “maximum capital contribution” means the greatest amount of money that an individual or organization may contribute as charter capital of a cooperative or cooperative union.
Article 5. Protection of artels, cooperatives and cooperative unions and their members by the State
1. Recognize and protect the rights to ownership of assets, capital, income and other lawful rights and interests of artels, cooperatives and cooperative unions and their members. The State may purchase or requisition assets of artels, cooperatives and cooperative unions in accordance with regulations of law on purchase and requisitioning of assets.
2. Ensure equality in business and investment environment between artels, cooperatives and cooperative unions, and other enterprises and business entities.
3. Give artels, cooperatives and cooperative unions autonomy in their organization, operation, production and business activities without intervening in their lawful operations.
Article 6. Political organizations and socio-political organizations of artels, cooperatives and cooperative unions
1. Political organizations and socio-political organizations of artels, cooperatives and cooperative unions shall operate in accordance with the Constitution the laws of Vietnam and their own charters.
2. Artels, cooperatives and cooperative unions shall enable their members and employees to establish and join such organizations mentioned in Clause 1 of this Article.
Article 7. Prohibited acts
1. Regulatory authorities are prohibited from:
a) Issuing cooperative or artel registration certificate to ineligible applicants; refusing to issue cooperative or artel registration certificate to applicants that meet eligibility requirements laid down in this Law;
b) Obstructing the performance of legitimate rights and obligations of artels, cooperatives, cooperative unions and their members as prescribed in this Law;
c) Giving assistance or incentives to artels, cooperatives or cooperative unions without complying with principles and provisions on eligible entities, authority, contents and procedures laid down in laws;
d) Abusing their positions and powers to violate regulations of law on assistance and provision of incentives for artels, cooperatives and cooperative unions;
dd) Delaying, obstructing or harassing artels, cooperatives, cooperative unions and relevant organizations and individuals during registration, operation of, or provision of assistance to, artels, cooperatives or cooperative unions;
e) Deliberately reporting or providing incorrect or untruthful information on assistance or incentives for artels, cooperatives or cooperative unions.
2. Artels, cooperatives and cooperative unions are prohibited from:
a) Operating without obtaining registration certificate as prescribed in this Law; operating without satisfying eligibility requirements laid down in this Law and relevant laws;
b) Providing untruthful or incorrect information in the application for registration of artel, cooperative or cooperative union;
c) Improperly implementing or applying principles for organization, management and operation laid down in this Law;
d) Providing false or untruthful information or forging documents for personal gain;
dd) Using resources for the purposes other than the intended ones.
3. Members of artels, cooperatives and cooperative unions are prohibited from:
a) Abusing positions and powers to obtain personal gain or interests for a group of members;
b) Providing untruthful information for their artels, cooperatives and cooperative unions.
Article 8. Principles for organization, management and operation of artels, cooperatives and cooperative unions
1. Voluntary and open membership.
Organizations and individuals may establish, join or leave artels, cooperatives or cooperative unions of their own will. Artels, cooperatives or cooperative unions attach much importance to interests of their members and increase membership engagement; irrespective of their gender, social position, ethnic group or religion, membership is open to all.
2. Democratic and equal organization and management.
Organization and operation of an artel shall be decided by its members on a democratic basis. Official members of a cooperative or cooperative union are allowed to engage in the organization, management and operation of that cooperative or cooperative union in a democratic and equal manner, regardless of their stakes.
3. Economic participation by members of a cooperative or cooperative union
Official members shall make capital contribution when joining the cooperative or cooperative union, and jointly control capital, funds and assets of the cooperative or cooperative union; have incomes distributed primarily according to their levels of use of products/services or levels of labour contribution.
4. Autonomy.
Artels, cooperatives and cooperative unions shall have autonomy in their operation before the Constitution and the law of Vietnam.
5. Education, training and information.
Artels, cooperatives and cooperative unions shall attach special importance to the dissemination of guidelines of the Communist Party of Vietnam as well as the State policies and laws on development of collective economy to their members, general public and young people; regularly provide education, training and re-training for improving qualifications and technical skills for their members and employees; provide adequate, accurate and timely information for their members.
6. Cooperation.
Members shall cooperate and assist each other with the aim of enriching themselves and their communities. Artels are encouraged to participate in establishment of cooperatives; cooperatives are encouraged to cooperate in establishment of cooperative unions so as to improve their capability to participate in production and consumption chains of products and services. Artels, cooperatives and cooperative unions are encouraged to establish and participate in representative bodies and Vietnam Cooperative Alliance system so as to develop domestic and international cooperative movement. Linkages between artels, cooperatives and cooperative unions, and other organizations, especially state-owned enterprises, in assisting the development of such linkages, consuming and using products/services should be strengthened with the aim of facilitating effective operation of such artels, cooperatives and cooperative unions.
7. Concern for community.
Artels, cooperatives, cooperative unions and young people shall express their concern and work for the development of a community of their members featuring solidarity and mutual assistance, and the development of local, regional, national and international residential communities.
Article 9. Rights of cooperatives and cooperative unions
Every cooperative or cooperative union has the right to:
1. Operate in such a way to effectively achieve its set objectives and goals.
2. Decide its organizational structure, management and operation; hire and use employees.
3. Freely engage in any business line that is not banned by laws.
4. Request its members to register their demands for products/services so as to develop and implement an appropriate plan for supply of products/services to its members.
5. Supply products/services to entities other than its members after having fulfilling all obligations to and ensuring interests of its members as prescribed in its charter or relevant laws.
6. Provide services and organize economic, social and cultural activities for the purposes of improving living conditions of its members and communities, and achieving sustainable development.
7. Engage in implementation of policies, programs and projects on economic, cultural and social development, political security, social safety and public order, and environmental protection in residential communities.
8. Admit new members and terminate membership in accordance with regulations of law on cooperatives.
9. Increase or decrease charter capital during its operation.
10. Raise capital in accordance with regulations of law.
11. Grant internal loans as prescribed in this Law.
12. Monitor revenues and expenses on its internal transactions separately from those on its external transactions.
13. Enter into joint ventures, linkages and cooperation with domestic and foreign organizations and individuals for achieving its operational objectives.
14. Make capital contribution to, purchase shares of, or establish enterprises with the aim of supporting its operations.
15. Distribute its incomes and settle its losses and debts.
16. Join in its representative body.
17. File complaints or denunciations of acts of infringing upon its legitimate rights and interests in accordance with regulations of law; settle internal disputes and take actions against violating members in accordance with its charter.
18. Exercise other rights as prescribed by law and its charter.
Article 10. Obligations of cooperatives and cooperative unions
Every cooperative or cooperative union is obliged to:
1. Admit membership upon fulfillment of all of eligibility requirements laid down in this Law, its charter and relevant laws.
2. Ensure legitimate rights and interests of its members in accordance with this Law and its charter.
3. Perform all agreements made with its members, and give priority to demands registered by its members over those of non-member entities.
4. Comply with regulations of law on finance, taxation, accounting, auditing and statistics, and relevant laws.
5. Manage and use its capital, assets and funds in accordance with regulations of law and its charter.
6. Manage and use land and resources in accordance with regulations of law.
7. Conclude and perform employment contracts, pay social insurance contributions and implement other policies for its employees in accordance with regulations of law.
8. Provide education, training and re-training for its members and employees.
9. Fulfill the cooperative/cooperative union registration obligations in an accurate, adequate and timely manner as prescribed in this Law.
10. Disclose information to its members as prescribed in Article 14 of this Law and make information disclosure as prescribed in relevant laws.
11. Make compensation for damage caused to its members in accordance with regulations of law and its charter.
12. Make, update and retain its register of official/contributing members.
13. Comply with reporting regulations and update information on its operating status in accordance with regulations of law.
14. Perform other obligations as prescribed by law and its charter.
Article 11. Legal representatives of cooperatives and cooperative unions
1. The legal representative of a cooperative or cooperative union is the person that, on behalf of the cooperative or cooperative union, exercises and performs the rights and obligations in its transactions, acts as the plaintiff, defendant or person with relevant interests and duties before a court or arbitral tribunal, and performs other rights and obligations as prescribed by law.
2. A cooperative or cooperative union may have one or several legal representatives. The quantity, position, rights and obligations of the legal representative, and division of rights and obligations amongst legal representatives (in case there are several legal representatives) shall be specified in the charter of the cooperative or cooperative union.
3. A cooperative or cooperative union shall have at least one legal representative residing in Vietnam. In case a cooperative or cooperative union has the only one legal representative but this representative fails to perform or is unable to perform his/her rights and obligations, and does not authorize any person to do so within 30 days, the cooperative or cooperative union shall convene the General Meeting of Members (GMM) to elect a new legal representative within 15 days from the expiration of the abovementioned period.
4. The court and other proceeding authorities are entitled to appoint the legal representative to participate in proceedings as prescribed by law.
Article 12. Document retention
1. A cooperative or cooperative union shall retain the following documents in accordance with regulations of law:
a) Its charter, regulations and rules; register of official/contributing members;
b) Cooperative registration certificate; certificates of intellectual property rights; certificates of registration of product/service quality; licenses for conditional business lines and other relevant documents;
c) Documents proving its ownership and rights to use assets;
d) Certificates of capital contribution of official/contributing members; minutes and resolutions of the establishment meeting, GMM, Board of Directors; decisions issued by the cooperative or cooperative union;
dd) Its financial statements, accounting books, records and other accounting documents.
e) Conclusions given by inspecting authorities and auditor’s reports (if any);
g) Other documents as prescribed in its charter.
2. An artel shall retain the following documents in accordance with regulations of law:
a) Cooperation contract;
b) Artel registration certificate (if any);
c) Records of contributions made by its members;
d) Other documents as prescribed in the cooperation contract.
Article 13. National cooperative information system
1. The national cooperative information system includes the national cooperative portal, the artel, cooperative and cooperative union database, relevant databases and technical infrastructure systems.
2. The national cooperative information system shall be established consistently from central to local government; must be standardized for updating, use and management of information therein using information technology.
3. The Minister of Planning and Investment of Vietnam shall issue regulations on information, update, use and management of the national cooperative information system.
Article 14. Disclosure of information to members of cooperatives and cooperative unions
1. A cooperative or cooperative union shall be required to disclose the following information to its members, including:
a) Its charter and internal regulations;
b) Resolutions of the GMM, Board of Directors, and decisions issued by the Director (General Director);
c) List of official/contributing members, in which holding of each member must be specified;
d) Annual financial statements;
dd) Information on management and use of its undistributed fund and undistributed assets;
e) Information on education, training and re-training for its members and employees;
g) Other information to be disclosed as prescribed by its charter.
2. The cooperative or cooperative union must openly post the information specified in Clause 1 of this Article at its head office within 05 working days from the issuance date of the document containing such information, and provide such information for its members when requested. Information must be posted for a minimum of at least 30 days from the posting date.
Article 15. Register of members of cooperatives and cooperative unions
1. Register of official/contributing members of a cooperative or cooperative union is a physical or electronic document which shall inter alia contain the following information:
a) Name, code and head office’s address of the cooperative or cooperative union;
b) Full name, contact address, nationality, personal identification number or legal document number of members that are individuals; names, EID numbers or legal document numbers and head office’s address of members that are organizations;
c) Stakes, holdings, contribution time, types of contributed assets, quantity and value of each type of contributed assets of each member;
d) Number and issuance date of capital contribution certificate of each member.
2. The compilation of the register of non-members shall be subject to the decision of the cooperative or cooperative union.
Article 16. Classification of cooperatives
1. Cooperatives shall be classified into micro, small, medium and large cooperatives according to the number of their official members and one of the following two criteria:
a) Revenue;
b) Total capital.
2. Micro, small, medium and large cooperatives shall be determined according to their scope of operation.
3. The Government shall elaborate this Article.
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