Chương 3 Nghị định 111/2007/NĐ-CP: Tổ chức doanh nghiệp theo hình thức công ty mẹ - công ty con

Chapter 3:

ENTERPRISE ORGANIZATION ACCORDING TO FORM OF PARENT- SUBSIDIARY COMPANIES

ITEM 1: FORM OF PARENT- SUBSIDIARY COMPANY THAT PARENT COMPANY IS THE STATE-OWNED COMPANY

Article 18. Subjects and duration of application of the parent– subsidiary company form that the parent company is state-owned company

Regulations on the form of parent - subsidiary company that the parent company is state-owned company mentioned in this Item shall apply only to the state-owned corporations, independent accounting member company of the state-owned corporation, independent state-owned company has been converted to the form of parent - subsidiary company under the Decree No.153/2004/ND-CP August 09, 2004 of the Government on organization and management of the state-owned corporation and conversion of state-owned corporation, independent state-owned company into the form of parent - subsidiary company. The time limit of appliction is from the effective date of this Decree to July 01, 2010.

Article 19. The corporation in the form of parent - subsidiary company that the parent company is the state-owned company

1. The corporation in the form of parent - subsidiary company is the form of associateding and mutual dominance by investment, capital contribution, trade secret, trademark or market between the enterprises with legal entity status, including a state-owned company holding right to dominate other member units (called as the parent company for short) and other member enterprises to be dominated by parent company (called as subsidiary company) or having a non-dominant contributed capital of the parent company (called as associated company).

2. The combination of parent company and subsidiaries has no legal entity status. The parent company has legal entity status, its own name, seal, managerial and administrative apparatus with head office in the country.

Article 20. The structure of the corporation in the form of parent - subsidiary company that the parent company is state-owned companies

The corporation in the form of parent - subsidiary company operating under this Decree has the organizational structure as follows:

1. Parent company is the state-owned company, operating under the Law on State-owned Enterprises and this Decree; formed from the conversion, organization of corporation, independent accounting member company of the corporation, the independent state company or on the basis of an investment company, to purchase shares or contribute capital and other resources in the subsidiaries, associated companies.

2. The subsidiaries:

a) Companies with dominant contributed capital of the parent company include: limited liability companies with two or more members, shareholding companies and overseas companies.

b) One member limited Liability Company owned by the parent company.

If the structure of corporations in the form of parent - subsidiary company has type of subsidiary to be one member limited liability company, it must have type of subsidiary as defined in point a clause 2 of this Article.

3. Parent company may have the associated companies to be companies with non-dominant contributed capital of its parent company, organized in the form of Limited Liability Company with two or more members, Shareholding Company, overseas company.

Article 21. The functions and managerial structure of the parent company being state-owned companies

1. The parent company has functions of direct production, business and financial investments in other enterprises or only makes financial investments in other enterprises. The parent company has the rights and obligations of the state-owned companies as specified in Chapter III of the Law on State-owned Enterprises; to exercise rights and perform obligations of owners, members or shareholders in the subsidiaries and associated companies.

2. The parent company has managerial structure including the Management Board, Inspection Committee, General Director, the deputy Director, Chief Accountant and the assistant apparatus. The managerial apparatus of the parent company is the apparatus of the corporation.

Article 22. The Management Board of parent company being the state-owned company

1. Management Board of parent company has functions, duties and powers as the Management Board of the corporation decided to invest and set up by the State; has working regime, structure of members, implementation of duties and powers as specified in clause 1, point a clause 3, clause 4, 5 and 6 of Article 9 of this Decree and the specific duties and powers as follows:

a) To decide on strategy, a long-term plan, annual business plans, business lines of the parent company, dependent accounting units, and business units of parent company; decide on plans for business cooperation of parent company with its subsidiaries.

b) To decide on use capital of parent company for investment to establish the subsidiary to be one member limited liability company and purchase shares, contribute capital in other enterprises but not exceeding the investment capital level under competence to decide of the management Board as specified in point b clause 2 Article 30 of the Law on State-owned Enterprises and the provisions of relevant laws; decide on the reorganization, dissolution or conversion of ownership for the subsidiary to be the one member limited liability company with capital scale not exceeding the levels specified for the Management Board in investment to establish enterprises in accordance with the law regulations.

c) To decide on charter capital increase, transfer of part or all of charter capital of the one member limited liability company owned by the parent company for the other organizations and individuals as stipulated in Article 64 of Law on Enterprises.

d) To decide on application of the organizational, managerial structure of the members council or company chairman of the one member limited liability company, the number and member structure of the members council; to decide on appointment, dismissal, demotion and to decide the remuneration or salary for members of the members Council, the company president, inspector of the one member limited liability company. The members Council does not make rights and perform obligations of owners for contributed capital portion of subsidiaries in other companies.

đ) To exercise rights and obligations of shareholders and members in the companies with shares, contributed capital of the parent company.

e) To pass the annual financial statements of the parent company, one member limited liability company; consolidated financial statements, collective reports on annual business results and collective report on the management, administration of the enterprises in the form of parent - subsidiary company; to approve use plan of after-tax profit of one member limited liability company.

g) To inspect and supervise the chairman and members of the members council or company president and general director (director), inspector of the subsidiary to be one member limited liability company, directors of the dependent accounting member units, business units; the representative for the contributed capital portion of the parent company in another enterprise in the implementation of the functions and duties prescribed by the State-owned Enterprise Law, Enterprise Law and this Decree.

h) To exercise the other rights and duties under the provisions of the charter of parent company and related legislation.

2. Salary and bonus regime of the Management Board shall comply with the provisions of clause 7 Article 9 of this Decree.

Article 23. Parent company’s inspection committee being the State-owned company

Inspection committee is established by the Managent Board of the parent company, having structure, functions, tasks and regime of operation as stipulated in Article 10 of this Decree.

Article 24. General Director, deputy directors, chief accountant and the assistant apparatus

1. General Director, deputy general directors, chief accountant and assistant apparatus of the parent company have duties and powers as stipulated in Article 11 of this Decree:

2. Salary and bonus regime of General Director, deputy general directors and chief accountant shall comply with the provisions in clause 6 Article 11 of this Decree.

Article 25. The relationship between the parent company being state-owned company and subsidiary to be one member limited Liability Company

1. The parent company is the owner of one member limited liability company to be established newly by parent company or converted from independent state company, independent accounting member company of corporation. The parent company exercises rights and obligations of owner for one member limited liability company as defined in Article 64, Article 65 and Article 66 of the Enterprise Law, charter of the company and the provisions of the Government on the transformation of state-owned companies into one member limited liability company.

2. One member limited liability company is organized and operates under the Enterprise Law, the provisions of the Government on the transformation of state-owned companies into one member limited liability company and the relevant law provisions.

Article 26. The relationship between the parent company to be state-owned companies and subsidiaries being shareholding companies, limited liability companies with two or more members and overseas companies

1. Subsidiaries are shareholding companies, limited liability companies with two members or more, overseas companies having dominant shares, contributed capital of its parent company founded, organized and operating under the Law on Enterprises, foreign laws and related law regulations.

2. Parent company takes rights, performs obligations and responsibilities of shareholders, members, the associated venture party, dominant capital-contributing party under provisions of law and charter of the shareholding company, dominant contributed capital of the parent company.

3. The parent company directly manage shares, dominant contributed capital in shareholding companies, limited liability companies and overseas companies; has the rights and obligations to shares, dominant contributed capital under the provisions in Article 58 of the Law on State-owned Enterprises.

Article 27. The relationship between the parent company being state-owned companies and associated companies

The parent company implements its right to manage contributed capital portion in the associated companies under the provisions of Article 59 of the Law on State-owned Enterprises.

Article 28. The responsibility of the parent company being state-owned companies

The responsibility of the parent company for its subsidiaries in the case of parent companies abuse the position holding the entire charter capital or holding dominant shares, contributed capital to harm the interests of the subsidiaries, the creditors and relevant parties is conducted as to the corporations specified in Article 17 of this Decree.

ITEM 2: FORM OF PARENT - SUBSIDIARY COMPANY THAT PARENT COMPANY IS ONE MEMBER COMPANY LIMITED OWNED BY THE STATE

Article 29. Applicable subject of form of parent - subsidiary company that parent company is one member company limited owned by the state

1. State-owned corporation, the independent accounting member companies of State-owned corporation, independent state-owned company reorganized and converted upon the form of parent - subsidiary company in which the parent company is one member limited liability company owned by the State.

2. State-owned companies are subject to change to the form of one member limited liability company owned by the State; being the parent company of: the corporation due to the companies invest in by themselves and establish, the combination of the parent - subsidiary companies, economic group decided to establish by the Prime Minister.

3. One member limited liability company owned by the State to implement investment, purchase shares, contribute capital in other enterprises and play the role of being the parent company of such enterprises according to clause 15 Article 4 of the Enterprises Law.

Article 30. Parent company to be one member company limited

1. The parent company exercises the rights and obligations of one member limited liability company member being the organizations defined in Item II Chapter III of the Enterprise Law.

2. The parent company has direct business, production functions and financial investment in the other enterprises or only implements financial investment in the other enterprises.

3. Based on the characteristics, size, number of subsidiaries operating in the domestic and abroad areas, the owner of the company decide on the managerial, organizational structure the of the parent company under the model of the members council, General Director (Director), Inspectors or model of the company President, Director and Inspectors.

Article 31. Subsidiaries, associated companies

1. Subsidiaries are those who meet one of the following conditions:

a) Being hold 100% of charter capital by the parent company.

b) Being hold dominant shares, contributed capital by the parent company (over 50% of charter capital or total common shares issued by companies).

c) Being directly or indirectly appointed by the parent company majority or all members of the Management Board, General Director (Director) of the company.

d) Being decided on amendment, supplementation of charter of the company by the parent company.

2. The subsidiaries may be organized in the form of one member limited liability company, limited liability companies with two or more members, shareholding companies, overseas subsidiaries; operate under the Law on Enterprises, foreign laws, relevant law regulations and charter of the company.

3. The parent company may have the associated companies being the companies organized in the form of limited liability companies with two or more members, shareholding companies, overseas companies under the Enterprise Law, the foreign laws and relevant law regulations. The associated companies are the companies not subject to the provisions in clause 2 of this Article, but having the long term relationships on economic benefits, technology, markets and business services different from the parent company.

Article 32. The relationship between parent company and subsidiary company, associated company

1. Parent company takes the rights and performs obligations of owners for one member limited liability company owned by parent company under the provisions in clause 1 Article 39, clause 1 Article 64, Article 65 and Article 66 of the Enterprise Law, charter of the company and the provisions of the Government on the conversion of state-owned companies into one member limited liability company.

2. The parent company directly exercises their rights and obligations of shareholders or members in the subsidiaries, associated companies of the parent company. The exercise of dominant rights of the parent company in the subsidiaries being shareholding companies, limited liability companies with two or more members, overseas subsidiaries in accordance with provisions of the Enterprise Law, charter of the company which has dominant shares, contributed capital of the parent company and the guidance of State owner on management of dominant shares, contributed capital of the State.

3. The cmpanies having no contributed capital of its parent company, volunteering to participate in the form of parent - subsidiary company, shall be subject to the constraints on the rights and obligations with the parent company and other subsidiaries under association contracts or by agreement between parent company and company volunteering to participate in.

Article 33. Obligations of parent company, subsidiary company

1. The parent company, subsidiary is obliged to implement the financial statements of the group of companies as defined in Article 148 of the Enterprise Law; to implement contracts, transactions and other relations as stipulated in clause 2 Article 147 of the Enterprise Law and other provisions of relevant law.

2. Where the parent company abuses its position to intervene beyond the authority of the owner, member or shareholder harming the interests of the subsidiaries, the concerned parties, the parent company and relevant parties must take responsibility as stipulated in clause 3, 4, 5 and 6 of Article 147 of the Enterprise Law and other provisions of relevant law.