Chương 4 Nghị định 153/2004/NĐ-CP: Chuyển đổi, tổ chức lại theo mô hình công ty mẹ - công ty con

Chapter IV

TRANSFORMATION, REORGANIZATION AFTER THE PARENT COMPANY-SUBSIDIARY COMPANY MODEL

Article 28.- Purposes of transformation, reorganization of corporations invested and set up under the State's decisions, corporations' independent cost-accounting member companies, independent State companies after the parent company-subsidiary company model

1. The transformation and reorganization of corporations invested and set up under the State’s decisions into corporations after the parent company-subsidiary company model aim to shift from the administrative association through the capital assignment mechanism to the stable association mostly through the financial investment mechanism; to clearly determine the interests and responsibilities related to capital and economic interests between parent companies and subsidiary companies and associated companies; enhance the business capabilities of the associating units, and create conditions for their development into economic conglomerates.

2. The transformation and reorganization of independent State-owned companies or corporations' independent cost-accounting member companies after the parent company-subsidiary company model aim to create conditions for the development of the business capabilities, scale and scope of companies, promote the capital accumulation, the utilization of financial potentials and other resources of companies for investment, capital contribution and association with other enterprises, accelerate the equitization of member units of companies.

Article 29.- Subjects to be transformed or reorganized

1. The following subjects that meet the conditions prescribed in Article 30 of this Decree shall be reorganized and transformed after the parent company-subsidiary company model:

a/ State corporations set up under the 1995 Law on State Enterprises.

b/ Corporations invested and set up under the State's decisions under the 2003 Law on State Enterprises.

c/ Independent cost-accounting member companies of corporations invested and set up under the State's decisions.

d/ Independent State companies.

2. State corporations, State corporations' independent cost-accounting member companies and independent State companies, which have made investments in, or contributed capital to, other enterprises or have completely transformed their member units and are structured to be composed of a State company holding dominating powers over other enterprises, subsidiary companies and associated companies in line with the structure prescribed in Article 55 of the 2003 Law on State Enterprises, shall not have to undergo the transformation or reorganization according to the process and procedures prescribed in this Chapter. The persons who have issued decisions to set up State corporations, State corporations' independent cost-accounting member companies or independent State companies shall decide to apply the parent company-subsidiary company model to these corporations and companies.

Article 30.- Conditions for transformation and reorganization

1. State corporations must fully meet the following conditions:

a/ All of their member units have been transformed, are being transformed or have been listed and have their plans approved by competent authorities for equitization or transformation into State-owned one-member limited liability companies in order to form the structure composed of a parent company, subsidiary companies and associated companies.

b/ Parent companies are on the Prime Minister-approved list of those where the State continues to hold 100% of their charter capital and which operate under the Law on State Enterprises.

c/ Parent companies have big capital amounts, are able to use their existing capital sources or have viable plans to mobilize capital and invest sufficient capital in their subsidiary companies and associated companies in order to dominate their subsidiary companies, use technological know-how, trademarks and markets to dominate their subsidiary companies.

d/ Corporations have development potentials, are able to conduct multiple business lines one of which is the major business line, have many dependent units inside and outside the country.

2. Independent State companies, corporations' independent cost-accounting member companies must fully meet the following conditions:

a/ Being possible to be organized into parent companies with big capital amounts or able to use their financial potentials, technological know-how, trademarks and markets to make capital investments in other enterprises in order to dominate them.

b/ Parent companies on the Prime Minister-approved list of those where the State continues to hold 100% of their charter capital and which operate under the Law on State Enterprises.

c/ Having dominant shares or dominant contributed capital in many other enterprises or having obtained the approval of the Prime Minister (for member enterprises of corporations set up under the Prime Minister's decisions), ministers or provincial-level People's Committees (for independent State companies) for the plans on equitization of their sections (excluding sections constituting the parent companies) or for the plans on investment, contribution of over 50% of the companies' charter capital to other companies in order to hold dominant shares or dominant contributed capital in these companies.

3. Corporations, independent State companies, corporations' independent cost-accounting member companies which fail to satisfy the conditions stated at Point b of Clause 1, Point b of Clause 2 of this Article may be transformed into the following kinds of parent companies to operate under the Law on Enterprises:

a/ Parent companies being one-member limited liability companies with 100% of State capital.

b/ Parent companies being limited liability companies with two or more members with 100% of State capital.

c/ Parent companies being limited liability companies with two or more members, where the State contributes dominant or non-dominant capital.

d/ Parent companies being joint-stock companies with 100% of State capital.

e/ Parent companies being joint-stock companies where the State contributes dominant or non-dominant capital.

Article 31.- Modes of transformation, reorganization of corporations or corporations' State-owned one-member limited liability companies after the parent company-subsidiary company model

1. Corporations which are prescribed at Points a and b, Clause 1 of Article 29 and meet the conditions prescribed in Clause 1, Article 30 of this Decree, depending on the nature of business lines, technologies, relationships in terms of business, capital investment and interdependence between corporations and their member units and among member units, may be reorganized by the following modes:

a/ The corporations' administration offices and managerial offices, dependent cost-accounting member units, non-business units together with one or a number of independent cost-accounting member companies holding the key position in the corporations or operating in the corporations' major business domains shall be reorganized into parent companies. In case of transformation or reorganization of big corporations and if it is deemed unnecessary to merge one or a number of independent cost-accounting member companies into parent companies, the corporations' administration offices and managerial offices, dependent cost-accounting member units and non-business units may be organized into parent companies.

Enterprises where the corporations contribute dominant capital and member units where the corporations invest the whole of their charter capital, after being transformed into one-member limited liability companies or companies with dominant contributed capital shall become subsidiary companies; enterprises having a capital portion of the corporations shall become associated companies of the parent companies.

b/ For the case of transformation of entire-branch cost-accounting corporations, the corporations' offices and managerial agencies as well as dependent cost-accounting member companies holding the key position in the corporations or operating in the corporations' major business domain shall be reorganized into parent companies.

Enterprises where the corporations contribute dominant capital and member units where the corporations invest the whole of their charter capital, after being transformed into one-member limited liability companies or companies with dominant contributed capital shall become subsidiary companies; enterprises having a capital portion of the corporations shall become associated companies of the parent companies.

2. For corporations' independent cost-accounting member companies which meet all conditions prescribed in Clause 2, Article 30 of this Decree, depending on the characteristics of their technologies, degree of dependence and the investment relationships already established with the parent companies, they may be split into independent State parent companies or continue to be part of the structures of the corporations.

Where corporations shift to operate after the parent company-subsidiary company model, if the independent cost-accounting member companies are transformed into parent companies but continue to be part of the corporations' structures, these member companies must be enterprises operating under the Law on Enterprises.

3. Non-business units, institutes and schools of corporations may, depending on the degree and requirement of association with the parent companies in terms of capital, finance, technologies, markets, research and training, be transformed into dependent cost-accounting sections of the parent companies or into subsidiary companies or associated companies.

For research institutes of corporations, which regularly apply research results and transfer technologies to production or business, have capital contributions in enterprises where the institutes apply their research results, if they satisfy all conditions on parent companies prescribed in Clause 2, Article 30 of this Decree, they may be separated from their corporations to become parent companies which may be either independent from, or part of, the corporations' structures.

Article 32.- Modes of transformation, reorganization of independent State companies after the parent company-subsidiary company model

Big independent State companies which fully satisfy the conditions prescribed in Clause 2, Article 30 of this Decree shall be transformed into parent companies; dependent cost-accounting units may, depending on the amount and nature of investment capital of independent State companies as well as the strategic importance of independent State companies, be transformed into one of the types of subsidiary companies prescribed in Clause 2, Article 19 of this Decree.

Article 33.- Competence and procedures for making and approval of transformation lists and plans

1. The ministries and provincial-level People's Committees shall draw up the lists and plans on the transformation of corporations and independent State companies set up under decisions of the ministries or provincial-level People's Committees. The Managing Boards of corporations set up under the Prime Minister' decisions shall make plans on the transformation of their corporations and the list of to be-transformed independent cost-accounting member companies of the corporations.

2. On the basis of the conditions prescribed in Article 30 of this Decree and the actual situation of corporations and corporations' independent cost-accounting member companies or independent State companies:

a/ The ministries or provincial-level People's Committees shall submit to the Prime Minister for approval the list and plans on the transformation of corporations, corporations' independent cost-accounting member companies and independent State companies set up under decisions of the ministries or provincial-level People's Committees.

b/ The Managing Boards of corporations set up under the Prime Minister's decisions shall submit to the Prime Minister for approval the plans on the transformation of corporations and the lists of to be-transformed independent cost-accounting member companies of their corporations.

Article 34.- Responsibilities of transformed corporations or State companies

1. Corporations, corporations' independent cost-accounting member companies, independent State companies (hereinafter called corporations, companies) which are selected, have their transformation lists and plans approved, and reorganized after the parent company-subsidiary company model shall have the responsibilities:

a/ To review every member unit, the whole corporations or companies, compare with the transformation conditions, determine the structures, modes of transformation, legal forms of the parent companies and of each type of subsidiary companies.

b/ To inventory, classify, determine all kinds of existing capital, assets, liabilities and labor; determine the projected total capital amounts of parent companies, the projected capital amounts to be invested by parent companies in each State-owned one-member limited liability company under their ownership and in enterprises where parent companies hold dominant or non-dominant capital; make financial statements up to the transformation time.

c/ To formulate the schemes on transformation, reorganization of corporations, companies after the parent company-subsidiary company model and the plans on the disposal of capital, assets, finance and labor upon transformation.

The transformation or reorganization schemes must contain at least the following contents: The actual situation of the business organization, management organization, production and business results of corporations and each member unit; the situation of finance, investment and capital contributions of corporations and each member unit in other enterprises, the projected structures, numbers and types of subsidiary companies and/or associated companies; the models, organizational structures, functions and tasks of parent companies; the modes of reorganizations or transformation, the tentative plans on the transformation after the parent company-subsidiary company model; the tentative plans on the transfer of interests, obligations, assets, liabilities, labor to parent companies and each subsidiary company; changes in production and business activities after the transformation.

d/ To formulate the draft charters of parent companies and subsidiary companies, clearly determining the relationships between parent companies and subsidiary companies.

2. Corporations, companies which have de facto formed the structures of member units meeting the conditions prescribed in Article 55 of the Law on State Enterprises shall not have to formulate transformation schemes but must only comply with the provisions of Point d, Clause 1 of this Article.

Article 35.- Submission, approval of transforma-tion schemes and transformation decisions

The submission, evaluation and approval of schemes shall comply with the following order and procedures:

1. The Prime Minister shall approve the transformation schemes of corporations and companies at the proposals of the evaluation councils which are set up under his/her decisions.

2. After the Prime Minister approves the transformation schemes, authorities competent to decide on the setting up of corporations or companies shall decide on the transformation; organize the implementation of the transformation schemes; approve the charters of parent companies; carry out other procedures regarding the transformation after the parent company-subsidiary company model.

3. A transformation decision must at least contain the following contents: The names, addresses and legal forms of the parent company, subsidiary companies and associated companies; the objectives, business lines and charter capital of the parent company; the amount and percentage of the parent company's capital in each subsidiary company and each associated company; responsibilities of the parent company and each subsidiary company for the inheritance of the rights and obligations and for the handling of matters existing and arising in the transformation process.

Article 36.- Principles for handling of capital, assets, finance and labor upon transformation

1. All assets of corporations, independent cost-accounting member companies, independent State companies upon transformation shall be calculated in value.

2. Existing assets under the ownership of corporations, independent cost-accounting member companies, independent State companies shall be inventoried and classified for determination of their quantities and actual conditions. Existing assets for the formation of assets directly managed by parent companies and assets delivered to subsidiary companies being State-owned one-member limited liability companies shall not be re-valued. For all cases of ownership transformation, assets must be re-valued at the market prices according to law provisions on ownership transformation.

3. For assets which are leased, borrowed, kept in custody for others or kept in consignment: Transformed or reorganized companies shall have to continue leasing, borrowing, keeping in custody for others or in consignment such assets according to the agreements with the asset owners.

4. Assets which are redundant, no longer needed, stockpiled, awaiting liquidation, lost or otherwise damaged shall be handled according to current law provisions.

5. Principles for handling liabilities

a/ For receivable liabilities of corporations, independent cost-accounting member companies, independent State companies which are transformed into parent companies and receivable liabilities of rearranged, reorganized or transformed member units of corporations, independent cost-accounting member companies or corporations' independent State companies: Parent companies and rearranged, reorganized or transformed member units of State corporations, independent State companies, independent cost-accounting member companies of State corporations shall have to receive and recover liabilities which are due and recoverable. For receivable liabilities which are irrecoverable, after clearly identifying the causes and responsibilities of collectives as well as individuals, the companies shall have to receive and recover debts and may cost-account as decrease in the owner's capital the difference between the value of losses and the amounts compensated by collectives and/or individuals.

b/ For payable liabilities, newly set-up parent companies, rearranged, reorganized or transformed member units of State corporations, independent State companies, independent cost-accounting member companies of State corporations shall have to inherit liabilities payable to creditors according to commitments, including tax arrears, debts owed to the budget as well as to officials, employees and workers; pay due debts according to the plans already approved by competent authorities. For payable liabilities which have no claimants and the value of assets whose owners are unidentifiable, they shall be included in the owner's capital in the parent companies and subsidiary companies newly set up through transformation. The handling of payable liabilities of member companies transformed into joint-stock companies shall comply with the regulations on equitization of State companies.

6. Parent companies and subsidiary companies set up on the basis of transformation or reorganization of member units of State corporations or independent State companies or State corporations' independent cost-accounting member companies shall have to continue employing the existing laborers, inherit all rights and obligations towards laborers according to the plans already approved by competent authorities and law provisions on rearrangement, reorganization, equitization and transformation of State companies into State-owned one-member limited liability companies; redundant laborers shall be handled according to the common policies in the course of renewal and rearrangement of State companies. Laborers who voluntarily terminate their labor contracts shall enjoy entitlements prescribed by labor legislation.

Article 37.- Principles for determining the charter capital of parent companies

1. The parent companies' charter capital formed from the transformation of corporations, corporations' independent cost-accounting member companies or independent State companies is the State-invested capital amount inscribed in the parent companies' charters, including:

a/ Actually existing State capital reflected in the accounting books at the time of transformation, which is cost-accounted centralizedly at the corporations, the corporations' independent cost-accounting member companies or independent State companies.

b/ The charter capital of State-owned one-member limited liability companies owned by corporations, corporations' independent cost-accounting member companies or independent State companies.

c/ State capital contributed by corporations, corporations' independent cost-accounting member companies or independent State companies to joint-stock companies, limited liability companies with two or more members, joint-venture companies involving foreign partners and overseas investment companies.

d/ State capital (if any) additionally invested in parent companies for the case of transformation of corporations or independent State companies; capital (if any) additionally invested by corporations into parent companies for the case of transformation of corporations' independent cost-accounting member companies.

e/ After-tax profits reinvested and additionally supplemented to the charter capital.

2. The charter capital of parent companies must not be lower than the capital level set in the criteria and list of classification of State companies and State corporations, promulgated by the Prime Minister.

a/ For parent companies transformed from corporations: their charter capital must not be lower than the capital level prescribed for State corporations.

b/ For parent companies transformed from corporations' independent cost-accounting member companies or independent State companies: Their charter capital must not be lower than the capital level prescribed for State companies.

3. When increasing or decreasing their charter capital, parent companies must promptly adjust their accounting balance sheets accordingly and register such with the business registration agencies.

Article 38.- Business registration and asset re-registration

1. Parent companies and subsidiary companies, after transformation, must make re-registration according to law provisions applicable to their legal forms.

2. Member companies which, before transformation, are one-member limited liability companies or joint-stock companies or joint-venture companies shall not have to make re-registration.

3. Parent companies may be named as company or use the corporations' common names. Where corporations' independent cost-accounting member companies are transformed after the parent company-subsidiary company model, the parent companies transformed from independent cost-accounting member companies must not be named as corporation.

4. After being granted the business registration certificates, parent companies and subsidiary companies must fill in the procedures to register the ownership of assets transferred from corporations or member units with competent State bodies. All assets whose ownership is transferred from corporations or member units to parent companies or subsidiary companies shall not be subject to registration fee.

Article 39.- Take over of rights and obligations of transformed corporations

Parent companies and member units which are reorganized from the transformation of corporations invested and set up under the State's decisions shall have to inherit all the rights, legitimate interests as well as obligations of the transformed corporations or member companies.

Article 40.- The State-owner's rights over and obligations towards parent companies after transformation

1. Parent companies which meet, and are transformed under, the conditions prescribed in Clause 1 and Clause 2, Article 30 of this Decree, after having completely gone through transformation, shall continue operating under the Law on State Enterprises. The State-owner shall exercise the owner's rights over, and the owner's obligations towards, parent companies under the provisions of Articles 64, 65, 66 and 67 of the Law on State Enterprises.

2. For parent companies which are transformed under the conditions prescribed in Clause 3, Article 30 of this Decree and operate under the Law on Enterprises or the Law on Foreign Investment in Vietnam, the State-owner shall exercise its rights over, and its obligations towards, its capital invested in the parent companies under the provisions of Articles 70, 71 and 72 of the Law on State Enterprises.