Chapter II
DEALING WITH FINANCES ON EQUITIZATION
Article 9. Responsibilities of enterprises undergoing equitization to deal with existing financial issues
An enterprise undergoing equitization shall be responsible, on its own initiative, to co-ordinate with the relevant agencies to deal in accordance with authority and in accordance with regulations with existing financial issues prior to valuing the enterprise to be equitized and throughout the equitization process. In cases of difficulties or in cases outside authority, the enterprise undergoing equitization must report to the competent agency for the latter's consideration and resolution.
Article 10. Dealing with leased or borrowed assets, assets received as joint venture capital contribution, joint assets, assets not required to be used and investments funded by the reward and welfare funds
1. Assets which an enterprise leases, borrows or receives as joint venture capital contribution, and joint assets and other assets which do not belong to the enterprise shall not be included in the value of the enterprise to be equitized. Prior to conversion to a shareholding company, an enterprise must liquidate contracts or agreements with owners of assets in order for the equitized company to inherit the previously-signed contracts or sign new ones.
2. With respect to assets of an enterprise which are not required to be used, idle stock and assets awaiting liquidation, the enterprise shall liquidate, transfer or sell them, or report to the competent agency to transfer them to another unit in accordance with current regulations. If these assets have not been dealt with by the time of valuation of the enterprise, they shall not be included in the value of the enterprise. During the equitization process the enterprise shall continue to deal with these assets, and if these assets have still not been dealt with by the time of the decision announcing the valuation of the enterprise then they shall be transferred to a company specializing in the purchase and sale of debts and idle stock for such company to realize in accordance with law.
3. With respect to assets belonging to welfare buildings such as kindergartens, nurseries, dispensaries and other welfare assets from investments funded by the reward and welfare funds, they shall be transferred to the shareholding company for management and use for the benefit of the labour collective of the enterprise.
In particular with respect to residences of staff and officials, including residences funded by the State budget, they shall be transferred to the local land and housing authority for management or sold to their current users in accordance with current regulations.
4. With respect to assets of the enterprise being investments funded by the reward and welfare funds and which the shareholding company continues to use for production and business, they shall be included in the value of the enterprise undergoing equitization and converted into shareholding to be divided amongst employees of the enterprise at the time of equitization in accordance with the actual period of work of each person at the enterprise.
Article 11. Debts receivable
1. An enterprise undergoing equitization shall be responsible to review, confirm and recover debts which are due and receivable prior to equitization. If, by the time of valuation of the enterprise, there are still arrears of bad debts, they shall be dealt with in accordance with current regulations of the State on dealing with arrears of bad debts.
2. By the time of the decision announcing the valuation of the enterprise, the enterprise undergoing equitization shall be responsible to transfer all irrecoverable debts which have been excluded from the valuation of the enterprise (together with files on the debts and other relevant data) to a company specializing in the purchase and sale of debts and idle stock from enterprises in order for such company to realize in accordance with law.
3. With respect to items paid in advance to suppliers of goods and services such as rent for housing or land, purchase price of goods and wages, these items must be reviewed and included in the value of the enterprise.
Article 12. Debts payable
1. An enterprise must mobilize funds to pay debts which mature prior to conducting equitization, or it must agree with creditors on the method of dealing with the debts or on the conversion thereof into shareholding capital contribution.
The conversion of debts into shareholding capital contribution shall be determined on the results of a share auction, or the enterprise and a creditor shall reach agreement in order to fix a price for participating in an auction.
2. If during the equitization process the enterprise is in difficulty regarding ability to pay overdue debts because business incurred losses, the debts shall be dealt with in accordance with current regulations of the State on dealing with arrears of bad debts.
Article 13. Reserves, losses or profits
1. Reserves for reduction of price of goods in stock, for bad debts, for reduction of value of securities, and for exchange rate differences shall be accounted for in the business results of the enterprise.
2. The enterprise undergoing equitization shall use reserves for retrenchment allowances to pay to employees who are retrenched during the equitization process, and if not so paid then such reserves shall be accounted for in the business results of the enterprise.
3. Reserves for risks and professional reserves within the banking and insurance systems or of financial organizations shall be transferred to the shareholding company to continue to manage.
4. The balance in financial reserves to cover losses (if any) and in financial reserves to cover damage to assets and irrecoverable debts shall be included in the value of the portion of State owned capital in the enterprise undergoing equitization.
5. The balance in reserves of profits generated in order to cover previous years' losses (if any) and in reserves to cover losses being assets not required to be used, assets awaiting liquidation, reduction in the value of assets, and debts which the enterprise does not have the ability to collect shall be distributed in accordance with current regulations prior to valuation of the enterprise to be equitized.
6. The enterprise undergoing equitization shall use financial reserves and pre-tax profits to cover losses calculated up until the time of equitization and conversion of the enterprise into a shareholding company. If the enterprise lacks [such reserves] then it shall take measures to write off its debts to the State budget, bank debts and debts to the Development Assistance Fund in accordance with current regulations of the State on dealing with arrears of bad debts.
If after applying all the above measures an enterprise still suffers a loss, the enterprise shall deduct the loss from the portion of State owned capital.
Article 14. Long-term investment capital in other enterprises such as joint venture capital contribution, associated ventures, shareholding capital contribution, capital contribution to establishment of limited liability companies and other forms of long-term investment
1. If the enterprise undergoing equitization inherited long-term investment capital which a State owned company invested in other enterprises, then the whole of such capital shall be included in the value of the enterprise undergoing equitization in accordance with the principles stipulated in article 20 of this Decree.
2. If the enterprise undergoing equitization does not inherit the long-term investments made in other enterprises, then the enterprise must report [such investments] to the competent agency to deal with them as follows:
(a) Reach agreement on sale of the investment capital to another partner/entity or to other investors;
(b) Transfer them to another enterprise to act as partner/entity.
Article 15. Cash balance in reward funds and welfare funds
Any cash balance in reward funds and welfare funds shall be distributed to the current workforce in the enterprise for the purpose of purchase of shares. Employees shall not be required to pay income tax on such item of income.
Tìm kiếm
Nghị định 187/2004/NĐ-CP (Bản Word)