Chương 4 Nghị định 80/2005/NĐ-CP: Khoán kinh doanh và cho thuê công ty

Chapter IV

BUSINESS CONTRACTING AND LEASE OF COMPANIES

SECTION I. BUSINESS CONTRACTING

Article 31. Business contracting contents, targets and conditions

Business contracting contents, targets and conditions

Based on the characteristics of each branch and business results of companies, the business contracting deciders shall specify business-contracting contents, targets and conditions but must take into account the following requirements:

1. Preserving the state capital.

2. Ensuring jobs and fully paying insurance premiums for laborers. 3. Increasing profits or reducing losses of the companies.

4. Implementing the State's policies and the signed contracts.

Article 32. Bidding for or organizing the acceptance of business contracting by mode of direct negotiations

Bidding for or organizing the acceptance of business contracting by mode of direct negotiations

1. The agencies that decide to contract companies must publicly announce on the mass media and notify the companies of the decisions to permit the contracting and organize the registration of applicants for contracting within 45 days. If past the 45-day time limit there is only one registrant, the registration time limit must be prolonged for 15 days.

The company directors shall announce to the entire laborers in the companies, organize the registration for company contracting and send the lists of registrants to the Enterprise Renewal and Development Boards of ministries, provincial-level People's Committees or state corporations.

2. In cases where there is only one registrant for company contracting, direct negotiations on contracting contents, targets and conditions shall be organized. The business-contracting contents and conditions, the specific rights and obligations of the contracting parties; the contractual contents must be negotiated and agreed upon between the business contracted persons and the business contractors.

3. In cases where there are two or more registrants, bidding must be organized. The company contracting deciders shall set up the Bidding Councils which shall notify the registrants for business contracting the time limit for submission of bid dossiers, the minimum price level, the deposit amount and announce on the mass media and post up at the companies' headquarters the bidding for company contracting.

4. The contracting registrants file their dossiers of tender for company contracting and pay deposits to the Bidding Councils.

The Bidding Councils receive the dossiers and deposits, make lists of bidders and issue certification of participation in bidding.

Bidders may go to the companies to study the accounting books, lists of assets and survey the actual situation of the companies; shall be supplied by the Bidding Councils with information on bidding regulations and bid-marking principles.

5. Within the time limits defined in Clause 1 of this Article, the company contracting registrants must send the dossiers of application for participation in the bidding to the Bidding Councils.

Such a dossier shall include:

a) The application for business contracting, clearly stating the full name, address, the number of people's identity card, the serial number of bank account (if any), the business registration certificate of the business-contracted person;

b) The business contracting contents, mode, targets, conditions and time limit;

c) The scheme on employment of laborers currently working in the company;

d) The proposed contracting level;

e) The report on financial capability of the business-contracted person.

6. Within 15 days after the expiry of the time limit for reception of dossiers, the Bidding Councils shall send the notices on the bidding time and venue to every bidder and publicly post up the list of bidders at the bidding venue for 5 days before bid opening.

7. Bids shall be opened within one day as follows:

a) The Bidding Councils shall check the seals and publicly open the envelops of each bidder and publicize the scheme on labor employment, bid price offered by each bidder for inscription in the records; publicize the scheme on the most labor employment and the highest bid price of each bidder;

b) The presidents of the Bidding Councils and bidders shall sign the records on bid opening.

8. Bid consideration:

a) The Bidding Councils shall examine, analyze, assess and rank bid dossiers or hire counseling organizations with such function to perform the job; base themselves on the highest bid price in combination with the labor employment scheme to select bid winners;

b) The Bidding Councils shall make records on bid consideration and send them to the Enterprise Renewal and Development Boards and the company contracting deciders.

Article 33. Business contracting contracts

Business contracting contracts

A business contracting contract shall cover the following principal contents:

1. Names and addresses of the state company subject to business contracting and the business-contracted person.

2. The contracting contents, mode, targets, conditions and duration.

3. The rights and responsibilities of the parties in the course of contracting; the contracting duration shall be agreed upon by the two parties but must not be less than 3 years; the termination of contracts ahead of time.

4. The handling of contractual breaches, changes affecting the interests and obligations of the contracting and contracted parties; commendation, reward and penalties in the course of contracting.

5. Other contents related to business contracting.

Article 34. Rights and obligations of business-contracted persons

Rights and obligations of business-contracted persons

1. To manage and use the capital and assets and receive laborers of the companies under the provisions of the contracts on business contracting in accordance with legal provisions; to inherit rights and obligations of the companies.

2. To decide on business organization, mode of salary and bonus payment in the companies.

3. To enjoy and decide by themselves the distribution of incomes in excess of the contracting level. For profits in excess of the contracting levels, after offsetting the previous years' losses under the provisions of the Enterprise Income Tax Law, paying the enterprise income tax, making up for the profits in deficit of the business contracting targets of the previous years and deducting for reserve funds, the business-contracted persons may take initiative in using the remainder.

4. To have their incomes reduced if failing to achieve the contracting targets and requirements inscribed in the contracting contracts; in case of business losses entailing the loss of state capital or contractual breaches leading to losses, to pay compensations therefor.

5. To have assets mortgaged, pledged, deposited as security collateral, escrow account or to be guaranteed for performance of contracts.

Article 35. Rights and obligations of business contracting deciders

Rights and obligations of business contracting deciders

1. To inspect and monitor the realization of commitments in the contracts for business contracting, handle cases of breaching the commitments inscribed in the contracts.

2. Not to intervene in the administration by the business-contracted persons; to create favorable conditions for them to fulfill their commitments inscribed in the contracts for business contracting.

SECTION II. LEASE OF COMPANIES

Article 36. Forms of leasing companies, notifying decisions on lease of companies and registration for lease of companies

Forms of leasing companies, notifying decisions on lease of companies and registration for lease of companies

1. The lessees may opt to lease companies in the following forms:

a) Lease of assets of companies: Leasing assets constituting the production and business establishments of the companies, which is accompanied with the hiring of laborers of the companies, but not inheriting the rights and obligations of the leased companies;

b) Lease of operational companies: Leasing assets constituting the production and business establishments of the companies, which is accompanied with the hiring of laborers of the companies while inheriting debts, economic contracts and other rights and obligations of the companies under the agreements of the concerned parties.

2. The agencies deciding on the lease of companies must publicly announce on the mass media and notify the companies of the decisions on lease and organize the registration of lease applicants within 45 days. If past the 45-day time limit, there is only one registrant, such time limit must be prolonged for 15 days; if there is still only one registrant after the prolongation, the companies shall be leased by mode of direct lease.

The company directors shall notify such to the laborers in the companies, organize the registration for lease of companies and send the lists of registrants to the Enterprise Renewal and Development Boards of ministries, provincial-level People's Committees or state corporations.

Article 37. Leasing companies by mode of bidding

Leasing companies by mode of bidding

1. In cases where there are two or more registrants for lease, a bidding must be held.

2. The company lease deciders shall set up the Bidding Councils which shall notify the lease registrants of the time limit for bid submission, the minimum price level, the deposit amount, publicly announce on the mass media and post up at the companies' head-quarters the bidding for company lease.

3. The lease registrants shall submit their bids for company lease and deposit money to the Bidding Councils.

The Bidding Councils shall receive bid dossiers, deposit money, make lists of bidders and issue certification of participation in the bidding.

4. The bidders may go to the companies to study the accounting books, lists of assets and survey the actual situation of the companies; be supplied by the Bidding Councils with information on bidding regulations and bid-marking principles.

5. Within the registration time limit specified in Clause 2, Article 36 of this Decree, as from the date of notifying the registration for participation in bidding, the company lease registrants must send bid dossiers to the Bidding Councils.

Such a dossier comprises:

a) The lease application clearly stating the full name, address, serial number of people's identity card, the number of bank account (if any) and the business registration certificate of the lessee;

b) The leasing form and duration;

c) The scheme on employment of laborers working in the company;

d) The proposed company leasing price;

e) The report on financial capability of the lessee.

6. Within 15 days after the expiry of the time limit for reception of dossiers, the Bidding Councils shall send notices on the bidding time and venue to every bidder and publicly post up lists of bidders at the bidding venue for 5 days before bid opening.

7. The bid opening shall be conducted within one day as follows:

a) The Bidding Councils shall check the seals and publicly open the envelope of each bidder and announce the labor employment scheme, bid offer of each person for inscription in the records; announce the highest labor employment scheme and the highest bid price of each bidder;

b) The presidents of the Bidding Councils and bidders sign the records on bid opening.

8. Bid consideration:

a) The Bidding Councils shall consider, analyze, assess and rank bid dossiers or hire counseling organizations with such function to perform the job; base themselves on the highest bid prices and the labor employment schemes to select bid winners;

b) The Bidding Councils shall make records on bid consideration and send them to the Enterprise Renewal and Development Board and the company lease deciders.

Article 38. Leasing companies by direct mode

Leasing companies by direct mode

1.The leasing of companies by direct mode shall be conducted when there is only one registrant for lease.

2. The lease registrants may go to the companies to study the accounting books, asset inventories and survey the actual conditions of the companies' assets.

3. The lease registrants shall file their dossiers of application for company lease to the Enterprise Renewal and Development Board. The dossier contents shall be the same as for the case of leasing companies by mode of bidding.

4. The Enterprise Renewal and Development Board shall, together with the company directors, have the tasks:

a) To draw up schemes on company lease, including scheme on rearrangement of laborers of the companies;

b) To set the starting, leasing price for use as basis for negotiation and agreement with the lessees;

c) To directly discuss with the lessees on labor employment schemes, leasing prices, leasing duration and terms of the company lease contracts;

d) To negotiate with the lessees on the leasing prices and the company lease contracts;

e) To submit dossiers, records and draft contracts to lease deciders.

Article 39. Responsibilities of leased state companies

Responsibilities of leased state companies

1. To inventory and classify all the assets existing in the companies, the rented assets, the leased assets, the borrowed assets, the kept-for-other or appropriated assets; to assess their actual conditions.

2. To compare and determine assorted debts, make lists of creditors and payable debts, lists of debtors and receivable debts, dividing them into recoverable debts and irrecoverable debts; the companies are obliged to handle the finance according to the financial regulation promulgated by the Government before deciding to lease the companies.

3. To make financial statement of the quarter next to the time of deciding on company lease.

4. To make lists of laborers of the companies and relevant dossiers of the laborers.

5. To hand over the assets, laborers, dossiers, and relevant books to the lessees under the agreement inscribed in the company lease contracts.

6. To manage books, documents and dossiers on assets and laborers of the companies in the leasing duration.

7. To fulfill obligations towards the State, to observe policies and regimes towards laborers according to legal provisions and company lease contracts.

8. To propose the lease deciders to terminate the leasing contracts ahead of time (if the lessees breach the contracts).

Article 40. Principles for handling of assets, finance of the companies upon the lease thereof

Principles for handling of assets, finance of the companies upon the lease thereof

The assets, finance and debts shall be handled upon the lease of companies as follows:

1. The existing assets of the companies shall be inventoried to determine their quantity and actual conditions, including fixed assets and long-term investments; working assets and short-term investments; ass8ets rented, borrowed, leased, kept for others, sold for others, consigned for sale, appropriated.

Assets rented, borrowed, kept for others, accepted for processing, consigned, appropriated shall be inventoried and classified separately.

2. The assets existing in the companies shall be classified and handled as follows:

a) The leased assets shall be classified and assessed in terms of their actual value, quality, technical properties and determined in term of practical value.

The practical value of leased assets shall be determined on the basis of accounting books of the companies at the time of lease, the lessees' use demands and the market prices at the time of lease.

The practical value of assets at the time of lease shall be used as basis for determining the company rentals;

b) The assets not on the list of leased assets must be handled before the lease in form of transfer, liquidation, sale or hired preservation pending the handling;

c) The working assets shall be agreed upon by the lessors and the lessees;

d) Assets formed from reward funds, welfare funds shall be transferred to labor collectives and managed by the companies' Trade Unions in cooperation with the employers. For the balances (if any) of reward and welfare funds, the directors and Trade Union Executive Committees in the companies shall have to draw up the schemes on handling byway of dividing them to laborers before signing contracts on handover of companies.

3. The companies shall have to settle the receivable and payable debts. If the lessees do not inherit the receivable and payable debts, the companies' remaining management sections tasked by the lease deciders to monitor the leasing contracts shall have to continue recovering the receivable debts and paying the payable debts.

4. In case of renting operational of companies: The lessors shall join the lessees in discussing with the relevant parties to reach agreement on inheritance of interests and obligations of the legal persons being the leased companies.

Article 41. Labor settlement upon company lease

Labor settlement upon company lease

1. The leased companies shall make lists of the existing number of laborers at the time of deciding on the lease, classify laborers and compile dossiers related to laborers:

a) The number of laborers subject to the implementation of social insurance policy;

b) The number of laborers enjoying social insurance for illness, pregnancy and maternity, labor accidents and occupational diseases;

c) The number of laborers for whom the performance of labor contracts is postponed;

d) The number of laborers for whom the labor contracts are terminated;

e) The number of laborers with labor contracts being still valid, who will continue working in the leased companies;

f) The number of laborers awaiting jobs due to unavailability of jobs arranged for them.

2. If the company lease is accompanied with the hiring of labor, the company lessees shall have to admit, arrange jobs for, and ensure interests of, laborers under leasing contracts not contrary to the provisions of labor law.

The company directors shall have to carry out procedures so that the social insurance agencies shall grant insurance books according to regulations and transfer the lists and dossiers of laborers being managed by the companies to the new enterprises.

3. For laborers entitled to social insurance regimes, the company directors and the social insurance agencies where the companies pay the insurance premiums shall settle interests for laborers according to the provisions of the Social Insurance Regulation.

4. For cases of terminating labor contracts, the company directors shall settle regimes and policies for laborers according to provisions of labor law and the policies towards laborers redundant due to reorganization of state enterprises.

5. In cases where companies are leased but the lessees refuse to employ all the existing laborers, the lease deciders and the leased companies shall have to arrange jobs for them or apply policies towards the remaining laborers.

Article 42. Principle for determining the company-leasing prices

Principle for determining the company-leasing prices

1. Company-leasing prices shall be determined on the basis of: leasing form, minimum leasing prices set by lease deciders, the real value of the company, the direct negotiation on rentals between the lessors and the lessees (in case of direct lease) or bid-winning prices (in case of bidding), but must not be lower than the minimum leasing prices set by the lease deciders.

2. The minimum leasing prices shall be determined on the following principles:

a) Ensuring the compensation for expenses for wear of leased assets;

b) Offsetting reasonable expenditures of the lessors in the course of organizing, managing and supervising the leased assets;

c) Calculating interests in the company-leasing prices, depending on the value and conditions of financial assets, technology, product quality, product salability; business situation and results of the companies before the lease:

- For companies doing business with profits: The interest portion in the company-leasing prices shall not be lower than the minimum profit level already attained before the lease.

- For companies doing business at a loss or without profits: when being leased, the profits shall not be calculated into the starting leasing price level.

Article 43. Decisions on lease of companies

Decisions on lease of companies

1. At the proposal of the Enterprise Renewal and Development Board, competent authorities shall issue company-leasing decisions.

2. A company-leasing decision shall comprise the following principal contents:

a) Names, addresses and account numbers of the leased company and the lessee;

b) The leasing contents, form, duration;

c) The leasing price and payment mode;

d) The tasks of the Enterprise Renewal and Development Board and the person authorized to sign the contract in the company-leasing organization;

e) Responsibilities of the leased company, the Enterprise Renewal and Development Board and relevant agencies in handling other existing and arising problems.

3. Company-leasing decisions shall be addressed to the offices of: Enterprise Finance; Tax, Business Registration, Labor, War Invalids and Social Affairs, the Statistical Departments of the localities where the companies are headquartered; and the Steering Committee for Enterprise Renewal and Development.

Article 44. Company-leasing contracts

Company-leasing contracts

The company-leasing contracts shall be signed by the lessees and the persons authorized by the lease deciders, comprising the following principal contents:

1. Names, addresses and account numbers of the leased companies and the lessees.

2. The company-leasing price and mode of paying rentals.

3. The company-leasing duration agreed upon the contractual parties but must not be less than 3 years; termination of leasing contracts ahead of time.

4. The rights and responsibilities of company lessors and lessees.

5. The handling of labor, assets, finance, the companies' rights and obligations to be inherited in case of teasing operation of companies.

6. The return or handling of companies upon the expiry of contracts.

7. Commitments of the contractual parties.

8. Principles for handling of arising problems, contractual disputes; handling of contractual breaches, changes affecting the interests and obligations of the lessees and the lessors; rewards and penalties in the leasing course.

Enclosed with leasing contracts are lists of assets owned by the companies, assessing the remaining values of such assets and the lists of laborers (in case of leasing operational companies).

Article 45. Payment of deposits and handover of companies

Payment of deposits and handover of companies

1. In case of leasing companies by mode of bidding, within 10 days as from the date of signing the company-leasing decisions, the Bidding Councils must pay the deposit money to the failing bidders. Bidders must not receive back their deposit money in the following cases: winning the bids but refusing to perform the contracts; withdrawing bid dossiers after bidding closure. The deposit money of bid winners shall be subtracted from the company rentals.

2. Within the time limit agreed in the contracts, the Enterprise Renewal and Development Board shall join the company leasing-contract signing persons and the company directors in organizing the handover of companies to the lessees.

Upon the handover, if the quantity and value of the companies' assets are at variance with the asset quantity and value inscribed in the contracts, the lessees may postpone the acceptance of the handover and request the adjustment of the signed contracts.

Article 46. Rights and obligations of company lessees

Rights and obligations of company lessees

Apart from the rights and obligations of the asset lessees, provided for in Section 5, Chapter II, Part Three of the Civil Code, the company lessees shall also have the following rights and obligations:

1. Rights of the company lessees:

a) To take initiative in managing and using the leased assets and laborers of the companies in service of business activities not contrary to the agreements in the contracts and legal provisions;

b) To change, reorganize production, make new investments, renew technologies, improve techniques, maintain, replace and repair assets damaged in the course of production and business activities. The replacement or sublease of assets must be consented by the lease deciders;

c) To decide by themselves the organization of the managerial apparatus, business, mode of payment of salaries and bonuses in the companies;

d) To enjoy interests brought about by the company lease after the fulfillment of obligations towards the State and the lessors;

e) To inherit all contracts on lease of land, ground, power and water supply of the leased state companies (if they have demands therefor).

2. Obligations of the company lessees:

a) To pay company rentals as agreed upon in the contracts;

b) To use assets for the right purposes agreed upon in the leasing contracts; not to use leased assets (excluding new investments of their own capital) for pledge or mortgage; not to sublease the land use rights;

c) To ensure that assets operate normally and in suitability with the degree of asset depreciation as agreed upon in the contracts;

d) To join the lessors in settling arising problems related to the rights and obligations under the contracts on land lease, power, water, materials and raw materials supply, product sale, labor contracts; to improve the working conditions for laborers and environmental hygiene;

e) To submit to the inspection and supervision of the use of leased assets by the lessors;

f) To perform other obligations defined in the company-leasing contracts.

3. Apart from the common rights and obligations specified in Clauses 1 and 2 of this Article, the lessees shall also have the following rights and obligations:

a) Where the company lessee is a state company, apart from the contractual rights and obligations as provided for in Clauses 1 and 2 of this Article and other legal provisions, after paying assorted taxes, such state company shall have the full right to use the profits earned from activities of the company it has leased;

b) Where the company lessees register their business under the Enterprise Law or the Cooperative Law, they may use the leased assets and labor for the business purposes under the mechanism defined for the registered types of enterprise while observing the provisions of the leasing contracts and the provisions in Clauses 1 and 2 of this Article;

c) Where the company lessees are labor collectives or individuals in the companies, they must have their own sources of capital, register the establishment of enterprises of the labor collectives or individuals and have the rights to use the leased state companies under the mechanism defined for the registered types of enterprise.

4. For company lessees who breach the contractual commitments thus causing losses to the leased companies, apart from the liabilities agreed upon in the leasing contracts, the lease deciders are entitled to terminate the contracts and compel the lessees to pay compensations for damage they have caused.

Article 47. Rights and obligations of company lease deciders and company-leasing contract signing persons

Rights and obligations of company lease deciders and company-leasing contract signing persons

1. The company lease deciders are entitled to direct the performance of company-leasing contracts; to settle proposals of the Enterprise Renewal and Development Board or the contract signing persons; to decide on company-leasing prices; to decide on recovery of leased companies at the proposals of the company-leasing contract signing persons.

2. The company-leasing contract signing persons have the following rights and obligations:

a) To organize the realization of contents and commitments in company-leasing contracts;

b) To organize the monitoring, supervision and inspection of contract performance; not to intervene in production and business activities of the companies; to create favorable conditions for the lessees to strictly comply with the commitments in company-leasing contracts;

c) To handle according to competence arising problems; to propose the handling according to provisions of law of lessees who fail to strictly comply with the contractual commitments.

Article 48. Termination of company-leasing contracts

Termination of company-leasing contracts

1. Upon the expiry of the company-leasing terms inscribed in contracts, the company lessors and lessees must inventory and determine the quantity, actual conditions and value of the remaining assets, newly and additionally invested assets, the payments between the lessors and the lessees against the contracts, determine the responsibility of each party and reach agreement on handling of the value of newly invested assets and proceed to liquidate contracts.

2. Where lessees have the demand to buy the companies which they are leasing or for which the leasing terms have expired, the two parties shall liquidate the leasing contracts and shift to mode of selling state companies; if after the expiry of the duration of the notification on sale of the companies, no other organizations or individuals register for the purchase, the current lessees shall carry out the procedures for the purchase by direct mode; if there are two or more registrants (including the current lessee) for the purchase, auction or bidding must be held under the provisions of this Decree; if the registrants get equal marks in bid evaluation, the current lessees shall be given priority to purchase the companies.

3. If upon the expiry of the leasing contracts the leased companies continue operating, they shall be obliged to receive back the former laborers. In case of operation termination due to division, separation, merger, consolidation, dissolution or bankruptcy of companies, the regimes and policies shall comply with the provisions of law.