CHAPTER 2

BUSINESS ORGANIZATIONS
Business Organizations and law on Business 1
Organizations
Definition and Characteristics of 2
Corporations

Corporation Registration 3

Organization and Operation Of 4

Corporations
1 2 3 4
 BUSINESS ORGANIZATIONS

Business
1 Organizati 2 Corporations
3 Enterprises
4 Companies
ons
CLASSES OF BUSINESS ORGANIZATIONS
Capital possession Forms of business organizations
- Public (state-owned)
- Private
- Foreign – invested * Corporations
(Joint- Venture, 100% ) - Company
+ Limitted liability
(Ltd.); JSC
Member - Partnership
- Sole trader
- Aggregate (more than one- Corporation * others: ….
Aggregate) : Joint stock Company; multi –
members limited liability company
- Sole (only one: sole trader, corporation sole)
 BUSINESS ORGANIZATIONS
Under UK Laws

Private/public sector Natural person/Juristic persons

The sole trader

The partnership
- Unlimited
- Limited
- Limited liability

The company
 BUSINESS ORGANIZATIONS
Under Australia Laws

Royal Corporation Sole

Bodies Corporate
Bodies Corporate Formed Created by special
Charter under Specific legislation\ legislation

Corporations

Other bodies
formed under
COMPANIES formed specific state of
under Corporations Act territory legislation
 BUSINESS ORGANIZATIONS
Under Vietnamese Laws

Corporations/Enterprises OTHERS

BUSINESSMANs
SOLE COORPERATIVE BUSINESS
- COMPANIES TRADERS HOUSEHOLD
- Partnership
 CORPORATIONS

THE MOST POPULAR FORM OF

BUSINESS ORGANIZATIONS ARE
CORPORATIONS - ENTERPRIES
 DEFINITIONS AND FEATURES OF CORPORATIONS

- Art. 3.10 “enterprise” means an organization that has a proper name, assets, premises,
is established or registered in accordance with law for business purposes.” Art. 3.10 of
Law on enterprises 2020 of Vietnam

- “A company is an artificial entity recognized by the law as a legal person with its own rights
and liabilities. The term “company” and “corporation” are often interchangeable… A company
is one type of corporation: s 57A. A Corporation also includes any body corporate and
unincorporated bodies that may sue and be sued or hold property in the name of an office
holder appointed for that purpose.” Phillip Lipton, Abe Herzberg, Michelle Welsh (2012),
Understanding Company Law, Thomson Reuters.

ENTERPRISE --------------------------------------CORPORATION
 1
FEATURERS OF CORPORATIONS 2

NAME REGISTRATION

4 3
CORPORATIONS
ASSETS AIMS

Premises
 1
FEATURERS OF COMPANIES 2

NAME REGISTRATION

4 3
COMPANIES
ASSETS AIMS

6 5

LIABILITY
A separate legal entity Premises
 CLASSIFICATION
1
OF COMPANIES
2
Limited Liability
Partnership
Company

COMPANIES
Join Stock Company
 LAW ON BUSINESS ORGANIZATIONS

Including a set of rules to

01 regulate establishment, 04
LAW ON organizational structure LAW ON
ENTERPRISES INVESTMENT
01 and operation of business 04
organizations

02 03
02 03
- REGULATIONS ON
LAW ON
BUSINESSMANS
COOPERATIVE - OTHERS
DEVELOPMENT OF VIETNAMESE LAW ON ENTERPRISES
Law on Enterpises 2020

2020
Law on Enterpises 2020

2014
Law on Enterprises 2005
2005
Law on Enterprises 1999
Law on State –owned Enterpises 2
1999 Law on Foreign- Invested 1996

Law on Investment
1990 Law on Sole Trader 1990
Law on Company 1990
 LIABILITY IN COMPANY
• A feature of developed legal systems around the world
• The main advantages of the company over the other forms of
business organizations
SHAREHOLDERS

LIMITED LIABILITY
UN - LIMITED LIABILITY
COMPANY

• “Limited liability means that shareholders/ members are not personally liable for their
company’s debt.” Phillip Lipton, Abe Herzberg, Michelle Welsh (2012), Understanding
Company Law, Thomson Reuters, p.28.
• Unlimited liability means that shareholders/members have full liability where the company
cannot pay a debt.
 LIABILITY IN COMPANY
Company X has 3 founders: A, B and C
- Members: A, B, C
- A’s shares is $10,000
- B’s shares is $20,000
- C’s shares is $300,000
- A, B, C fully paid the shares
- Total assets of Company X after 3 years is $ 10, 000 but the Company’ s debt is
$12, 000.

WHETHER DO A,B,C PERSONALLY LIABLE FOR $ 2,000 DEBT OF THE

COMPANY X OR NOT?
 REASONS FOR LIMITED LIABILITY

Reducing monitoring from Investors

Facilitating company

Encouraging equity diversity

 CORPORATION REGISTRATION

CONDITIONS FOR THE REGISTRATION

REGISTRATION PROCEDURE

POST- REGISTRATION REQUIREMENTS

 CONDITIONS FOR REGISTRATION
CAPITAL 01

BUSINESS LINE
02

NAME 03

MEMBERS 04

OTHERS
05
 BUSINESS REGISTRATION AUTHORITY

District Province
Business Registration Authority
 Cooperative Organizations belonging to Department of Planning
and Investment at provinces.
 Business Household All corporations are registered by the
registrar

 Functions and Powers of the Authority are

provided by Decree No. 01/2021/NĐ-CP
on Business Registration (Art.14)
 CAPTIAL
Charter Captial
Ltd Co., JSC

Partnerhips
Owner’s Capital
Sole Trader

Legal Capital

Minimum Capital required by law

 BUSINESS LAWS

“ Investors are entitled to carry out

business investment activities in
the business lines that are not
banned by this Law” Art. 5 of Law
on Investment 2020
 BUSINESS LINES

Article 6 of Law on Investment 2020

Banded

Conditional Article 7 of Law on Investment 2020

 NAME OF CORPORATIONS
Article 37 - 41 of the Law on Enterprise 2020
 Vietnamese Name
The type of company + proper name
Công ty CP Thương mại Toàn Cầu
 Name in foreign language
Global Trading Joint Stock Company
 Abbreviated Name
GLT JSC.
 Identical or similar name
Read “Business Law” p. 152-153/ Understanding Company Law p.57
 Premises
A registered office

In a certain state: required in

Vietnam, Australia…
Places of busines
The address of the
company’s principal place of  May be a registered o
business  One or more than
 MEMBERS

Organizations

Individuals

HAVE THE RIGHT TO ESTATBLISH AND MANAGE

CORPORATIONS EXCEPT SOME SPECIAL CASES
UNDER THE LAW
 MEMBERS

 Restrictions on the right to establish and manage

corporations
 See Art. 17 of the Law on Enterprise 2020
 MEMBERS
OWNER
 Sole Trader 01
MEMBERS/

Limited Liability Company

- Singer – member
- Multi –member
1-50
Partnerships – Partners
SHAREHOLDERS
 Joint Stock Company >= 3
 MEMBERS UNDER AUSTRALIAN LAW
MAXIMUM MEMBERSHIPS IN PARTNERSHIPS
ACCOUNTANCTS
20 - 1,000
LEGAL PRACTTITIONERS

20- 400

ARCHITECTS
20 - 100
 REGISTRATION PROCEDURE
Application for registration

Lodge with the

registrar directively Online

WHAT’S NEXT?
DOCUMENTS FOR REGISTRATION

DEPEND ON RESPECTIVE
TYPES OF CORPORATION
 POST –REGISTRATION REQUIREMENTS

MINUTE BOOKS 01

SEAL
02

SUBSIDIARY 03

ISSUE SHARES 04

BANK ACCOUNT
05
 ORGANIZATION AND OPERATION OF
CORPORATIONS

Sole Trader Single Member Multi – Joint Stock

Partnership
Limited Liability member Company
Limited
Liability
ORGANIZATION AND OPERATION OF
CORPORATIONS

MAIN CHARACTERISTICS

ORGANIZATIONAL STRUCTURE
MAIN CHARACTERISTICS
1 CAPITAL

2 MEMBERS

3 LEGAL STATUS