GENERAL ISSUES OF TRADERS

Assoc. Prof. Dr. Dư Ngoc Bích

OVERVIEW OF TRADERS
 OVERVIEW OF TRADERS
▪ Sole proprietorship (Business household)

▪ Partnership

▪ Join Stock company (JSC) – Share holding

company (Public company)
▪ Limited liability company (LTD.Com.) (private
company)
▪ Cooperative

(Company & Corporation)

 CONCEPTS
▪ “Thương nhân” (“trader”): Traders include lawfully

established economic organizations and individuals

that conduct commercial activities in an independent
and regular manner and have business registrations
(Article 6(1) of the Commercial Law 2005).
➢ organizations (legal person, juridical person): JSC; LTD
Com; Partnership; Cooperative
➢ individuals: Sole proprietorship; Business household
 CONCEPTS
▪ “Pháp nhân” (legal persons, juridical persons): a) It is

legally established; b) It has an organizational structure; c)

It has property independent from other natural and
juridical persons and bears liability by recourse to its
property; d) It participates independently in legal relations
in its own name. (Article 74 Civil Code 2015).
 CONCEPTS
▪ “Doanh nghiệp” (enterprises): Enterprise means

an organization that has its own name, assets

and a transaction office, and has been registered
for establishment in accordance with law for the
purpose of conducting business operations (Article
4(10) of the LOE 2020).
➢ Vietnam enterprises: JSC; LTD Com; Partnership;

Sole proprietorship.
▪ Traders: Juridical persons (JSC; LTD Com;
Partnership; Cooperative) vs. Individual (Sole
proprietorship; Business household)
▪ Traders: Enterprises (JSC; LTD Com, Partnership,
Sole proprietorship) vs. Cooperative, Business
household
➢ Enterprises are the kind of “sophisticated traders”:

▪ Vietnam enterprises: JSC; LTD Com; Partnership;

Sole proprietorship.
GENERAL ISSUES OF ENTERPRISES
IN VIETNAM
 RIGHTS OF ENTERPRISES (Article 7 of the LOE)

▪ Rights relating to conducting business (to decide

the sectors and lines of businesses that are not
banned by law; form, scope, location of business;
forms and methods of capital raising, distribution
and use, market, labours...).
▪ Rights to possess, use and dispose of their assets

▪ Other rights
 OBLIGATIONS OF ENTERPRISES
(Article 8 of the LOE)

Compliance with law: business conditions; accounting

and statistic; tax; labour; enterprise registration and
publicization duty; truthful information and report; and
other duties required by the laws.
 PROHIBITED ACTS (Article 16 of the LOE)
▪ 1. Granting or refusing to grant enterprise registration certificates against
the provisions of this Law; requesting enterprise founders to provide
additional papers that are not required in this Law; causing any delay to,
troubling, obstructing or hassling enterprise founders and enterprises’
business operations.
▪ 2. Obstructing owners, members or shareholders of enterprises in
exercising the rights and performing the obligations provided by this Law
and the company charter.
▪ 3. Conducting business in the form of an enterprise without registration,
continuing to conduct business after having the enterprise registration
certificate revoked or being temporally suspended the business.
4. Declaring untruthfully or inaccurately the contents of the
enterprise registration dossiers and dossiers to register changes
in the enterprise registration contents.
5. Wrongly declaring charter capital, failing to sufficiently pay in
the charter capital as registered; intentionally valuing the assets
used for capital contribution not at their real value.
6. Conducting business in banned sectors or trades; or in sectors
or trades not yet opened to foreign investors; conducting
conditional businesses without satisfying all the business
conditions prescribed by the laws or failing to maintain all
business conditions in the course of operation.
7. Laundering money, committing fraud or financing terrorism
 WHO CANNOT ESTABLISH AND
MANAGE ENTERPRICES ? (Article
17(2) of the LOE)
WHO CANNOT CONTRIBUTE CAPITAL TO,
PURCHASE SHARES OR CONTRIBUTED CAPITAL
AMOUNTS OF COMPANIES ? (Article 17(3) of the
LOE)

 a/ State agencies, units of people’s armed forces using

state assets to contribute capital to enterprises to make
profits for their own organizations and units;
 b/ Those who may not contribute capital to enterprises
in accordance with the law on cadres and civil servants,
the Law on Public Employees, and the Anti-Corruption
Law . (Article 20(4) Law on Anti – corruption law; Article
14(3) Law on public employees)
SECTORS AND TRADE OF BUSINESS INVESTMENT

▪ Sectors and trades banned from business investment

(Article 6 of Law on Investment 2020)
▪ Sectors and trades subject to conditional business
investment (Article 7 of the Law on Investment 2020)
▪ Conditions for business investment in the sectors and
trades shall be prescribed in laws, resolutions,
ordinances, decrees and treaties. Ministries, ministerial-
level agencies, People’s Councils and People’s Committees
of all levels and other agencies, organizations and persons
may not promulgate regulations on business investment
conditions. (Article 7(3) of the Law on Investment)
Individuals and economic organizations have the right to
conduct business in the sectors and trades subject to
conditional business investment specified in Appendix 4
to the Investment Law if they fully satisfy the prescribed
conditions and shall ensure the satisfaction of such
conditions in the course of business investment activities.
 Business investment conditions are applied in
one or several of the following forms (Article
7(6)) Law on Investment 2020)
a/ License (giấy phép);
b/ Certificate (giấy chứng nhận);
c/ Certificate of eligibility (chứng chỉ);
d/ Written certification or approval (văn bản xác nhận, chấp
thuận;
dd/ Other requirements that individuals and economic
organizations must meet in order to carry out business
investment activities without having to obtain written
certification of competent agencies. (Các bản cam kết)
 NAMES OF ENTERPRISES (Article 37)
▪ Include two components in the following order:

▪ Type of enterprise: Limited liability company: “Công ty trách

nhiệm hữu hạn” or “công ty TNHH”; Joint stock company:
“Công ty cổ phần” or “công ty CP”; Partnership: “công ty
hợp danh” or “công ty HD”; Sole proprietorship “doanh
nghiệp tư nhân” or “doanh nghiệp TN” or “DNTN”.
▪ Proper name: written in letters in the Vietnamese alphabet,
the letters F, J, Z, W, numerals and symbols.
Ex. - Công ty TNHH Thịnh Phát (Thinh Phat Com. Ltd.);
- Công ty CP thương mại, dịch vụ Vạn An (Van An JSC)
▪ The business registration agency may reject the proposed
names for registration of enterprises (Based on Articles 38,
39, 41)
 Prohibited acts in naming enterprises
(Article 38)
• Using names which are identical or confusingly
similar to the name of a registered enterprise
• Using the name of a state agency, people’s armed
forces unit, political organization, socio-political
organization, socio-politico-professional organization,
social organization or socio-professional organization
as the whole or part of the proper name of an
enterprise, unless it is consented to by such agency,
unit or organization.
• Using words, phrases and symbols which contravene
national historical traditions, culture, ethics and fine
customs.
 Identical names and confusingly similar names (Article 41)
❑ Identical names: Vietnamese name is written completely identical
❑ confusingly similar names:
➢ The Vietnamese name is pronounced the same;
➢ The abbreviated name is identical
➢ The foreign-language name is identical
➢ The proper name is different from the proper name of a registered enterprise of
the same type only by a cardinal number, an ordinal number, or a letter in
Vietnamese alphabet or letter F, J, Z or W which follows the proper name of such
enterprise with or without a space;
➢ The proper name is different from the proper name of a registered enterprise of
the same type only by the symbol “&” or “va” (and), or “.”, “,”, “+”, “-“, or “_”;
➢ The proper name is different from the proper name of a registered enterprise of
the same type only by the word “tan” or “moi” (new) which precedes or follows
the proper name of the registered enterprise;
➢ The proper name is different from the proper name of a registered enterprise of
the same type only by the words “mien Bac” (Northern region), “mien Nam”
(Southern region), “mien Trung” (the Central region), “mien Tay” (Western region),
or “mien Dong” (Eastern region);
➢ The proper name is identical to the proper name of the registered enterprise.
d, dd, e, g and h, do not apply to subsidiaries of a registered enterprise.
PROCEDURES OF ENTERPRISE REGISTRATION (Article 26 of
LOE)
• Submit dossiers to the Office of business registration of Department of
Planning and Investment (at provincial level) for enterprises; Office of
Finance and Planning (at district level) for Business Household, via:
• a/ Directly at the business registration agency;
• b/ Via postal service;
• c/ Via the electronic communication network.
https://dangkykinhdoanh.gov.vn/vn/Pages/Trangchu.aspx
• The enterprise founder(s) is responsible for the truthfulness and accuracy
of information declared in enterprise registration dossiers and reports.
• The business registration agency shall examine the validity of the
enterprise registration dossier
• Time- limit to grant enterprise registration certificate: 3 working days after
receiving such dossier.
 CERTIFICATE OF ENTERPRISE REGISTRATION

Grant of enterprise registration certificates (Article 27)

meeting the following conditions:
a/ Its business line to be registered is not banned;
b/ Its name complies with Articles 37, 38, 39 and 41 of
this LOE);
c/ It has a valid enterprise registration dossier;
d/ It has paid in full the enterprise registration fee in
accordance with the law on charges and fees.
Contents of an enterprise registration certificate (Article
28)
1. Enterprise name and identification number.
2. Head office address of the enterprise.
3. Information and identity of legal representative of
LLd.com., JSC, of the owner of Sole proprietorship; of
general partners of partnership, of members of LLd
Com.
4. Charter capital, for a company, or investment capital,
for a sole proprietorship.
Identification number of an enterprise (Article 29 of the
LOE)
▪ Identification number of an enterprise is a sequence
of numbers created by the national enterprise
registration information system, granted to the
enterprise upon establishment and recorded on its
enterprise registration certificate. A single
identification number shall be granted to an enterprise
and may not be re-used for another enterprise.
▪ Identification numbers of enterprises shall be used for
the fulfillment of tax obligations, administrative
procedures and other rights and obligations.
▪ Registration of changes in contents of enterprise
registration certificates (Article 30 of LOE)
▪ Notification of changes in contents of enterprise
registration (Article 31 of LOE)
 SEAL OF ENTERPRISE (Article 43 of LOE)
1. The seal may be made at a seal-carving establishment or a
seal in the form of digital signature as specified by the law on e-
transactions.
2. An enterprise may decide on the type, quantity, shape and
content of seals of the enterprise and its branches,
representative offices and other units.
3. The management and preservation of seals must comply with
the company charter or regulations issued by enterprises or
their branches, representative offices or other units having
seals.
Enterprises shall use seals in transactions in accordance with
law
 ANNOUNCEMENT OF CONTENTS OF ENTERPRISE
REGISTRATION (Article 32)
1. An enterprise shall publicly announce the enterprise registration on
the National Enterprise Registration Portal. The contents to be
announced include the contents of the enterprise registration
certificate and the following information:
a/ Business line;
b/ List of founding shareholders and shareholders being foreign
investors, for joint stock companies.
2. In case of a change in the contents of enterprise registration, such
change shall be publicly announced on the National Enterprise
Registration Portal.
3. The time limit for public announcement of enterprises’ information
prescribed is 30 days
.
 BRANCHES, REPRESENTATIVE OFFICES AND BUSINESS
LOCATIONS OF AN ENTERPRISES (Article 44 of LOE)
 A branch: a dependent unit of the enterprise, having the
task of performing all or a number of the functions of the
enterprise, including the function of authorized
representation. The business lines of the branch must be
those of the enterprise.
 A representative office is a dependent unit of the enterprise,
having the task of representing under authorization the
interests of the enterprise and protecting such interests.
The representative office may not perform the business
function of the enterprise.
 A business location is the location where the enterprise
carries out specific business operations.
Establishment of branches and representative offices of an
enterprise (see Article 45 of the LOE)