TDTU_Faculty of Law

TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

CHAPTER 1: GENERAL PROVISIONS ON ENTERPRISES

1.1. Concept and characteristics of enterprises
- Concept of enterprises: An enterprise is an organization that has a proper name, assets, premises,
is established or registered in accordance with law for business purposes.
- Characteristics of an enterprise:
• An organization:
o Economic/business organization (distinguishing enterprises from social organizations)
o Having legal independence from its founders
o Having its own rights and obligations upon laws
• Having its own name: Article 37 – 41 the 2020 Enterprise Law
o Determined by the founders; must meet the requirements of the law;
o The enterprise only have one Vietnamese name;
o The Vietnamese name of an enterprise shall contain two elements in order (mandatory/main
components of the enterprise name): Enterprise type and proper name
o Prohibited acts of naming enterprises: identical or confusingly similar to another enterprise’s
name; using words or symbols that violate historical tradition, culture, morality, public
customs...; using the names of state agencies, political-social organizations..., unless approved
by these agencies...
• Having assets:
o Based on sources: contributed by members, shareholders (investors); mobilized by the
enterprises; created by enterprises (retained profits for reinvestment...)
o Basis for the operating capacity and liability of enterprises;
o The enterprise has assets, but it does not have its own assets (ie. Sole proprietorship).
• Having premises: Article 42
o Head office of the enterprise: Contact address in Vietnam; head office ensured for transaction
and determination of the existence of the enterprises; for state management.

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

o The enterprise have only one head office in Vietnam;

• Established or registered in accordance with the law:
o For state management; for the legal existence of enterprises.
o Registration procedures: Law on Enterprise; Decree No. 01/2021/ND-CP; specialized laws
o Enterprise registration is mandatory for all enterprises
• Business purpose: Clause 21 Article 4
o Seeking legal profits (distinguishing from other organizations)
o Referring “social enterprises” – Article 10 Law on Enterprises

1.2. Classification of enterprises

- Law on Enterprises only regulates enterprises, not business households or cooperatives;
- Enterprises can be classified in many ways, such as by legal form, by ownership form, by business
scale, by main business purpose...
- There are some common classification methods as follows:
• By legal form of the enterprise, including: There are 4 type of enterprises.
o Limited Liability Company (single-member Limited Liability Company: one owner only;
Multiple-member Limited Liability Company: 2 – 50 owners);
o Joint Stock Company: at leat 3 owners,
o Partnership: at leat 2 owners;
o Sole proprietorship: one owner only.
• By status of a juridical person, including: Enterprises have juridical personality (Partnership,
Limited Liability Company, Joint Stock Company); Enterprises do not have juridical personality
or non-juridical person (Sole proprietorship).
• By liability in business:
o Considered for application to investors (owners) and enterprises (business entities); including:
unlimited liability and limited liability;

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

o Unlimited liability: Liability to pay debts arising from business activities with all assets owned
legally (analysis: Sole proprietorship’s owner, general partners in partnerships);
o Limited liability: Liability to pay debts arising from business activities only with the amount of
capital invested in business (analysis: Limited liability company - members, joint stock company
- shareholders).

1.3. Rights and Obligations of Enterprises:

Þ Articles 7, 8 of the 2020 Enterprise Law

1.4. Company’s charter: Article 24

- The company's charter includes the initial charter submitted upon enterprise registration and
revisions made during the operation;
- Primary contents of the company's charter:
o Company’s name, addresses of the headquarters, branches and representative offices (if any);
o The company’s business lines;
o The charter capital; total quantity of shares, types of shares and face value of each type (for
joint stock companies);
o Full name, mailing address, nationality of each partner (for partnerships), the owner and each
member (for limited liability companies) or the founding shareholders (for joint stock
companies). Stakes held by each member or partner (for limited liability companies and
partnerships) and values thereof. Quantity of shares, types of shares and value of each type held
by founding shareholders (for joint stock companies);
o Rights and obligations of the members or partners (for limited liability companies and
partnerships) or shareholders (for joint stock companies);
o The organizational structure;
o Quantity, titles, rights and obligations of each of the enterprise’s legal representatives;
o Method for ratifying the company’s decisions; rules for settlement of internal disputes;

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

o Basis and method for determination of salaries and bonuses of the executives and controllers;
o Cases in which members/shareholders may request the company to repurchase their
stakes/shares (For limited liability companies/joint stock companies);
o Rules for distribution of post-tax profits and settlement of business losses;
o Cases of dissolution; procedures for dissolution and liquidation of the company’s assets;
o Procedures for revising the company's charter.

1.5. Charter capital

Þ Clause 34 Artice 4
- Charter capital means the total value of assets that have been contributed or promised by the
members/partners/owners when the limited liability company or partnership is established; or the
total of nominal values of the sold or subscribed shares when a joint stock company is established.;
- Information on charter capital shall be provided in the Enterprise Registration Application form of
Partnership, Limited liability company (MMLC, SLLC) and Joint stock company.

1.6. Representative of the enterprise

• Legal representative: The 2020 Enterprise Law (Articles 12, 13)
- The enterprise’s legal representative is the person/individual that, on behalf of the enterprise,
exercises and performs the rights and obligations derived from the enterprise’s transactions, acts
as the plaintiff, defendant or person with relevant interests and duties before in court, arbitration,
and performs other rights and obligations prescribed by law.
• Authorized representative
- Authorized representative is an individual who is authorized in writing to act on behalf of the
owner, member, or shareholder of a company to exercise rights and obligations in accordance with
the provisions of the 2020 Enterprise Law. The authorized person must be an individual who is at
least 18 years old, has full civil capacity, and is not prohibited from establishing and managing an
enterprise.

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

1.7. Right to establish and contribute capital to enterprises

- All organizations and individuals that are not prohibited by law from establishing enterprises or
contributing capital to enterprises;
- Organizations and individuals have the right to:
+ Establish and manage enterprises in Vietnam in accordance with the provisions of the Enterprise
Law, except for cases prohibited under Clause 2, Article 17 (e.g. officials and public employees in
accordance with the Law on officials and the Law on public employees are not allowed to establish
and manage enterprises, etc) à Entities that do not have the right to establish and manage
enterprises: Clauses 2 and 3, Article 17 of the Enterprise Law.
+ Contribute capital, buy shares, buy capital contributions in joint stock companies, limited liability
companies, partnerships, except for cases prohibited under Clause 3, Article 17 à Entities that do
not have the right to contribute capital, buy shares, buy capital contributions in joint stock
companies, limited liability companies, partnerships: Clause 3, Article 17 of the Enterprise Law.

1.8. Enterprise registration procedures - Registering revisions to the Certificate of Enterprise

Registration
- The enterprise’s founder or the authorized person shall apply for enterprise registration at the
business registration authority (the provincial Department of Planning and Investment where the
enterprise is headquartered) as follows:
o Direct application at the business registration authority;
o Submission of the application by post;
o Online enterprise registration.
- Registering revisions to the Certificate of Enterprise Registration
o Revisions to any of the information specified in Article 28 on the Certificate of Enterprise
Registration shall be registered by the enterprise with the business registration authority.
o An application for revision shall be submitted within 10 days from day on which the change
occurs.

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TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

o Within 03 working days from the receipt of the application for revision, the business registration
authority shall consider the validity of the application and decide whether to issue a new
Certificate of Enterprise Registration. The business registration authority shall inform the
applicant of necessary supplementation in writing if the application is invalid or inform the
applicant and provide explanation if the application is rejected.

1.9. Contributed capital - Valuation of contributed capital - Transfer of ownership of

contributed capital: Article 34, 36, 35
- Contributed capital: Vietnamese Dong, freely convertible foreign currency, gold, land use rights,
intellectual property rights, technology, technical secrets, other assets that can be valued in
Vietnamese Dong;
- Contributed capital that is not Vietnamese Dong, convertible foreign currency and gold must be
valued by the founding members, shareholders or the valuation organization and expressed in
Vietnamese Dong;
- Members of limited liability companies, partnerships and shareholders of joint stock companies
must transfer of ownership of contributed assets.

1.10. Branches - Representative offices - Business locations of enterprise - Enterprise’s seals

- A branch of an enterprise is its dependent unit which has some or all functions of the enterprise,
including authorized representative. The business lines of a branch shall match those of the
enterprise.
- A representative office of an enterprise is its dependent unit which acts as the enterprise’s
authorized representative, represents and protect the enterprise’s interests. A representative office
shall not do business.
- Branch or representative office is not a must; branch or representative office does not take liability
for the enterprise’s debts;

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

- A business location of an enterprise is the place at which specific business operations are carried
out.
- The enterprise’s seals:
o The enterprise’s seals can be physical or digital as prescribed by e-transaction laws.
o The enterprise shall decide the type, quantity, design and content of its seal and the seals of its
branches, representative offices and other units.
o The management and storage of seals shall comply with the company's charter or regulations
of the enterprise, branch, representative office or unit that owns the seal. Seals shall be used by
enterprises in transactions as prescribed by law.

1.11. Business Lines: The 2020 Investment Law

- Business Lines and occupations prohibited from investment
Þ Article 6 of the 2020 Investment Law stipulates that business lines and occupations prohibited
from investment include:
o Manufacture and trading of weapons, explosives, supporting tools, and defense tools;
o Manufacture and trading of drugs, precursors, and psychotropic substances;
o Gambling activities in all forms;
o Production and trading of obscene and reactionary cultural products;
o Illegal communication and advertising activities;
o Debt collection service business;
o Other business lines and occupations as prescribed by law.

- Business Lines and occupations subject to conditional investment

Þ Article 7 of the 2020 Investment Law stipulates that business lines and occupations subject to
conditional investment.
- Business Lines and occupations free to operate

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

Þ Apart from the business lines and occupations prohibited from investment and the business
lines and occupations subject to conditional investment, all other business lines and
occupations are free to operate.
-----End of Chapter 1-----
-----------------------------------------------------------------------------------------------------
Chapter 2: SOLE PROPRIETORSHIP

2.1. Concept of a Sole proprietorship

- A Sole proprietorship is an enterprise owned by a single individual.
- The owner of a Sole proprietorship bears full personal liability (unlimited liability) for all activities
of the enterprise with all of his/her assets.

2.2. Characteristics of Sole proprietorship

- A Sole proprietorship is a business organization with rights and business obligations in accordance
with the law.
- A Sole proprietorship has only one owner, who is an individual:
o The owner of Sole proprietorship must not be individual who do not have the right to establish
and manage enterprises in Vietnam: Clause 2 Article 17;
o The owner of a Sole proprietorship is the sole investor and owner;
o There is no sharing of ownership or management rights;
o There is no separation of asset ownership (personal assets of the owner vs. assets in the Sole
proprietorship).
- The owner of a Sole proprietorship bears full personal liability for all debts and financial
obligations arising from the operations of the enterprise (unlimited liability).
o Debts arising from the business activities of a Sole proprietorship are the debts of the owner;
o Creditors directly require the owner of the Sole proprietorship to fulfill the financial obligations
arising from the operations of the Sole proprietorship.

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

- A Sole proprietorship does not have status of juridical person (non-juridical person);
o There is no separation of assets; Sole proprietorship does not bear its own liability with its
assets; it does not participate in legal relationships independently in its own name, but depends
on the legal status of the owner of the Sole proprietorship.
o Impact of the lack of juridical person status of a Sole proprietorship: Does not eliminate the
equality between Sole proprietorship and other types of enterprises; Limited in some rights
compared to other enterprises having juridical person status... (the owner of a Sole
proprietorship cannot simultaneously be a business household owner, a general partner of a
general partnership; a Sole proprietorship is not entitled to contribute capital to establish or
purchase shares, capital contributions in a general partnership, a limited liability company or
a joint stock company).
- A Sole proprietorship is not allowed to issue securities.

2.3. Rights of the Sole proprietorship’s owner to the enterprise

• Right to invest capital. The capital of a sole proprietorship shall be registered by its owner. The
sole proprietorship’s owner shall register the accurate amounts of capital in VND, convertible
currencies, gold and other assets, types and quantities of assets. During its operation, the sole
proprietorship’s owner is entitled to increase or decrease its capital. The increases and decreases
in capital shall be fully recorded in accounting books. In case the capital is decreased below the
registered capital, the decrease may only be made after it has been registered with the business
registration authority. Procedures for ownership transfer are exempt for assets serving business
operation of the sole proprietorship’s owner. The sole proprietorship does not have charter
capital.

• Right to manage and operate.

o The sole proprietorship’s owner has total authority to decide all of its business activities. The
owner may directly appoint himself/herself as a Director/General Director of the sole

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

proprietorship or hire another person to hold the position of Director/General Director. In case
of hiring a Director/General Director, the owner is still responsible for every business activity
of the enterprise.
o The sole proprietorship’s owner is its legal representative who will represent it during civil
proceedings, as the plaintiff, defendant or person with relevant interests and duties before the
court and arbitral tribunals, and in performance of other rights and obligations prescribed by
law.

• Right to decide all of its business activities.

o The sole proprietorship’s owner is entitled to lease out the entire sole proprietorship. During
the lease term, the sole proprietorship’s owner is still legally responsible as its owner. The rights
and obligations of the owner and the lessee to the sole proprietorship’s business operation shall
be specified in the lease contract.
o The sole proprietorship’s owner is entitled to sell it to another organization or individual. After
selling the sole proprietorship, the owner is still responsible for its debts and liabilities that
occur before the date of transfer, unless otherwise agreed upon by the owner, the buyer and the
creditors. The sole proprietorship’s owner and the buyer shall comply with labor laws. The
buyer of the sole proprietorship shall register the change of owner in accordance with law. The
owner of a sole proprietorship may convert it into a limited liability company, joint stock
company or partnership…

• Right to profit. The sole proprietorship’s owner has total authority to use of post-tax profit and
fulfillment of other financial obligations as prescribed by law.
-----End of Chapter 2-----

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

CHAPTER 3: PARTNERSHIP

3.1. Concept of partnership: A partnership is an enterprise with at least two members who are the
joint owners of the company, doing business together under a common name (called general partners).
In addition to the general partners, the company may have limited partners.

3.2. Characteristics of partnership

- A partnership has at least two general partners.
o A partnership is a business organization: there is a capital contributiion, business combination,
and management between the general partners in the company.
o The general partners do business together under a common name (name of the partnership
company).
- General partners are jointly liable for the debts of the partnership.
o General partners are compulsory in the partnership;
o General partners are jointly liable if the company goes bankrupt and the company's assets are
not enough to pay off its debts à unlimited liability: A liability whereby the general partner
uses his or her own assets to pay the partnership’s remaining debts (if any) after all the
partnership’s assets are used to pay debts;
o The company is liable for its assets to creditors.
- A partnership may have limited partners.
o Limited partners are not mandatory members; they can be individuals or organizations.
o Limited partners do business within the partnership’s business lines in their own names or in
other persons’ names
o Limited partners take limited liability for the company’s debts.
- A partnership is not allowed to issue securities.
- A partnership has status of juridical person.
o A general partnership complies with the legal entity regulations in the Civil Code 2015.

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TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

o The company is a plaintiff or defendant in lawsuits, disputes, etc.

3.2. Legal regime of members in partnership

3.2.1. Entities eligible to become General Partners and Limited Partners
3.2.1.1. Entities eligible to become general partners
- Individuals who contribute capital or participate in the establishment of the company;
- General partners must not be owners of Sole proprietorships; they are not allowed to be general
partners of other partnerships unless agreed upon by the remaining general partners.
- The establishment of general partner status is carried out:
o By participating in the establishment of a partnership;
o Being admitted by the company as a general partner; heirs can become general partners (with
conditions);
o Receiving the transfer of capital contributions of a general partner.
3.2.1.2. Entities eligible to become Limited Partners
- Organizations and individuals who contribute capital in accordance with the conditions prescribed
by law; they take limited liability for company’s debts.
- The establishment of capital contributor status is carried out:
o Contributing capital at the time of company establishment;
o When additional limited partners are admitted (increasing the charter capital);
o Receiving (inheritance, transfer, donation) the stake from limited partners;
o Other cases as prescribed by laws (receiving payment of debts equal the value of stakes,...).
3.2.2. Basic rights and obligations of members (General partners & Limited partners)
3.2.2.1. Basic rights and obligations of General partners
Þ Article 180, 181 of the 2020 Enterprise Law:
o Rights and obligations related to assets: Right to profit; Right to use assets for business;
Obligation to contribute capital; Obligation to be responsible for business activities (unlimited
liability - jointly liable for the company's debts);

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

o General partner must not transfer part or all of his/her stake in the company to another
organization or individual unless it is accepted by the other general partners;
o Right to carry out business activities;
o Management organization rights: General partners are legal representatives of the company;
right to participate in the Board of Partners; right to vote on company matters;
o Must fulfill the obligation to contribute capital as committed.
o When general partners perform certain business activities together, it will be decided under the
majority rule. A general partner’s activities beyond the scope of operation of the partnership
are not responsibility of the partnership unless they are accepted by the other partners.
3.2.2.2. Basic rights and obligations of Limited partners:
Þ Article 187 of the 2020 Enterprise Law:
o Right to receive annual profits;
o Right to participate in voting with limited rights (voting value determined by the charter);
o Right to transfer, inherit, donate, mortgage, pledge... the stake;
o Right to conduct business in the industries and business lines of the company in their own name
or in the name of others.
o Take on a liability for the partnership’s debts and other liabilities which is equal to their
promised capital contribution (limited liability);
o Do not participate in administration of the partnership; do not do business in the partnership’s
name;
o Comply with the partnership’s charter, resolutions and decisions of the Board of Partners;
o Must fulfill the obligation to contribute capital as committed.

3.2.3. Transfer of capital in a partnership

- General partners are free to transfer their capital contributions (stake) to other general partners.
However, the transfer of capital contributions (stake) to a person who is not a general partner
requires the consent of the remaining general partners.

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

- Limited partners are free to transfer their capital contributions (stake) to others.
3.2.4. Limitations on the rights of General Partners
Þ Article 180 of the Enterprise Law 2020 specifies the limitations on the rights of general
partners.

3.3. Management Organization in Partnership

Þ Management apparatus:
o Board of Partners
o Chairman of Board of Partners - (General) Director
o Legal Representative
3.3.1. Legal Representative
- All general partners are the partnership’s legal representative, but are not legal representatives in
all legal relations;
- The general partners who hold the position as the President of the Board of Partners, the
Director/General Director will represent the company in civil proceedings, as the plaintiff,
defendant, person with relevant interests and duties in front of the court or arbitral tribunal…
3.3.2. Board of Partners
- The Board of Partners comprises all partners of the company (general partners and limited
partners).
- The Board of Partners has the right to decide on all business activities of the company (the highest
decision-making body).
- Decisions of the Board of Partners are made based on the majority principle:
o Important decisions require the approval of at least 3/4 of the general partners;
o Other decisions require the approval of at least 2/3 of the general partners.
- Role of general partners in the Board of Partners: General partners participate in decision-making
on all matters within the authority of the Board of Partners. They organize the daily business
operations of the company. They have the right to convene meetings and vote. General partners

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 TDTU_Faculty of Law
TT de cuong BG/2024_E01084/E01081/E01118/LTD

LECTURE NOTES SUMMARY

Course: Corporate Law/Business Law 1/Enterprise Law

shall assume different managerial positions in the partnership under agreement. When some or all
general partners perform certain business activities together, it will be decided under the majority
rule.
- Role of limited partners in the Board of Partners: Limited partners participate in meetings,
discussions, and voting at the Board of Partners on amending and supplementing the company's
charter, amending and supplementing the rights and obligations of capital contributors,
reorganizing and dissolving the company, other contents of the company's charter directly related
to the rights and obligations of limited partners.
3.3.3. Chairman of the Board of Partners and (General) Director
- The Board of Partners elects one general partner to be the Chairman of the Board of Partners, who
concurrently serves as the Director/General Director of the company if the company's charter does
not provide otherwise.
- The Chairman of the Board of Partners is elected by the Board of Partners from among the general
partners. The Chairman may also serve as the (General) Director if the charter does not provide
otherwise. The Chairman is the legal representative of the company.
- The Director/General Director must be a general partner. The Director/General Director has the
role of coordinating the activities of the general partners. The Director/General Director performs
the function of managing the company's business activities together with the general partners.
- The duties and responsibilities of the Chairman of the Board of Partners and the Director/General
Director are specified in Articles 183 and 184 of the 2020 Enterprise Law.
-----End of Chapter 3-----

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