INDIVIDUAL/FAMILY

HOUSEHOLD AND PRIVATE

ENTERPRISES
GROUP 1
 OUTLINE

I. Individual/ family household

II. Private enterprise
III. Differences between family household and
private enterprise
 I. Individual/family household

1. Definition and Characteristics

2. Establishment and Registration
3. Management and Controlling;
Temporary cessation;
Termination
1. Definition and Characteristics
Definition:

• Family household’s members:

- Have common property.
- Jointly contribute efforts and labor to their common
economic activities.
(Art 106 – Civil Code 2005)

• Have a representative to perform in civil transaction

for the common interest of the household.
(Art 107 – Civil Code 2005)
1. Definition and Characteristics
Characteristics:

- Owned by an individual who is a citizen of

Vietnam, one group, one household .
- Registered in one location.
- Shall employ up to 10 laborers at most
- Have no seal.
- Have civil liability by recourse to its household
property.

(Art 49.1 – Decree No 43/2010/ND-CP)

2. Establishment and Registration
Registration:

• Vietnamese citizens:
+ Full 18 years of age or older.
+ Have full legal capacity
+ Have civil act capacity and households
(Art 50.1 - Decree No 43/2010/ND-CP)

• Business lines: not banned

(Art 52.2 - Decree No 43/2010/ND-CP)
2. Establishment and Registration
Registration:

- Business household’s name:

comply with Article 56 of
Decree No 43/2010.

- Order and procedures for

registration:
Art 52 – Decree No 43/2010
FAMILY HOUSEHOLD
3. Management and Controlling, Temporary cessation and
Termination of business operation

Management and controlling:

• Agreed upon by members of family household

• Dispute among members: intervened by law.

• Changing registered business registration contents:

- Inform the change to the district-level business

registration office with which it has registered its
business.
(Art 55 – Decree No 43/2010)
FAMILY HOUSEHOLD
3. Management and controlling, temporary cessation and
termination of business operation

Temporary cessation
(at least 30 days, not exceed 1 year):

- Inform the district-level business registration

office with which it has registered its business.

- Inform the direct managing tax office.

- Must comply with Art 57 – Decree No 43/2010.

FAMILY HOUSEHOLD
3. Management and Controlling, Temporary cessation and
Termination of business operation

Cases for termination

• At the request of the owner’s free will

• The owner is dead

• A business household has its business household

registration certificate revoked in the cases in Art 61 –
Decree No 43/2010
When terminates, a business household shall:

- Return the original business registration

certificate to the district-level business
registration office with which it has registered its
business.

- Pay all debts, including tax arrears and

unfulfilled financial obligations.

(Art 55 – Decree No 43/2010

Example:

Salt producing Incense producing

II. Private enterprises

1. Definition
2. Registration
3. Investment capital
4. Management
5. Lease
6. Sale
Definition

• An enterprise owed by an individual who is liable for all

activities of the enterprise with all his/her assets
• Private enterprises may not issue securities of any type
• Each individual may establish only one private enterprise.
The owner of a private enterprise must not concurrently
be a business household owner or a partner in a
partnership
• Private enterprises may not contribute capital for the
establishment of or purchase shares or capital
contributions in, a partnership, limited liability company
or joint stock company

LOE 2014, Art 183

Investment capital of Enterprise owners
• The owner of a private enterprise shall himself/herself register
his/her investment capital. The owner of a private enterprise is
obliged to register accurately the total investment capital,
specifying the amount in VND, freely convertible foreign
currencies, gold and other asset; for the amount in other
assets, the types of asset, quantity and residual value of each
type of asset shall also be specified.
• All capital and assets, including loans and leased assets, which
are used for the business operations of an enterprise, shall be
recorded fully in its accounting books and financial statement
in accordance with law
• May increase/reduce capital amount invested in the business
operation of the enterprise. (must be recorded in accounting
book)
• Owner may reduce the investment capital below the amount
of investment capital registered only after registration with the
business registration agency

Art 184
Management of Enterprise
• The owner of a private enterprise as total discretion
in making all business decisions of the enterprise;
deciding the use of profits after payment of taxes;
performance of other financial obligations prescribe
by law
• The owner may manage and administer business
operation
Or
Employ another person do so.
• Owner must be plaintiff; defendant or person with
related right and obligations in arbitration or court
proceeding in dispute related to the enterprise
• Owner is the at law-representative of the enterprise

Art 185
Lease of Enterprise

• The owner of a private enterprise may lease

his/her whole enterprise provided that a written
notice and a notarized copy of the lease contract
shall be sent to the business registration agency
and the tax agency within 3 working days after
the lease contract becomes effective. During the
lease term, the owner of the private enterprise
shall remain responsible before law as the owner
of the enterprise. The rights and responsibilities
of the owner and the lessee with respect to the
business operations of the enterprise shall be
provided in the lease contract.
Sales of Enterprise
• The owner of a private enterprise may sell his/her
enterprise to another person.
• After selling his/her enterprise, the owner of the
private enterprise shall remain liable for all debts and
other property obligations of the enterprise incurring
before the date of handing over the enterprise,
unless otherwise agreed by the purchaser, the seller
and creditors of the enterprise.
• The purchaser and seller of an enterprise must
comply with the labor law.
• The purchaser of an enterprise shall register for the
change of the owner of the private enterprise in
accordance with this Law.
Private enterpirse:

One owner One enterprise

1. Business Subject

Private Enterprise:
Family Household:
Owned by an individual Owned by one individual
who is a Vietnamese who can be Vietnamese
citizen or a group of citizen or foreigner.
individuals or a household
Enterprise Household Family
2. Business Scale

Private Enterprise:
Family Household:
• Smaller scale • Larger scale
( no more than 10
employees)

• Have to register a fixed • Unlimited business

location location

• Limited scale capital • Unlimited scale capital

Enterprise Household Family
3. Business Registration
Family Household:
• Not all the household
business are required to
register
• Register at district-level
business registration office
• Not have a seal
Private Enterprise:
• All enterprises are required
to register.
• Register at provincial-level
business registration office.
• Have the official seal of
management.
Household Family District-level business
registration office

REGISTERED
 Provincial-level business
Enterprise registration

REGISTERED
Household Family Enterprise