1

LAWS ON ENTERPRISES
Objectives
• What is enterprise law and its features?
1

• How many types of enterprises are there?

2

• How many ways can enterprises be

3 reorganised?

• How will an enterprise be established?

4
2
What is enterprise law?

Enterprise law is a part of the Business law branch which

consists of legal norms on the establishment, management
organization, reorganization and dissolution of enterprises, and
related activities.

3
Who is the main subject of
enterprise law?
Enterprises

4
What is an enterprise?
(Article 4.10, the law on
enterprise 2020)

“Enterprise means an organisation that has its own

name, assets and a transaction office, and has been
established or registered for establishment in
accordance with law for the purpose of conducting
business operations ( hoạt động thương mại) .”

5
 What is an enterprise?
(Article 4.10, the law on enterprise 2020)

Own name
Being established or
having
establishment Assets
registration
Enterprise
=
Organisation

Transaction
Conduct business office
6
7
Example:
Enterprises

8
What is Enterprise law is a part of the
enterprise Business law branch which consists of
legal norms on the establishment,
law? management organization,
reorganization and dissolution of
enterprises, and related activities.

9
What will enterprise law govern?

Establishment of Management Reorganisation of

enterprises organisation of enterprises
enterprises

Dissolution of Other related

enterprises activities 10
 Enterprise law
Position in the A part of the business law
1 Vietnamese legal branch
system
Summary: 2 Main subject Enterprises
What is Establishment of enterprises
enterprise Management organisation of
law? 3
What enterprise law
governs mainly
enterprises

Reorganisation of enterprises

Dissolution of enterprises

11
Objectives
• What is enterprise law and its features?
1

• How many types of enterprises are there?

2

• How many ways can enterprises be

3 reorganised?

• How will an enterprise be established?

4
12
How many types of enterprise are there?
Base upon legal forms

Enterprises

Limited liability Joint stock

Partnership
company (Cty trách company ( JSC) Private enterprise
company
nhiệm hữu hạn) cty cổ phần

Base upon ownership

Enterprises

State owned enterprise

Private owned (> 50% of the capital or voting shares
enterprise belonging to the state) thuộc về nhà 13
nước
How many types of enterprise are there?
Base upon the scope of liability of owner

Enterprises

Unlimited liability Limited liability

enterprise enterprise
(Owners will be liable for all the debts (Owners will be liable for all the debts
of enterprises by all of their own of enterprises within the amount of
property) capital they contributed)

Partnership company Limited liability

company

Private enterprise
Joint stock company
14
Summary: Enterprise forms

2. Joint stock
1. Limited liability company
company

3. Partnership
4. Private enterprise
company

15
Limited liability companies

One member limited liability

Coca-cola beverages Viet nam
company of production, trade
limited liability company
and services Hy Lam Mon
bakery & confectionery

16
 What is a limited
liability company and
its features?
Aims
How many types of
limited liability
companies are there?

17
 A limited liability company is an enterprise having
legal person status and in which:

Its members can be individuals or organisations;

What are
limited
The number of members must not exceed 50;
liability
companies and
their nature? Its members will be liable for debts and other
(Article 46 and property obligations of the companies within the
74, the law on amount of capital contributed to the companies;
enterprises Shares are not allowed to be issued;
2020)
Bonds can be issued in compliance with law.

18
What are limited liability companies and their
nature? (Article 46 and 74, the law on enterprises 2020)
Owned by individuals
or/and organisations

Can issue Not exceeding

bonds 50 members
Limited liability
companies
=
Enterprises

Not allowed to Legal person

issue shares
Owners having Limited
liability
19
The company owned by individuals and/or
organisations

Individuals Organisations

Invest

20
The company is a legal person
(Article 74 of the Civil code 2015)

The company has all the following features:

Lawful Well organized Independent property

establishment structure and liability

Independently entering
into civil transactions
21
The owners have limited liability

The owners will be liable for debts and other property

obligations of the companies within the amount of
capital contributed to the companies
22
Ex: Limited liability

$ 500,000

Liable
23
Summary: What are limited liability companies
and their nature?

Members = individuals
Legal person or organisations
(not more than 50 members)

Limited liability
companies
=
Enterprise

Limited liability
Can issue bonds but (liable within the amount of
not shares capital contributed to the
company)
24
 What is a limited
liability company and
its features?
Aims
How many types of
limited liability
companies are there?

25
How many types of limited liability
companies are there?

Limited liability
companies

Single member – limited Limited liability companies

liability companies with two or more members
(Owned by one individual or (Owned by two or more individuals
organisation) and/or organisations)

Owned by an Owned by an
individual organisation

26
Summary: Enterprise forms

2. Joint stock
1. Limited liability company
company

3. Partnership
4. Private enterprise
company

27
Joint Stock Companies

Kinh Do Joint stock company

28
What are joint stock companies and their nature?
(Article 111, the law on enterprises 2020)

Joint stock companies are enterprises having legal person status and in which:
1. The charter capital is divided into equal portions called shares,
2. Organisations or individuals can be shareholders. The minimum number must
be three.
3. Shareholders will be liable for debts or other property obligations of the
companies within the amount of capital contributed to the companies.
4. It is allowed to issue shares, bonds and other securities.
5. Shareholders can transfer their shares freely (except cases regulated in art
120.3 and 127.1

29
What are joint stock companies and their
nature? (Article 111, the law on enterprises 2020)
Individuals or/and
organisations can be Three is the
shareholders minimum number
Shareholders can
transfer their of members
shares freely

Joint stock companies

=
Capitals is Enterprises
divided into Legal person
shares

Shareholders
Allowed to
having limited
issue shares
liability 30
What is a share?
 A share is one of the equal parts into which a company's
capital is divided.

Ex: Company’s charter capital: 1 billion dong

Divide into

100.000 shares

 One share =

 Individuals and organisations who own shares are

shareholders
 Certificates certifying share ownership are Share
certificates 31
 How many types of shares are there?
(Article 114, the law on enterprises 2020)

Shares

Ordinary shares Preference shares

- One ordinary share

Voting Dividend Redeemable
= one vote
preference Preference preference Others
- Receive dividend (request for
(more vote) (more dividend)
redemption)
- Transfer shares
- Decide matters of - Not allowed to transfer except in some
the company special cases No vote
- Cannot be - Owned by only founding shareholders Except the
switched to and organisations authorised by the case
preference shares regulated at
government art 148.6
- Valid for only 3 years  founding
Summary: What are Joint Stock Companies
and their nature?

Members = individuals
Legal person or organisations
(at least 3 members)

Joint Stock
Companies
=
Enterprise

Limited liability
Can issue shares (liable within the amount of
capital contributed to the
company)
33
Summary: Enterprise forms

2. Joint stock
1. Limited liability company
company

3. Partnership
4. Private enterprise
company

34
Partnership companies

35
What are partnership companies and their nature?
(Article 177, the law on enterprises 2020)

Partnership companies are enterprises having legal person status in which:

1. Its members include at least 2 general partners who are individuals
co-owning and jointly conducting business under one common name,
and limited partners who can be organisations or individuals
2. General partners will be liable for the company’s obligation with all
his/her personal assets
3. Limited partners will be liable for the company’s obligation within the
contributed capital
4. It is not allowed to issue any securities

36
 What are partnership companies and their
nature? (Article 177, the law on enterprises 2020)

Members:
- General partners: co-owners
Having legal person status
- Limited partners: organisations
or individuals
A partnership
company
=
An enterprise

Scope of liability of
members: Not allowed to issue any
- General partners: unlimited securities
- Limited partners: limited
37
Summary: Enterprise forms

2. Joint stock
1. Limited liability company
company

3. Partnership
4. Private enterprise
company

38
Private enterprises

39
What are private enterprises and their nature? (Article
188, the law on enterprises 2020)

Private enterprises are enterprises owned by an individual in which:

1. The owner will be liable for the enterprise’s operation with all his/her
personal assets.
2. It has no legal person status
3. It is not allowed to issue any securities
4. It is not allowed to contribute capital for establishment of or buy
shares and contributed capital in partnership, limited liability or joint
stock companies
5. The owner can not concurrently be an owner of business households
or general partner in a partnership company.

40
What are private enterprises and their
nature? (Article 188, the law on enterprises 2020)
Owned by an
individual

The owner can not be an

owner of business The owner has
households or partner of unlimited liability
partnership companies
Private enterprises
=
enterprises

No capital contribution
into or purchase of shares
Not allowed to issue
and contributed capital in
shares
partnership, LLC, Joint
stock companies

Having no legal
person status 41
Consequences of having no legal person
status

Can not sue or be sued

under its own name

42
 Who will put their name down as a plaintiff in this case?

103 million dong under a sale of

wood contract

MECHANICAL
SƠN HÀ PRIVATE
Sues CONSTRUCTION JOINT
ENTERPRISE
STOCK COMPANY - 121

The owner of Son Ha private enterprise will write his own name as the
plaintiff on the lawsuit petition
 Summary: Enterprises

Limited liability Joint stock Partnership Private

companies companies companies enterprises

Who can own Both individuals and organisations Individuals

Scope of liability of Limited unlimited

owners
Numbers of owners Not exceeding 50 At least 3 At least 2 Only one

Having legal person Yes no

status
Forms of capital Can not issue shares Issue shares or Can not issue any shares or bonds
mobilisation bonds

Rights to transfer the only transfer to others after
offering to the remaining
capitals members
Freely transfer to only transfer to others if the
remaining general partners Sell the enterprise
others
approve

44
Objectives
• What is enterprise law and its features?
1

• How many types of enterprises are there?

2

• How many ways can enterprises be

3 reorganised?

• How will an enterprise be established?

4
45
Reorganisation, dissolution and bankruptcy

46
How many forms to reorganise (restructure)
an enterprise are there and their
consequences?

Division of Separation of Consolidation of

enterprises enterprises enterprises

Merger of Transformation
enterprises of enterprises

47
Division of enterprises chia
(Article 198, the law on enterprises 2020)

Limited liability or joint stock companies can divide their shareholders,

members and assets to establish two or more new companies, and cease
to exist.
48
Separation of enterprises
(Article 199, the law on enterprises 2020)

Limited liability or joint stock companies (separated companies) can be

separated by transferring part of their assets, rights and obligations to
establish one or more new limited liability or joint stock companies
(separating companies) without ceasing to exist

49
Consolidation of enterprises cty hợp nhất
(Article 200, the law on enterprises 2020)

Two or more companies can be consolidated into a new company and

cease to exist.

50
Merger of enterprises sáp nhập
(Article 201, the law on enterprises 2020)

One or more companies (merged companies) can be merged into other

companies (merging companies) by transferring all lawful assets, rights,
obligations and lawful interests to the merging company, and cease to
exist
51
Transformation of enterprises
(Article 202 - 205, the law on enterprises 2020)

1 Limited liability
company
Joint stock
company

Single-member
2 Joint stock
company
limited liability
company

Limited liability

3 Joint stock
company
company with
two or more
members
Limited liability
Private company, Joint
4 enterprise
stock company,
Partnership 52
company
Summary: re-organisation of enterprises

Forms or reorganisation Which type of enterprises can Consequences of the reorganisation

be reorganised

- Divided companies cease to exist

1 Division of enterprises
- New companies are established
- Limited liability companies
- Joint stock companies
- Separated companies still exist
2 Separation of enterprises
- New companies are established

- New companies are established

3 Consolidation of enterprises - Consolidated companies cease to
- Partnership companies exist
- Limited liability companies
- Joint stock companies
- No new companies
4 Merger of enterprises
- Merged companies cease to exist

- Limited liability companies

Transformation of Transformed enterprises ceases to
5 enterprises
- Joint stock companies exist
- Private enterprises
Dissolution

54
In which cases will an enterprise be dissolved?
(Article 207, the law on enterprises 2020)
• The operation duration expires but no decision on
1 extension of the duration

• As decided by the owner of private enterprises, all

general partners of partnership companies,
2 member’s council or the owner of limited liability
companies, or shareholders’ meetings of Joint
stock companies

• No longer having the minimum number of

3 members as required by law for 6 consecutive
months

• Its enterprise registration certificate is revoked (rút

4 giấy phép kinh doanh)
55
In order to be dissolved, an enterprise must
ensure:

Not currently be involved

To pay off all debts and in a dispute settlement
other property obligations process at courts or
arbitrations

56
What are the
consequences
of the
dissolution?
The enterprise terminates its existences and liquidates its assets

57
 • What is enterprise law and
1 its features?

• How many types of

2 enterprises are there?

• How many ways can Objectives

3 enterprises be reorganised?

• How will an enterprise be

4 established?

58
Establishment
of enterprises

59
Who can establish an
enterprise?
(Article 17, the law on
enterprises 2020)

All individuals and organisations,

who do not fall in the cases listed
in Article 17.2 of the law on
enterprises 2020, can establish an
enterprise.

60
What are included in dossiers of the establishment
(Article 19 – 22, the law on enterprises 2020)

LLC Joint stock Partnership Private

companies companies company enterprises
Registration Registration Registration
application application application
Registration
Charter Charter Charter application
List of founding and
List of members
List of members foreign
shareholders
Copy of a valid Copy of a valid Copy of a valid
personal personal personal
identification paper Copy of a valid
identification paper, identification paper, personal
or establishment, or establishment, Copy of investment identification paper
investment investment documents (applied
documents documents for foreign investors)
Ex: Registration
application

62
Where will investors
submit the establishment
registration document?

Provincial department of planing

and investment where the
enterprise places its transaction
office, or

Via posts, or

Via the business registration

website

63
•The end

64