Vietnam: If a person is an owner of a sole proprietorship, can he/she become a general partner of a partnership?
If a person is an owner of a sole proprietorship, can he/she become a general partner of a partnership?
Pursuant to Article 188 of the 2020 Law on Enterprises in Vietnam on sole proprietorships as follows:
Sole proprietorships
1. A sole proprietorship is an enterprise owned by a single individual whose liability for its entire operation is equal to his/her total assets.
2. A sole proprietorship must not issue any kind of securities.
3. An individual may only establish one sole proprietorship. The owner of a sole proprietorship must not concurrently own a household business or hold the position of general partner of a partnership.
4. A sole proprietorship must not contribute capital upon establishment or purchase shares or stakes of partnerships, limited liability companies or joint stock companies.
Thus, the owner of a sole proprietorship cannot simultaneously become a general partner of a partnership.
Vietnam: If a person is an owner of a sole proprietorship, can he/she become a general partner of a partnership?
What are the regulations on the capital of the owner of a sole proprietorship in Vietnam?
Pursuant to Article 189 of the 2020 Law on Enterprises in Vietnam, the investment capital of sole proprietorship owners is as follows:
Capital of sole proprietorships
1. 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.
2. All the capital, including loans and leased assets serving the sole proprietorship’s operation, shall be fully recorded in its accounting books and financial statements as prescribed by law.
3. 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.
Thus, 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.
At the same time, all the capital, including loans and leased assets serving the sole proprietorship’s operation, shall be fully recorded in its accounting books and financial statements as prescribed by law.
In addition, during its operation, the sole proprietorship’s owner is entitled to increase or decrease its capital.
Is it allowed to hire outsiders to administer a sole proprietorship in Vietnam?
Pursuant to the provisions of Article 190 of the 2020 Law on Enterprises in Vietnam on the administration of sole proprietorships as follows:
Administration of sole proprietorships
1. The sole proprietorship’s owner has total authority to decide all of its business activities, use of post-tax profit and fulfillment of other financial obligations as prescribed by law.
2. The owner may directly or hire another person to hold the position of Director/General Director. In case of a hired Director/General Director, the owner is still responsible for every business activity of the enterprise.
3. 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.
Thus, the sole proprietorship’s owner has total authority to decide all of its business activities, use of post-tax profit and fulfillment of other financial obligations as prescribed by law.
The owner may directly or hire another person to hold the position of Director/General Director.
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.
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