Can the owner of a sole proprietorship purchase shares?
Can the owner of a sole proprietorship buy shares?
I am currently the owner of a small-scale sole proprietorship operating in the garment manufacturing sector. Can I buy shares of a joint-stock company?
Answer:
Based on the provisions of Clause 1, Article 188 of the Law on Enterprises 2020:
A sole proprietorship is an enterprise owned by an individual who is solely responsible with all of his or her assets for all activities of the enterprise.
Clauses 3 and 4 of this Article also stipulate that:
- Each individual is only entitled to establish one sole proprietorship. The owner of the sole proprietorship shall not concurrently be the owner of a household business or a partner of a partnership.
- A sole proprietorship is not entitled to contribute capital to establish or to buy shares or stakes in partnerships, limited liability companies, or joint-stock companies.
According to this provision, the owner of a sole proprietorship cannot simultaneously be the owner of a household business and a partner of a partnership. However, regarding contributing capital to establish or buying shares or stakes in partnerships, limited liability companies, or joint-stock companies, these rights are restricted only for the sole proprietorship itself and there are no restrictions on the owner of the sole proprietorship.
Therefore, the owner of a sole proprietorship is fully entitled to contribute capital, establish or buy shares, and stakes in joint-stock companies, limited liability companies, and partnerships.
Can the owner of a sole proprietorship be the owner of a household business?
I am currently dealing in cosmetics as a sole proprietorship. I want to open a new product line for sale in my hometown and establish a household business, with myself as the owner noted in the documents. Is this legally permissible according to the new enterprise law?
Answer:
Based on Clause 3, Article 188 of the Law on Enterprises 2020, the regulations are as follows:
- A sole proprietorship is an enterprise owned by an individual who is solely responsible with all of his or her assets for all activities of the enterprise.
- A sole proprietorship is not permitted to issue any type of securities.
- Each individual is only entitled to establish one sole proprietorship. The owner of the sole proprietorship shall not concurrently be the owner of a household business or a partner of a partnership.
Thus, in accordance with these regulations, the owner of a sole proprietorship cannot concurrently be the owner of a household business. Therefore, you cannot be both the owner of a sole proprietorship and the owner of a household business simultaneously.
The owner of a sole proprietorship is not required to hire a Director
In 2021, I plan to establish a sole proprietorship named Xuan Ly with myself as the owner. I have heard that for this type of business, it is mandatory to hire a Director. According to the new Law on Enterprises, can I be the Director or do I have to hire someone else?
Answer:
Based on Clause 2, Article 190 of the Law on Enterprises 2020 on the management of a sole proprietorship:
The owner of a sole proprietorship may directly manage or hire someone else to act as the Director or General Director to manage and run business activities; in this case, the owner of the sole proprietorship still bears responsibility for all business activities of the sole proprietorship.
Thus, according to these regulations, you can directly act as the Director of the sole proprietorship without being required to hire a Director.
Respectfully!
