Do I have to establish a sole proprietorship or a business household when opening a clothing shop in Vietnam?
I am in HCM City, I want to open a retail clothing store, should I establish a sole proprietorship or a business household? Please get back to me. Thank you.
Article 183 of the 2014 Enterprise Law stipulates:
1. A sole proprietorship is a enterprise owned by an individual who is responsible for its operation with all of his/her property.
2. Sole proprietorships must not issue any kind of shares.
3. Each individual may establish only one sole proprietorship. The owner of a sole proprietorship must not concurrently be a household business owner or partner of a partnership.
4. Sole proprietorships must not contribute capital to establishment, buy shares or stakes in partnerships, limited liability companies, or joint-stock companies.
And according to Article 66 of Decree 78/2015/ND-CP:
1. Business household owned by an individual, a group of individuals being Vietnamese citizens from 18 years of age or older, have full civil capacity, or owned by a household may only register one business location, employs fewer than 10 employees, and take responsibility for the business operation with all of their property.
2. Households engaged in agriculture, forestry, aquaculture, salt productions, street vendors, nomadic businesspeople, and service providers earning low revenues are not required to registered, except for conditional business lines. The People’s Committees of provinces shall specify the low revenues applied within their provinces.
3. Any business household that hires 10 employees or more must apply for enterprise registration as prescribed.
Therefore, it is possible to summarize some different characteristics between business households and sole proprietorships in detail through the following table:
Legal basis:
The 2014 Enterprise Law
Decree 78/2015/ND-CP
Decree 96/2015/ND-CP
|
Criteria |
Sole proprietorship |
Business household |
|
Number of employees |
Unlimited number of employees. |
Employ no more than 10 employees. If it is regular and has more than 10 employees, it must be converted into an enterprise. (Article 66 of Decree 78/2015/ND-CP) |
|
Business location |
Unlimited business location: has a stable transaction office, can establish branches, representative offices,... (Article 45 of the 2014 Enterprise Law) |
More limited than sole proprietorships: business can only be registered in one location. Households doing nomadic business are allowed to do business outside the location registered with the registration agency but must notify the tax agency and market management agency of the place where their headquarters is registered and where their operations are conducted. business activity. (Article 66, Article 72 of Decree 78/2015/ND-CP) |
|
Owner's right to decide |
Sole proprietorship owners have the right to lease and sell the business. (Articles 186, 187 Enterprise Law 2014) |
Not allowed to rent or sell business households |
|
Business registration agency |
Business registration agency under the Provincial People's Committee |
Business registration agency under the district People's Committee. (Clause 1b, Article 13, Decree 78/2015/ND-CP) |
|
Stamp |
Have. |
There are no specific regulations. |
From there, it can be affirmed that each model will have different advantages and disadvantages. Therefore, you can compare to choose a suitable model for yourself.
Best Regards!
