Does the owner of a sole proprietorship in Vietnam who hires someone else as a director still have to be responsible for business activities?

Does the owner of a sole proprietorship in Vietnam who hires someone else as a director still have to be responsible for business activities?

Pursuant to Article 190 of the Law on Enterprises in 2020 stipulating administration of sole proprietorships as follows:

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.

Therefore, as the owner of a sole proprietorship, you can hire someone else to be the director to manage and operate the business activities, but you are still responsible for all business activities of the enterprise.

Does the owner of a sole proprietorship in Vietnam who hires someone else as a director still have to be responsible for business activities? - Source: Internet

Can the owner of a sole proprietorship sell his enterprise in Vietnam?

Pursuant to Article 192 of the Law on Enterprises in 2020 stipulating selling a sole proprietorship as follows:

1. The sole proprietorship’s owner is entitled to sell it to another organization or individual.

2. After selling the sole proprietorship, the owner is still responsible for its debts and liabilities that occur before the date of transfer, unless otherwise agreed upon by the owner, the buyer and the creditors.

3. The sole proprietorship’s owner and the buyer shall comply with labor laws.

4. The buyer of the sole proprietorship shall register the change of owner in accordance with this Law.

The sole proprietorship’s owner is entitled to sell it to another organization or individual as prescribed by above regulations.

Can the owner of a sole proprietorship delegate someone else to manage the enterprise when he is detained in Vietnam?

Pursuant to Article 193 of the Law on Enterprises in 2020 stipulating exercising the owner’s rights in special cases as follows:

1. In case the sole proprietorship’s owner is detained, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, he/she shall authorize another person to perform his/her rights and obligations.

2. In case the owner dies, this/her heir or one of the legal heirs or designated heirs shall be the owner under an agreement among the heirs. In case such an agreement cannot be reached, the sole proprietorship shall be converted into a company or dissolved.

3. In case the owner dies without an heir or the heir refuses the inheritance or is disinherited, the owner’s assets shall be handled in accordance with civil laws.

4. In case owner is incapacitated, has limited legal capacity or has difficulty controlling his/her behaviors, his/her rights and obligations shall be performed through his/her representative.

5. In case the sole proprietorship’s owner is banned by the court to do certain jobs in the enterprise’s business lines, the owner shall suspend or stop doing business in the relevant business lines under the court's decision or transfer the sole proprietorship to another individual or organization.

As regulations above, in case the sole proprietorship’s owner is detained, he/she shall authorize another person to perform his/her rights and obligations.

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