The Law on Cooperatives in 2023 will take effect on 01/7/2024 in Vietnam

The Law on Cooperatives in 2023 will take effect on 01/7/2024 in Vietnam

The National Assembly has just promulgated the Law on Cooperatives in 2023. Specifically:

- The Law on Cooperatives in 2023 will take effect from July 1, 2024, except for the provisions in Clause 3 and Clause 4, Article 115 of the Law on Cooperatives in 2023, which will take effect from September 1, 2023.

- During the time the National Population Database has not been connected to the database on registration of cooperative groups, cooperatives and cooperative unions, individuals who are Vietnamese citizens can use copies of legal documents to replace personal identification numbers when carrying out administrative procedures according to the provisions of the Law on Cooperatives in 2023.

Is it permissible for cooperatives and cooperative unions that are established before 01/7/2024 in Vietnam to re-register their organizations?

Pursuant to Article 115 of the Law on Cooperatives in 2023 stipulating as follows:

Transition

1. Cooperatives and cooperative unions that are established before the effective date of this Law may continue their operation without following re-registration procedures if their organizational structure and operation are not contrary to this Law; their charters must be modified within 18 months from the effective date of this Law if they are not conformable with the provisions of this Law.

2. Artels that are established before the effective date of this Law and have to follow registration procedures as prescribed in Clause 2 Article 107 of this Law must complete registration procedures as prescribed in this Law within 18 months from the effective date of this Law.

3. Cooperatives and cooperative unions shall terminate their internal credit extension activities performed under the Law on Cooperatives No. 23/2012/QH13 from September 01, 2023. Regarding the internal credit contracts signed before September 01, 2023, contracting parties shall continue performing their rights and obligations under the signed contracts but shall not extend such contracts.

4. A cooperative that has established, contributed capital to or purchased shares of an enterprise and this enterprise that is also a member of that cooperative shall not be allowed to increase the cooperative’s stakes or shares in that enterprise as of September 01, 2023, and must comply with the provisions of Articles 81 and 82 of this Law within 24 months from September 01, 2023.

5. State policies for cooperatives and cooperative unions promulgated under the Law on Cooperatives No. 23/2012/QH13 may continue to be applied until they are expired or documents replacing or repealing such policies are available.

As regulations above, cooperatives and cooperative unions that are established before the effective date of the Law on Cooperatives in 2023 may continue their operation without following re-registration procedures if their organizational structure and operation are not contrary to the Law on Cooperatives in 2023.

Charters of cooperatives and cooperative unions must be modified within 18 months from 01/7/2024 if they are not conformable with the provisions of the Law on Cooperatives in 2023.

What are prohibited acts regarding cooperatives and cooperative unions in Vietnam?

Pursuant to Article 7 of the Law on Cooperatives in 2023 stipulating prohibited acts regarding cooperatives and cooperative unions in Vietnam as follows:

- Regulatory authorities are prohibited from:

+ Issuing cooperative or artel registration certificate to ineligible applicants; refusing to issue cooperative or artel registration certificate to applicants that meet eligibility requirements laid down in the Law on Cooperatives in 2023;

+ Obstructing the performance of legitimate rights and obligations of artels, cooperatives, cooperative unions and their members as prescribed in the Law on Cooperatives in 2023;

+ Giving assistance or incentives to artels, cooperatives or cooperative unions without complying with principles and provisions on eligible entities, authority, contents and procedures laid down in laws;

+ Abusing their positions and powers to violate regulations of law on assistance and provision of incentives for artels, cooperatives and cooperative unions;

+ Delaying, obstructing or harassing artels, cooperatives, cooperative unions and relevant organizations and individuals during registration, operation of, or provision of assistance to, artels, cooperatives or cooperative unions;

+ Deliberately reporting or providing incorrect or untruthful information on assistance or incentives for artels, cooperatives or cooperative unions.

- Artels, cooperatives and cooperative unions are prohibited from:

+ Operating without obtaining registration certificate as prescribed in the Law on Cooperatives in 2023; operating without satisfying eligibility requirements laid down in the Law on Cooperatives in 2023 and relevant laws;

+ Providing untruthful or incorrect information in the application for registration of artel, cooperative or cooperative union;

+ Improperly implementing or applying principles for organization, management and operation laid down in the Law on Cooperatives in 2023;

+ Providing false or untruthful information or forging documents for personal gain;

+ Using resources for the purposes other than the intended ones.

- Members of artels, cooperatives and cooperative unions are prohibited from:

+ Abusing positions and powers to obtain personal gain or interests for a group of members;

+ Providing untruthful information for their artels, cooperatives and cooperative unions.

Note: The Law on Cooperatives in 2023 will take effect from July 1, 2024, except for the provisions in Clause 3 and Clause 4, Article 115 of the Law on Cooperatives in 2023, which will take effect from September 1, 2023.

Best regards!