Are Private Enterprises Limited in the Number of Branches They Can Establish?
Are private enterprises restricted in the number of branches they can establish?
Question:
Are private enterprises restricted in the number of branches they can establish?
Answer:
Private enterprises are a type of business entity. Clause 1, Article 45 of the Law on Enterprises 2020 stipulates:
Enterprises have the right to establish branches and representative offices both domestically and internationally. An enterprise may establish one or multiple branches and representative offices in a locality according to administrative boundaries.
Thus, not only private enterprises but also other types of enterprises can establish multiple branches and are not limited in number.
Are private enterprise owners responsible for previous debts after selling the enterprise?
Question:
When selling a private enterprise to another person, does the owner of the private enterprise remain responsible for the debts incurred before the sale?
Answer:
Article 192 of the Law on Enterprises 2020 stipulates about the sale of private enterprises as follows:
The owner of a private enterprise has the right to sell their private enterprise to other individuals or organizations.
After selling the private enterprise, the owner of the private enterprise still remains responsible for the debts and other property obligations of the private enterprise arising during the period before the transfer date, except in cases where the owner of the private enterprise, the buyer, and the creditors of the private enterprise have another agreement.
The owner of the private enterprise and the buyer must comply with labor laws.
The buyer of the private enterprise must register the change of the owner of the private enterprise according to the provisions of this Law.
When selling a private enterprise to another person, the owner of the private enterprise still remains responsible for the debts of the enterprise arising during the period before the transfer date.
However, if the owner of the private enterprise, the buyer, and the creditors have another agreement, then the agreement shall be followed.
Can a business household owner establish a private enterprise?
Question:
I am the owner of a small handmade product manufacturing business household in Da Nang. In the near future, I want to open an additional private enterprise. Is it possible for me to be both a business household owner and a private enterprise owner simultaneously?
Answer:
Based on the provisions in Clause 1, Article 188 of the Law on Enterprises 2020:
A private enterprise is an enterprise owned by an individual who is solely responsible for all activities of the enterprise with their entire assets.
Clause 3 of this Article simultaneously stipulates:
Each individual is only entitled to establish one private enterprise. The owner of a private enterprise is not allowed to concurrently be the owner of a business household or a general partner of a partnership.
Therefore, according to this provision, the owner of a private enterprise cannot simultaneously be the owner of a business household. Hence, in the current situation, as you are the owner of a business household, you are not allowed to establish a private enterprise where you are the owner.
Sincerely!
