Guidance on transfer of ownership of contributed assets to cooperatives and cooperative unions in Vietnam as of July 1, 2024

Guidance on transfer of ownership of contributed assets to cooperatives and cooperative unions in Vietnam as of July 1, 2024 (Internet imag- 

Regarding this matter, LawNet would like to answer as follows: 

On June 20, 2024, the National Assembly of Vietnam passed the Law on Cooperative 2023.

Guidance on transfer of ownership of contributed assets to cooperatives and joint cooperative unions in Vietnam as of July 1, 2024

Article 76 of the Law on Cooperative 2023 stipulates the transfer of assets contributed as capital to cooperatives and joint cooperatives as follows:

* Contribution of assets as capital to a cooperative or cooperative union shall be subject to the following provisions:

- For assets whose ownership must be registered or LURs, the member making capital contribution shall follow procedures for transferring the ownership of such assets or LURs to the cooperative or cooperative union in accordance with regulations of law;

- The contribution of assets whose ownership must not be registered shall be recorded in writing.

* The contribution of capital to a cooperative or cooperative union by reaching an agreement that allows the cooperative or cooperative union to enjoy asset-related rights shall be subject to the following provisions:

- The member and the cooperative or cooperative union must enter into a written agreement establishing asset-related rights which must specify the right enjoyment duration in accordance with regulations of law and the charter;

- The right enjoyment duration must be specified in the capital contribution certificate;

- The member must not transfer the ownership of the asset or LUR to the cooperative or cooperative union.

* The record of transfer of contributed assets shall, inter alia, contain the following information:

- Name and head office’s address of the cooperative or cooperative union;

- Full name, contact address, nationality, personal identification number or legal document number of the individual making capital contribution; name, head office’s address, EID number or legal document number of the organization making capital contribution;

- Types and quantities of contributed assets; total value of contributed assets and the ratio of this value to the company’s charter capital of the cooperative or cooperative union;

- Date of transfer; signatures and full names of the individual making capital contribution or authorized representative or legal representative of the individual or organization making capital contribution and of the legal representative of the cooperative or cooperative union.

* The capital contribution is considered completed once the asset ownership, LUT or other asset-related right has been transferred to the cooperative or cooperative union as prescribed in Clause 1 and Clause 2 of Article 76 of the Law on Cooperative 2023.

Regulations on contributed assets of cooperatives and joint cooperative unions in Vietnam as of July 1, 2024

Contributed assets of cooperatives and cooperative unions in Vietnam include:

- Contributed assets include VND, convertible foreign currencies, gold, land use right (LUR), intellectual property rights, technologies, technical secrets, other assets and rights that can be converted into VND.

- Only the individual or organization that has the lawful right to ownership or right to use the asset or another right mentioned in Clause 1 of Article 73 of the Law on Cooperative 2023 may contribute it as capital as prescribed by law.

- With regard to assets that are LURs, vehicles or other assets, the organization or individual may select to contribute that asset or reach an agreement to allow the cooperative or cooperative union to enjoy that asset-related rights in accordance with regulations of the Land Law and Civil Code.

- Members can use their assets for performing business operations of the cooperative or cooperative union under cooperation contracts or linkage agreements signed with the cooperative or cooperative union. These assets shall not be considered as contributed assets and the transfer of their ownership to the cooperative or cooperative union is not required.

(According to Article 73 of the Law on Cooperative 2023)

More details can be found in the Law on Cooperative 2023, which takes effect from July 1, 2024, except for the provisions in Clauses 3 and 4, Article 115 of the Law on Cooperative 2023, which takes effect from September 1, 2023.

The Law on Cooperatives 2012 expires from the effective date of the Law on Cooperative 2023, except for the provisions in Clause 5, Article 115 of the Law on Cooperative 2023.

To Quoc Trinh

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