New Regulations on State-Owned Enterprises from January 01, 2021

New regulations on State-Owned Enterprises from January 01, 2021 - Illustrative image.

According to Clause 11, Article 4 of the Enterprise Law 2020, state-owned enterprises include enterprises where the State holds more than 50% of the charter capital, or the total number of voting shares as prescribed in Article 88 of this Law.

To be specific, in accordance with Article 88 of the Enterprise Law 2020, state-owned enterprises are organized and managed in the form of limited liability companies or joint-stock companies, including:

- Enterprises where the State holds 100% of the charter capital;- Enterprises where the State holds more than 50% of the charter capital or the total number of voting shares, excluding enterprises where the State holds 100% of the charter capital.

Among the above, enterprises where the State holds 100% of the charter capital include:

- One-member limited liability companies where the State holds 100% of the charter capital, which are the parent companies of state economic groups, the parent companies of state corporations, or the parent companies in parent-subsidiary company groups;- Independent one-member limited liability companies where the State holds 100% of the charter capital.

Moreover, enterprises where the State holds more than 50% of the charter capital or the total number of voting shares include:

- Limited liability companies with two or more members, or joint-stock companies where the State holds more than 50% of the charter capital or the total number of voting shares, which function as the parent companies of economic groups, state corporations, or within parent-subsidiary company groups;- Independent limited liability companies with two or more members, or joint-stock companies where the State holds more than 50% of the charter capital or the total number of voting shares.

The detailed full text of the regulations can be viewed at the Enterprise Law 2020, effective from January 01, 2021.

Le Vy

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