Vietnam: Rights and obligations of owners of household businesses are regulated for the first time

A household business is established by an individual or family household members that shall take responsibility for business operations of the household business with all of their property. If a household business is established by members of a family household, one of them shall be authorized to act as the representative of the household business. The individual applying for registration of household business or the person authorized by the family household members to act as the representative of the household business shall be the owner of the household business.

To improve regulations on household businesses, the Government of Vietnam has issued the Decree No. 01/2021/NĐ-CP clearly defining the rights and obligations of owners of household businesses and family household members in order to ensure business rights and obligations of business households. According to Article 81 the Decree No. 01/2021/NĐ-CP of the Government of Vietnam, the rights and obligations of owners of household businesses are specified as following:

- The owner of a household business shall fulfill tax and other financial liabilities, and perform business operations of the household business in accordance with regulations of law;

- The owner of a household business shall represent the household business in civil proceedings, as the plaintiff, defendant, person with relevant interests and duties in front of the court or arbitral tribunal, and perform other rights and obligations as prescribed by law;

- The owner of a household business may hire another person to manage and direct business operations of the household business. In this case, the owner and other family household members applying for household business registration remain liable for debts and other asset-related liabilities arising from business operations;

- The owner and other family household members applying for household business registration shall be liable for all business operations of the household business;

- They shall perform other rights and obligations as prescribed by law.

More details at the Decree No. 01/2021/NĐ-CP of the Government of Vietnam, effective from January 04, 2021.

Le Thanh

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