What is an Economic Organization?

Currently, there are no specific legal documents that define the concept of an economic organization. However, we can envision an economic organization as a group of people coming together to form an organization engaged in economic activities (production, business, marketing, etc.) with the aim of seeking profit.

Based on the provisions in Clause 27, Article 3 of the Land Law: “An economic organization includes enterprises, cooperatives, and other economic organizations as stipulated by civil law, excluding foreign-invested enterprises.”

From the above provision, we see that an economic organization must possess the characteristics of enterprises, cooperatives, etc., such as:

- Established according to legal regulations;- Engaging in production and business activities;- Having a distinct name, assets, and a business address;- Having organizational and operational charters.

However, it should be clearly determined that a household is not an economic organization. A household that engages in business activities, registers a business at a location, employs no more than ten workers, does not have a seal, and is responsible for its business activities with all its assets is still just a household business, not an economic organization. If a household business employs more than 10 workers, it must register as an enterprise according to the Enterprise Law, then it becomes an economic organization.

Economic organizations can operate in various forms:

- State-owned economy that is consolidated and developed, especially in key sectors and fields, playing a leading role in the national economy.- Collective economy formed by citizens contributing capital and labor in cooperative production and business, organized in various forms following principles of voluntariness, democracy, and mutual benefit.- Private individual economy, private capitalist economy, free to choose forms of production and business organization, allowed to establish enterprises without scale restrictions in sectors and trades beneficial to the national economy and public livelihood.- Family economy encouraged to develop.

Each type of economic organization will have its own regulations on organization and operation.

More details can be found in specialized laws and guiding documents:

- Enterprise Law- Commercial Law- Investment Law- ...

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