Draft Law on Enterprises 2020 is in the process of public consultation. Notably, this Draft includes additional regulations concerning household businesses in Vietnam.
Article table of contents
Hanoi-Vietnam: Household businesses will be specified in Law on Enterprises 2020 (Illustrative photo)
In Article 1, Draft Law on Enterprises 2020, household businesses have been added to the regulated entities of the Law on Enterprises alongside other types of enterprises currently.
Article 1. Scope of regulation
This Law stipulates the establishment, organization of management, reorganization, dissolution, and related activities of enterprises, including limited liability companies, joint-stock companies, partnerships, and sole proprietorships; regulations on corporate groups and household businesses.
At the same time, the Draft Law on Enterprises 2020 has also added Chapter VIIa on household businesses (including Articles 187b, 187c, 187d, 187dd, 187e), continuing to acknowledge the existence of household businesses alongside other legal types such as sole proprietorships, partnerships, limited liability companies, and joint-stock companies; as a suitable form of business for small, micro, simple, and agile business activities.
An individual or family member can register household businesses. If family members register a household business, they must authorize one member according to civil law to register in their name.
Individuals who register a household business and authorized family members who register the household business are called household business owners. Each individual is only entitled to register one household business. The household business owner cannot simultaneously be the owner of a sole proprietorship or a member of a partnership.
Household businesses are not entitled to contribute capital to establish or purchase shares, capital contributions in partnerships, limited liability companies, or joint-stock companies.
Thus, if the Draft Law on Enterprises 2020 is passed, household businesses will officially be included in the Law on Enterprises, as one of the regulated entities in the Law alongside other types of businesses such as sole proprietorships, partnerships, limited liability companies, and joint-stock companies.
Nguyen Trinh
- Key word:
- household businesses
- Vietnam
