Requirements for joining a cooperative group in Vietnam

Requirements for joining a cooperative group in Vietnam (Internet image) 

1. What is a cooperative group?

According to Clause 1, Article 3 of Decree 77/2019/ND-CP, a cooperative group is an organization without legal status, formed on the basis of a cooperation contract, consisting of two or more individuals or legal entities of their own will to establish, jointly contribute assets and efforts to perform certain jobs, mutually benefit, and jointly take responsibility.

2. Requirements for joining a cooperative group in Vietnam

To become a member of a cooperative group, an individual or organization must meet the conditions specified in Article 7 of Decree 77/2019/ND-CP, specifically as follows:

- The individual is a Vietnamese citizen with appropriate civil act capacity as prescribed in Articles 16 to 24 of the Civil Code 2015, the Labor Code 2019 and other relevant laws.

- The organization is a Vietnamese legal person, established and operating in accordance with Vietnamese law, having legal capacity suitable to the business field of the cooperative group.

- Voluntarily join and accept the content of the cooperation contract.

- Commitment to contribute assets and efforts according to the provisions of the cooperation contract.

- Other conditions as prescribed in the cooperation contract

3. Obligations and rights of cooperative group members in Vietnam

3.1. Rights of cooperative group members

Specifically, in Article 8 of Decree 77/2019/ND-CP, the rights of cooperative group members include

- Receiving the profits and profits obtained from the activities of the cooperative group.

- Participating in deciding on issues related to the performance of cooperation contracts; managing and supervising the activities of cooperative groups.

- Withdrawing from the cooperative group when there is a legitimate reason and the consent of more than fifty percent (50%) of the total number of members of the cooperative group or according to the conditions agreed in the cooperation contract.

- Other rights according to the provisions of the cooperation contract and relevant laws.

3.2. Obligations of cooperative group members

Members of the cooperative group must perform the obligations specified in Article 9 of Decree 77/2019/ND-CP, specifically as follows:

- Participating in deciding on issues related to the implementation of cooperation contracts; supervising the activities of the cooperative groups

- Compensation for damage caused by their own fault.

- Following the provisions of the cooperation contract on the principle of equality, mutual benefit, and ensuring the common interests of the cooperative group.

- Contributing fully and on time the assets and efforts committed in the cooperation contract.

- Performing other obligations according to the provisions of the cooperation contract and relevant laws.

4. Cases of termination of cooperative group membership in Vietnam

Membership in a cooperative group is terminated when one of the following cases occurs:

- The cooperative group terminates its operation according to the provisions of Article 14 of Decree 77/2019/ND-CP;

- A member of a cooperative group is an individual who dies, or is declared dead by a court, except for the case specified at Point a, Clause 1, Article 27 of Decree 77/2019/ND-CP;

- A member of a cooperative group being a legal entity ceases to exist, except for the case specified in Clause 4, Article 27 of Decree 77/2019/ND-CP;

- Members of the cooperative group voluntarily withdraw from the cooperative group as prescribed in Clause 3, Article 8 of Decree 77/2019/ND-CP;

- A member of the cooperative group seriously violates the provisions of the cooperation contract and other relevant laws.

(Clause 1, Article 11 of Decree 77/2019/ND-CP).

5. The procedure for new admissions to the cooperative group in Vietnam

The cooperative group's members must agree on the process and conditions for adding members and include them in the cooperation contract.

In the event that the cooperation contract does not stipulate, members of the cooperative group may be added according to the process specified in Article 10 of Decree 77/2019/ND-CP, specifically as follows:

- Individuals or legal entities that satisfy the conditions specified in Section 2 and wish to join the cooperative group may write an application or express their wish directly to the leader of the cooperative group (or the person authorized by the members of the cooperative group).

- The leader of the cooperative group (or the person authorized by the members of the cooperative group) organizes consultations with the members of the cooperative group, directly or indirectly, on the issue of adding members to the cooperative group.

- Individuals and legal entities are recognized as members of a cooperative group when more than fifty percent (50%) of the total number of cooperative group members agree to supplement and sign their names in the cooperation contract.

Thanh Rin

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