The rights to establish, contribute capital, buy shares/stakes and manage enterprises in Vietnam

What is enterprise?

Pursuant to the provisions of the Law on Enterprises 2020, enterprise means an organization that has a proper name, assets, premises, is established or registered in accordance with law for business purposes.

The rights to establish, contribute capital, buy shares/stakes and manage enterprises in Vietnam (Internet image)

The rights to establish, contribute capital, buy shares/stakes and manage enterprises in Vietnam

Pursuant to Article 17 of the Law on Enterprises 2020, organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law, except for the following organizations and individuals who do not have the right to establish and manage enterprises in Vietnam:

(1) State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their own interests;

(2) Officials and public employees defined by the Law on Officials and the Law on Public Employees;

(3) Commissioned officers, non-commissioned officers, career military personnel, military workers and public employees in agencies and units of Vietnam People’s Army; commissioned officers, non-commissioned officers and police workers in police authorities and units, except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises;

(4) Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1 Article 88 of the Law on Enterprises 2020, except those who are designated as authorized representatives to manage state-owned stakes in other enterprises;

(5) Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons;

(6) People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, has limited legal capacity or is incapacitated, is not able to control his/her own behaviors, is banned by the court from holding certain positions or doing certain works; other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law.

If requested by the business registration authority, the applicant shall submit the judicial records;

(7) Juridical persons that are banned from business operation or banned from certain fields as prescribed by the Criminal Code.

Organizations and individuals have the right to contribute capital, buy shares and stakes of joint stock companies, limited liability companies and partnerships in accordance with the Law on Enterprises 2020, except:

- State authorities, People’s armed forces contributing state-owned assets to enterprises to serve their own interests;

- The entities that are not allowed to contribute capital to enterprises prescribed by the Law on Officials, Law on Public Employees, and Anti-corruption Law.

The act of serving one’s own interests mentioned in Point a Clause 2 and Point a Clause 3 of Article 17 of the Law on Enterprises 2020 means the use of incomes from business operation, capital contribution, acquisition of shares/stakes for any of the following purposes:

- Any kind of distribution to some or all of the persons specified in Point b and Point c Clause 2 of Article 17 of the Law on Enterprises 2020:

= Officials and public employees defined by the Law on Officials and the Law on Public Employees;

= Commissioned officers, non-commissioned officers, career military personnel, military workers and public employees in agencies and units of Vietnam People’s Army; commissioned officers, non-commissioned officers and police workers in police authorities and units, except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises;

- Inclusion in the operating budget of the organization/unit against state budget laws;

- Establishment or contribution to an internal fund of the organization/unit.

Mai Thanh Loi

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