Vietnam: 11 violations against regulations on business registration and new fines therefor according to Decree No. 50/2016/NĐ-CP

Decree No. 50/2016/NĐ-CP on penalties for administrative violations against regulations on planning and investment replaces Decree No. 155/2013/NĐ-CP of Vietnam’s Government.

Below are 11 violations against regulations on business registration and new fines therefor that businesses, business households, cooperatives, and cooperative unions often encounter.

1. Violations against regulations on deadline for registering adjustments to certificates of enterprise registration

In comparison with the former fine ranging from VND 1,000,000 to VND 2,000,000 specified in Decree No. 155/2013/NĐ-CP, Decree No. 50/2016/NĐ-CP of Vietnam’s Government divides the fine into 3 cases according to the time of delay for registering adjustments beyond the prescribed time. Specifically, according to Article 25 of Decree No. 50/2016/NĐ-CP:

Number of days behind schedule

Fine

1 – 30 days

VND 1,000,000 - VND 5,000,000

31 - 90 days

VND 5,000,000 - VND 10,000,000

91 days or longer

VND 10,000,000 - VND 15,000,000

2. Violations against regulations on publishing information about state-owned enterprises

This is a new regulation, specifically, according to Article 27 of Decree No. 50/2016/NĐ-CP:

Clause 1 Article 27:

Publishing inadequate of inaccurate information about state-owned enterprises

A fine of VND 5,000,000 - VND 10,000,000

Failure to notify the state ownership representative agency and the Ministry of Planning and Investment of the fact that there is more than one legal representative, or to publish in on the enterprise’s website

Authorizing a person to publish information without notifying the state ownership representative agency and the Ministry of Planning and Investment

Failure to send the state ownership representative agency a written explanation for changes to published information

Suspending information publishing without notifying the reasons for such suspension or sending a request for suspension of information publishing to the state ownership representative agency

Clause 2 Article 27:

Failure to periodically publish information

A fine of VND 10,000,000 - VND 15,000,000

Failure to publish the enterprise development strategy on the enterprise’s website and send it to the Ministry of Planning and Investment for publishing

Failure to publish approved annual and 5-year business and investment plans of the enterprise

Failure to prepare a report on result of performance of public and social duties (if any)

Failure to annually publish the progress of enterprise restructuring and innovation, report the administration and organizational structure of the enterprise, financial statement, salary and bonus scheme of the enterprise

3. A fine of VND 2,000,000 - VND 5,000,000 shall be imposed for failure to convert the type of business when the minimum number of members or partners or shareholders cannot be maintained for 6 consecutive months.

4. Violations of reporting and notification obligations

Notifying changes to the enterprise registration content days behind schedule (Article 31 of Decree No. 50/2016/NĐ-CP):

- A warning or A fine of VND 500,000 - VND 1,000,000 shall be imposed for notifying changes to the enterprise registration content 1 – 30 days behind schedule.

- A warning or A fine of VND 1,000,000 - VND 2,000,000 shall be imposed for notifying changes to the enterprise registration content 31 – 90 days behind schedule.

- A warning or A fine of VND 2,000,000 - VND 5,000,000 shall be imposed for notifying changes to the enterprise registration content 91 days or longer behind schedule.

A fine of VND 1,000,000 - VND 2,000,000 shall be imposed for failure to notify or notify on time the business registration authority of information or changes to information about the name, nationality, passport number, permanent residence, quantity and type of shares of a shareholder who is a foreigner; name, enterprise ID number, headquarters address, quantity and type of shares of a shareholder that is a foreign organizations and name, nationality, passport number and permanent residence of the representative thereof if the joint-stock company is unlisted (Point dd Clause 1 Article 32 of Decree No. 50/2016/NĐ-CP).

A fine of VND 2,000,000 - VND 3,000,000 shall be imposed for registering a business suspension without notifying the suspension of the branch, representative office, or business location (Point a Clause 2 Article 32 of Decree No. 50/2016/NĐ-CP).

A fine of VND 2,000,000 - VND 3,000,000 shall be imposed for using, changing, canceling the stamp design, changing the quantity of stamps of the enterprise or its branch or representative office without notifying the business registration authority for posting on the National Enterprise Registration Portal (Point b Clause 2 Article 32 of Decree No. 50/2016/NĐ-CP).

5. Violations against regulations related to the Control Board

A fine of VND 2,000,000 - VND 5,000,000 shall be imposed for failure to have a Control Board with satisfactory composition (a fine of VND 1,000,000 - VND 2,000,000 according to previous regulation).

6. Violations against regulations on enterprise dissolution

A fine of VND 5,000,000 - VND 10,000,000 shall be imposed for failure to send or punctually send the decision on enterprise dissolution and minutes of meeting to the business registration authority, tax authority, and employees (Point b Clause 1 Article 36 of Decree No. 50/2016/NĐ-CP).

7. Violations against regulations on private enterprises

According to Decree No. 50/2016/NĐ-CP, a fine of VND 5,000,000 - VND 10,000,000 shall be imposed for any of the following violations:

- Contributing capital or purchasing capital contributions/shares of a partnership, limited liability company, or joint-stock company;

- Failure to adequately record the increases or decreases of capital; the entire capital and assets including loan capital and leased assets serving the enterprise’s operation in the accounting books or financial statement of the enterprise.

8. Violations against regulations on parent company-subsidiary company relationships

According to Clause 1 Article 39 of Decree No. 50/2016/NĐ-CP, a fine of VND 15,000,000 - VND 20,000,000 shall be imposed upon:

- Any subsidiary that contributes capital to or buy shares of the parent company;

- Subsidiaries of the same parent company contribute capital or buy shares to obtain cross-ownership;

- Subsidiaries of the same parent company having at least 65% state capital contribute capital to establish an enterprise.

9. A fine of VND 15,000,000 - VND 20,000,000 shall be imposed for failure to use at least 51% of annual profit for reinvestment in achievements of social or environmental objectives as registered (Article 40 of Decree No. 50/2016/NĐ-CP).

10. Violations against regulations on business household suspension

According to Clause 2 Article 42 of Decree No. 50/2016/NĐ-CP, a fine of VND 1,000,000 - VND 2,000,000 shall be imposed for any of the following violations:

- Failure to inaugurate the business within 06 months from the issuance date of the certificate of business household registration;

- Suspending the business for more than 6 consecutive months without notifying the business registration authority of the district.

11. Violations against regulations for cooperatives

Decree No. 50/2016/NĐ-CP specifies violations against regulations for cooperatives as follows:

Violation

Fine

Using sources of capital that are undistributable assets of the cooperative or cooperative association to contribute capital, buy shares, or establish an enterprise

VND 5,000,000 - VND 10,000,000

Contributing capital, buying shares, establishing an using more than 50% of the charter capital of the cooperative or cooperative association according to the latest financial statement before the time of capital contribution, share purchase, or enterprise establishment

VND 5,000,000 - VND 10,000,000

Failure to notify the issuer of the certificate of registration of the capital contribution, share purchase, establishment of the enterprise, cooperative or cooperative association

VND 5,000,000 - VND 10,000,000

Failure to adequately, accurately, and promptly provide information about the business operation, finance, income distribution, and other information to the members or associate cooperatives as specified in the Charter

VND 1,000,000 - VND 2,000,000

Illegal division, consolidation, or merger of cooperatives

VND 2,000,000 - VND 5,000,000

Details are specified in Decree No. 50/2016/NĐ-CP of Vietnam’s Government, effective from July 15, 2016.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE

23 lượt xem
Related Document
  • Address: 19 Nguyen Gia Thieu, Vo Thi Sau Ward, District 3, Ho Chi Minh City
    Phone: (028) 7302 2286
    E-mail: info@lawnet.vn
Parent company: THU VIEN PHAP LUAT Ltd.
Editorial Director: Mr. Bui Tuong Vu - Tel. 028 3935 2079
P.702A , Centre Point, 106 Nguyen Van Troi, Ward 8, Phu Nhuan District, HCM City;