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.
Article table of contents
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:
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:
Clause 2 Article 27:
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:
Details are specified in Decree No. 50/2016/NĐ-CP of Vietnam’s Government, effective from July 15, 2016.
- Key word:
- Decree No. 50/2016/NĐ-CP
