Vietnam: On January 04, 2021, provision on a household business owned by a group of individuals is abolished

Household business establishment and registration entities is an important content amended at the Decree No. 01/2021/NĐ-CP on enterprise registration. There have been many new changes in business household registration.

nhóm cá nhân, thành lập hộ kinh doanh, Nghị định 01/2021/NĐ-CP

According to Article 79 of the Decree No. 01/2021/NĐ-CP, household business establishment and registration entities are specified as follows:

A household business is established by an individual or family household members that shall take responsibility for business operations of the household business with all of their property. If a household business is established by members of a family household, one of them shall be authorized to act as the representative of the household business. The individual applying for registration of household business or the person authorized by the family household members to act as the representative of the household business shall be the owner of the household business.

Thus, up to now, only 02 subjects have the right to establish household businesses:

- An individual;

- Family household members.

Note: These 02 subjects must be Vietnamese citizens and have full legal capacity as prescribed in the Civil Code of Vietnam, except the following cases:

- Minors; people with limited legal capacity; incapacitated people; people having difficulties in controlling their behaviors;

- 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, or is prohibited by the court from holding certain positions or doing certain works;

- Other cases prescribed by relevant laws.

Compared to Article 66 of the Decree No. 78/2015/NĐ-CP:

Household business owned by an individual, a group of individuals being Vietnamese citizens from 18 years of age or older, have full civil capacity, or owned by a household may only register one business location, employs fewer than 10 employees, and take responsibility for the business operation with all of their property.

It can be seen that the Decree No. 78/2015/NĐ-CP recognized an individual, a group of individuals and a household as entities of household business establishment and registration. However, when the Decree No. 01/2021/NĐ-CP of the Government of Vietnam officially takes effect, a group of individuals will not be allowed to establish a household business.

Le Thanh

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