What are the cases of termination of membership of cooperatives in Vietnam?

What are the cases of termination of membership of cooperatives in Vietnam? (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. What are the cases of termination of membership of cooperatives in Vietnam?

Article 33 of the Law on Cooperatives 2023 stipulates the termination of membership

(1) The membership of an official member shall be terminated in the following cases:

- A member that is an individual dies; is declared by a Court dead, missing or incapacitated, or to be a person with limited capacity for civil acts or difficulty in awareness or control of his/her own acts;

- A member that is an organization ceases to exist, is dissolved or declared bankrupt;

- The cooperative ceases to exist, is dissolved or declared bankrupt;

- A member voluntarily leaves the cooperative;

- A member is expelled according to the cooperative’s charter;

- A member has neither used products/services nor made labour contribution for a consecutive period prescribed in the cooperative’s charter;

- At the capital contribution time, a member fails to make capital contribution as promised or makes a capital contribution which is lower than the minimum capital contribution prescribed in the cooperative’s charter.

(2) Cases where the membership of contributing members shall be terminated include:

- A member that is an individual dies; is declared by a Court dead, missing or incapacitated, or to be a person with limited capacity for civil acts or difficulty in awareness or control of his/her own acts;

- A member that is an organization ceases to exist, is dissolved or declared bankrupt;

- The cooperative ceases to exist, is dissolved or declared bankrupt;

- A member voluntarily leaves the cooperative;

- A member is expelled according to the cooperative’s charter;

- At the capital contribution time, a member fails to make capital contribution as promised or makes a capital contribution which is lower than the minimum capital contribution prescribed in the cooperative’s charter.

(3) The membership of a non-contributing member shall be terminated:

- A member that is an individual dies; is declared by a Court dead, missing or incapacitated, or to be a person with limited capacity for civil acts or difficulty in awareness or control of his/her own acts;

- A member that is an organization ceases to exist, is dissolved or declared bankrupt;

- The cooperative ceases to exist, is dissolved or declared bankrupt;

- A member voluntarily leaves the cooperative;

- A member is expelled according to the cooperative’s charter;

- A member has neither used products/services nor made labour contribution for a consecutive period prescribed in the cooperative’s charter;

- if the member fails to pay membership fees as prescribed in the cooperative’s charter.

(4) The authority to decide termination of membership, and settlement of rights and obligations of members that have their membership terminated shall comply with the provisions of the Law on Cooperatives 2023 and the cooperative’s charter.

2. Conditions to become a member of cooperatives from July 1, 2024 in Vietnam

Pursuant to Article 30 of the Law on Cooperatives 2023 the conditions to become a members of cooperatives are as follows:

- An official member or contributing member of a cooperative must be:

+ a Vietnamese citizen who is aged 18 or older and has full capacity for civil acts;

+ an individual that is a foreign investor possessing a valid investment registration certificate as prescribed by the Law on investment;

+ a family household, artel or another organization that does not have the status of juridical person, and is duly established and operating in Vietnam. These organizations must appoint their representatives as prescribed by the Civil Code 2015 to perform rights and obligations of a member of the cooperative; or

+ a Vietnamese juridical person.

- A non-contributing member of a cooperative must be:

+ an individual that is a Vietnamese citizen, or a foreigner lawfully residing in Vietnam, who is aged 18 or older and has full capacity for civil acts;

+ a Vietnamese citizen who is aged 15 to under 18, and is not incapacitated or a person with limited capacity for civil acts or a person with difficulty in awareness or control of his/her own acts. When entering into civil transactions or performing certain works, this member must also meet relevant conditions laid down in relevant laws;

+ a family household, artel or another organization that does not have the status of juridical person, and is duly established and operating in Vietnam. These organizations must appoint their representatives as prescribed by the Civil Code 2015 to perform rights and obligations of a member of the cooperative; or

+ a Vietnamese juridical person.

- Organizations and individuals must submit applications for voluntary admission, make capital contribution or pay membership fees, and meet relevant conditions laid down in the Law on Cooperatives 2023 and the cooperative’s charter.

- An organization or individual may become a member of more than one cooperative, unless otherwise prescribed by a cooperative’s charter.

- In order to become an official member or contributing member of a cooperative, an individual that is a foreign investor or a foreign-invested organization shall be required to meet:

+ Market access conditions for foreign investors laid down in the Law on investment and relevant laws;

+ Conditions for ensuring national defense and security laid down in the Law on investment.

- A cooperative that admits foreign-invested organizations and/or individuals that are foreign investors as its official members or contributing members shall be required to meet market access conditions for foreign investors laid down in the Law on investment and relevant laws.

- Total number of official members that are foreign-invested organizations and individuals being foreign investors must be less than 35% of total official members of a cooperative.

The Law on Cooperatives 2023 will take effect on July 1, 2024. Particularly, Clause 3 and Clause 4, Article 115 of the Law on Cooperatives 2023 will take effect on September 1, 2023.

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