What does a cooperative's operating capital include under the law in Vietnam?

 What does a cooperative's operating capital include under the law in Vietnam? (Internet image)

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

1. What does a cooperative's operating capital include under the law in Vietnam?

According to Clause 1, Article 3 of Circular 83/2015/TT-BTC, the operating capital of cooperatives and unions of cooperatives includes:

- Contributed capital of members, affiliated cooperatives, mobilized capital, accumulated capital, funds of cooperatives, and unions of cooperatives;

- Subsidies and supports of the State, domestic and foreign organizations, and individuals;

- Donations, donations, and other lawful sources of income.

2. Regulations on capital mobilization, subsidies, and support for cooperatives in Vietnam

Pursuant to Article 4 of Circular 83/2015/TT-BTC stipulating capital mobilization and subsidies and supports for cooperatives in Vietnam:

- Cooperatives and unions of cooperatives are entitled to raise capital according to the provisions of the law to serve production and business, take responsibility for the effective use of mobilized capital, and fully refund it to creditors as committed in the contract.

- Cooperatives and unions of cooperatives give priority to mobilizing capital from members and affiliated cooperatives for investment, production, and business expansion on the basis of agreements with members and affiliated cooperatives according to the same order and procedures as in the case of raising capital from domestic organizations and individuals.

In case capital mobilization from members or affiliated cooperatives has not yet met the demand, the cooperatives and unions of cooperatives may raise capital from other sources according to the provisions of law and the charter of cooperatives and unions of cooperatives.

- Method of raising capital: Mobilizing capital from members and affiliated cooperatives; borrowing capital from credit institutions, other financial institutions; individuals and organizations outside of cooperatives, unions of cooperatives; and other forms of capital mobilization as prescribed by law.

- Principles of capital raising:

+ The capital mobilization must have a plan approved by the general meeting of members or the Board of Directors, the director (general director), according to the decentralized authority in the charter and financial management regulations of cooperatives and unions of cooperatives.

The person approving the capital mobilization plan must be responsible for inspecting, supervising, and ensuring that the mobilized capital is used for the right purposes, by the right subjects, and effectively.

+ Borrowing capital from domestic economic organizations and individuals, cooperatives, and unions of cooperatives must be done through loan contracts with economic organizations and lending individuals in accordance with the law.

+ The mobilization of capital by foreign organizations and individuals shall comply with the provisions of the law on foreign borrowing and debt repayment.

- Cooperatives and unions of cooperatives receive subsidies and support from the State, domestic and foreign organizations, and individuals as agreed and in accordance with the provisions of the law.

- The management of subsidies and supports by the State is carried out as follows:

+ The State's subsidy and non-refundable support shall be included in the undivided property of cooperatives and unions of cooperatives.

+ The amount of State support to be refunded shall be included in the debt of cooperatives and unions of cooperatives.

Nguyen Ngoc Que Anh

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE