When leasing out a sole proprietorship in Vietnam, what are the responsibilities of the owner?

 When leasing out a sole proprietorship in Vietnam, what are the responsibilities of the owner? (Internet image)

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

1. When leasing out a sole proprietorship in Vietnam, what are the responsibilities of the owner?

According to the provisions of Article 191 of the Law on Enterprises 2020, regulations on leasing out a sole proprietorship are as follows:

The sole proprietorship’s owner is entitled to lease out the entire sole proprietorship, provided a written notification and certified true copies of the lease contract are submitted to the business registration authority and tax authority within 03 working days from the effective date of the contract.

During the lease term, the sole proprietorship’s owner is still legally responsible as its owner. The rights and obligations of the owner and the lessee to the sole proprietorship’s business operation shall be specified in the lease contract.

When leasing out  a sole proprietorship in Vietnam, the owner has the following responsibilities:

- Providing a written notification and certified true copies of the lease contract are submitted to the business registration authority and tax authority within 03 working days from the effective date of the contract.

- During the lease term, the sole proprietorship’s owner is still legally responsible as its owner.

- Be responsible for business activities specified in the lease contract between the private business owner and the lessee.

2. Is it mandatory to carry out the registration of a change of sole proprietorship in Vietnam?

Pursuant to Article 54 of Decree 01/2021/ND-CP, regulations on registration of change of sole proprietor in case sole proprietorship is sold or donated, or sole proprietor dies in Vietnam are as follows:

In case the sole proprietor sells or donates the sole proprietorship or dies, the buyer, receiver, or inheritor shall send an application for change of the sole proprietor to the Business Registration Office of province where the sole proprietorship is headquartered. The application includes the following documents:

- A notification of changes to enterprise registration information bearing the signatures of the seller/donor and the buyer/receiver, or signature of the inheritor in case the sole proprietor dies;

- Copies of legal documents of the buyer, receiver or inheritor;

- A sale contract or documents proving completion of the sale of the sole proprietorship; donation contract; copy of the certificate of the inheritor’s lawful right to inheritance.

After receiving the application, the Business Registration Office shall give a confirmation slip to the enterprise, examine the validity of documents, and issue the enterprise registration certificate to the enterprise.

Thus, according to the above regulations, registration of a change of sole proprietor shall be carried out in case the sole proprietorship is sold or donated, or the sole proprietor dies in Vietnam. Therefore, in the case of leasing out a sole proprietorship, there is no need to carry out the procedure to change the owner of the private business.

Nguyen Ngoc Que Anh

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