During the development of Vietnam’s economy, it has shown a very promising future for startups. Nowadays, many people want to open a company of their own, not only to make a profit but also to start the desire to become a businessman. Besides, many public servants and officials intend to set up a company after their retirement. However, the state has strict regulations on public employees regarding business operations. So, they do not know if they can establish a business or not. Therefore, in this article, LSX legal firm will answer the question: “Can retired officials set up a business in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Can retired officials set up a business?
Clause 2, Article 17 of the Law on Enterprise 2020 stipulates that the following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
- State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their interests;
- Officials and public employees defined by the Law on Officials and the Law on Public Employees;
- Commissioned officers, non-commissioned officers, career military personnel, military workers, and public employees in agencies and units of the Vietnam People’s Army; commissioned officers, non-commissioned officers, and police workers in police authorities and units, except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises;
- Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1 Article 88 of this Law, except those who designated as authorized representatives to manage state-owned stakes in other enterprises;
- Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons;
- 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, have limited legal capacity or is incapacitated, are not able to control his/her behaviors, is banned by the court from holding certain positions or doing certain works; other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law. If requested by the business registration authority, the applicant shall submit the judicial records;
- Juridical persons banned from a business operation or banned from certain fields as prescribed by the Criminal Code.
Retired cadres do not belong to the subjects who do not have the right to establish an enterprise in Vietnam. The law does not prohibit retired cadres from establishing businesses, so retired cadres can establish and manage enterprises.
What types of businesses can retired officials set up?
According to the Law on Enterprise 2020, the main types of enterprises in Vietnam include:
- Joint-stock companies.
- single-member limited liability company.
- Limited liability company with two or more members.
- partnerships.
- Sole proprietorship.
Each type of business has its own advantages and disadvantages. Depending on the needs and ability, individual organizations choose the appropriate business model.
Single-member limited liability company
- Firstly, a single-member limited liability company is an enterprise owned by a single organization or individual (hereinafter referred to as “owner”). The owner’s liability for the company’s debts and other liabilities shall equal the company’s charter capital.
- Secondly, a single-member limited liability company has the status of a juridical person from the date of issuance of the Certificate of Enterprise Registration.
- Thirdly, a single-member limited liability company must not issue shares except for equitization.
- Fourthly, single-member limited liability companies may issue bonds in accordance with the Law on Enterprise and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of this Law.
Limited liability company with two or more members
- Firstly, a multiple-member limited liability company means an enterprise that has 02 – 50 members that are organizations or individuals. A member’s liability for the enterprise’s debts and other liabilities shall equal the amount of capital that member contributed to the enterprise, except for the cases specified in Clause 4 Article 47 of the Law on Enterprise 2020. The member’s stake (contributed capital) may only be transferred in accordance with Articles 51, 52, and 53 of this Law.
- Secondly, a multiple-member limited liability company has the status of a juridical person from the date of issuance of the Certificate of Enterprise Registration.
- Thirdly, multiple-member limited liability companies must not issue shares except for equitization.
- Fourthly, multiple-member limited liability companies may issue bonds in accordance with the Law on Enterprise 2020 and relevant laws; private placement of bonds shall comply with Article 128 and Article 129 of this Law.
Sole proprietorships
- Firstly, a sole proprietorship means an enterprise owned by a single individual whose liability for its entire operation equal to his/her total assets.
- Secondly, a sole proprietorship must not issue any kind of securities.
- Thirdly, an individual may only establish one sole proprietorship. The owner of a sole proprietorship must not concurrently own a household business or hold the position of the general partner of a partnership.
- Fourthly, a sole proprietorship must not contribute capital upon the establishment or purchase of shares or stakes of partnerships, limited liability companies, or joint-stock companies.
Joint Stock Company
- Firstly, the charter capital is divided into units of equal value called shares;
- Secondly, shareholders can be organizations and individuals; the minimum number of shareholders is 03; there is no limit on the maximum number of shareholders;
- Thirdly, a shareholder’s liability for the company’s debts and liabilities equal to the amount of capital contributed to the company by the shareholder;
- Fourthly, shareholders may transfer their shares to other persons except for the cases specified in Clause 3 Article 120 and Clause 1 Article 127 of this Law.
- Fifthly, a joint-stock company has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
- Lastly, a joint-stock company may issue shares, bonds, and other kinds of securities.
Partnerships
- Firstly, there are at least 02 partners that are joint owners of the company and do business under the same name ((hereinafter referred to as “general partner”). There can be limited partners in addition to general partners;
- Secondly, a general partner shall be an individual whose liability for the company’s obligations is equal to all of his/her assets;
- Thirdly, a limited partner can be an organization or an individual whose liability for the company’s debts is equal to the promised capital contribution.
- Fourthly, a partnership has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
- Lastly, a partnership must not issue any kind of securities.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
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With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
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- Conversion of enterprises according to Viet Nam Law on Enterprises
- How to calculate pension when participating in compulsory social insurance in Vietnam?
Related questions
Persons wishing to register an enterprise shall submit an application at the Business Registration Office where the enterprise’s head office is located.
Normally, it takes 3-5 days to apply for a business registration certificate.
Firstly, submit application directly at the Business Registration Office.
Secondly, submit business establishment documents via postal service.
Lastly, submit application for business establishment online via electronic information network.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Can retired officials set up a business in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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