Rights and obligations of private business owners in Vietnam

A sole proprietorship is one of four types of enterprises regulated under the enterprise law. A sole proprietorship has distinct characteristics compared to other types of businesses. Therefore, private business owners also have certain rights and obligations prescribed by law. LSX Lawfirm will give you an article about: “Rights and obligations of private business owners in Vietnam”, as follows:

Legal grounds

Law on enterprises 2020

What is a private business? What is a private business?

Enterprise means an organization with its own name, assets, transaction office; established or registered for establishment under the provisions of law for the purpose of doing business. According to the provisions of the Enterprise Law 2020, there are 4 types of enterprises including: Private enterprise; Partnership company, Limited liability company, Joint stock company.

In which, a private enterprise is an enterprise owned by an individual; and is solely responsible with all his assets for all activities of the enterprise. A sole proprietorship can be understood as a sole proprietorship. Through this, it can be seen that a private enterprise has the following characteristics:

– The owner of a sole proprietorship can only be an individual.

– Property liability of a private business owner is unlimited liability, that is; the owner of a private business is responsible with all his assets for all activities of the business.

Rights and obligations of private business owners in Vietnam

The following rights and obligations of a private business owner are stated in parallel with a number of business activities, including:

Establishment of a private enterprise

Each individual only entitled to set up a private enterprise. The owner of a private enterprise cannot concurrently be the owner of a business household; or a general partner of a partnership.

Registration and management of private enterprise capital

• The investment capital of the owner of a private enterprise registered by the business owner himself. The owner of a private enterprise obliged to accurately register the total investment capital; clearly stating the capital amount in Vietnam Dong, freely convertible foreign currencies, gold and other assets; for capital in other assets, it also required to clearly state the type of property; quantity and residual value of each type of asset.
• All capital and assets, including borrowed capital; and leased assets used in business activities of the enterprise fully recorded in the accounting books; and financial statements of the enterprise in accordance with the law.
• In the course of operation, the owner of a private enterprise has the right to increase or decrease his investment capital in the business activities of the enterprise. The increase or decrease in the investment capital of the private business owner fully recorded in the accounting books. In case the investment capital reduced to less than the registered investment capital; the owner of the private enterprise may reduce the capital only after having registered with the Business Registration Authority.

Private business management

• The owner of a private enterprise has the full right to decide on all business activities of the private enterprise; the use of profits after paying taxes and performing other financial obligations as prescribed by law.

• The owner of a private enterprise may directly; or hire another person to act as the Director or General Director to manage and operate the business; In this case, the sole proprietorship owner is still responsible for all business activities of the private enterprise.

• Owner of a private enterprise is the legal representative; representing the private enterprise in the capacity of a requester for settlement of civil matters, plaintiff; defendant; person with related interests and obligations before the Court. financial institutions, courts; and representatives of private enterprises to exercise other rights and perform other obligations as prescribed by law.

Renting a private business

The owner of a private enterprise has the right to lease out his or her entire private enterprise; but must notify in writing, enclosed with a notarized copy of the lease contract; to the business registration authority or tax authority within 03 months. working days; from the effective date of the rental contract. During the lease term; the owner of the private business is still responsible before the law as the owner of the private business. The rights; obligations and responsibilities of owners and tenants for the business activities of a private enterprise are specified in the lease contract.

Selling a private business

• Owners of private businesses have the right to sell their private businesses to other individuals or organizations.
• After the sale of the private enterprise; the owner of the private enterprise shall still be liable for the debts; and other property obligations of the private enterprise arising in the period prior to the date of the transfer of the enterprise; unless the owner The private enterprise; the buyer and the creditor of the private enterprise have other agreements.
• Owners of private businesses and buyers of private businesses must comply with the provisions of the law on labor.
• Buyers of a private enterprise must register to change the owner of a private business according to regulations

Exercising the rights of private business owners in some special cases

• In case the owner of a private enterprise temporarily detained; is serving a prison sentence, is serving administrative handling measures at a compulsory detoxification establishment; or compulsory education institution, he/she shall authorize another person to do so. its rights and obligations.
• So, in case the owner of a private enterprise dies, the heir; or one of the heirs according to the will; or at law shall be the owner of the private business according to the agreement between the heirs. In case the heirs cannot reach an agreement, they shall register to convert into a company; or dissolve such private enterprise.
• Then in case the owner of a private enterprise dies without an heir; the heir refuses to receive the inheritance or deprived of the right to inherit; the property of the owner of the private enterprise handled in accordance with the law on people. the.

• Then In case the owner of a private business has limited or lost civil act capacity; has difficulties in awareness and behavior control; the rights and obligations of the private business owner are performed through his/her representative.
• In case the owner of a private enterprise is banned by the Court from practicing certain professions or doing certain jobs within the scope of the business lines of the enterprise; the owner of the private enterprise shall temporarily suspend or terminate the relevant business lines. pursuant to a court decision; or transferring a private enterprise to another individual or organization.

You can also refer to the article related to Procedures to establish a real estate brokerage company in Vietnam or Prohibited acts in real estate business in Vietnam; Size of private enterprise in Vietnam

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