The current Vietnamese legislation has regulations that are very open for business establishments. Therefore, many individuals and organizations aim to build their own businesses. In the first step, founders have to consider the type of enterprise to register for the business registration procedures. Among the types of business, an enterprise with multiple owners attracts investors the most. In this article, LSX legal firm will inform you about:
Business with multiple owners in Vietnam
Legal ground
- Law on Enterprise 2020
Types of enterprise
At present, the Law on Enterprise 2020 regulates 6 types of company as follow:
- Sole proprietorship.
- Partnership.
- Joint-stock company.
- State-owned company.
- Limited liability company with 2 or more members.
- Single-member limited liability company.
Business with multiple owners
Business with multiple owners is a partnership.
According to the Law on Enterprise 2020, a partnership:
- Has 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;
- A general partner shall be an individual whose liability for the company’s obligations is equal to all of his/her assets and a limited partner can be an organization or an individual whose liability for the company’s debts is equal to the promised capital contribution.
This type of business has the status of a juridical person from the day on which the Certificate of Enterprise Registration is issued.
Besides, a partnership must not issue any kind of securities.
Rights and obligations of general partners (co-owners)
Rights of general partners (co-owners)
- Firstly, participate in meetings, discuss and vote on the partnership’s issues; each general partner shall have one vote or a specific number of votes specified in the partnership’s charter.
- Secondly, do business in the partnership’s business lines on its behalf; negotiate and enter into contracts, transactions, or agreements under conditions that the partner believes to be most beneficial to the partnership.
- Thirdly, use the partnership’s assets to do business in its business lines. In case a general partner advances money to do business on behalf of the partnership, he/she is entitled to request the partnership to reimburse the principal and interest thereon at the market rate.
- Fourthly, request the partnership to pay compensation for the damage that is not on account of that partner.
- Fifthly, request the partnership and other general partners to provide information about the partnership’s business performance; inspect the partnership’s assets, account records, and other documents where necessary.
- Sixthly, receive distributed profits in proportion to his/her stake or as agreed.
- Receive the remaining assets in proportion to his/her stake upon the partnership’s dissolution or bankruptcy unless another ratio is specified in the charter.
- Also, when a general partner dies, his/her hair shall receive a value of assets minus the partner’s debts and other liabilities. The heir may become a general partner if accepted by the Board of Partners.
- Other rights prescribed by the Law on Enterprise 2020 and the company’s charter.
Obligations of general partners (co-owners)
- Manage and do business in an honest and prudent manner to ensure the partnership’s lawful and best interests;
- Manage and do business in accordance with the law, the charter, resolutions, and decisions of the Board of Partners; pay compensation for the damage caused by his/her violations of these;
- Do not use the partnership’s assets for personal gain or to serve the interests of any other organization or individual;
- Return to the partnership the money or assets that he/she received when doing business in his/her own name, in the partnership’s or another person’s name and has not returned to the partnership and pay for any damage caused by this action;
- Jointly pay the partnership’s remaining debts (if any) after all of the partnership’s assets are used to pay them;
- Incur the loss in proportion to his/her stake or as agreed in the charter in case the partnership makes a loss;
- Submit monthly written reports on his/her performance to the partnership; provide information on his/her performance for other partners on request;
- Other obligations prescribed by Law and the charter.
Procedures to establish a partnership
Step 1: Prepare dossiers
- Application form for establishment (for the partnership type);
- Charter of the partnership company;
- Personal identification papers of general partners or capital contributors (as individuals): identity card, passport, etc.
- Legal papers related to business registration, operation registration, establishment decision… (for capital contributors as legal entities);
- List of members;
- Authorization document: In case the owner does not directly carry out the procedure.
Step 2: Submit dossiers
Submit the application at the Business Registration Office of the Department of Planning and Investment at the province level where you plan to locate the head office of your Company.
Currently, there are two forms to submit an application:
- Register directly: apply at the “one-stop” department of the Business Registration Office. However, in Hanoi, this method is no longer applied.
- Online business registration: submit your application on the National Business Registration Portal (Address: https://dangkykinhdoanh.gov.vn). After the online application is valid, you will have to go directly to the “one-stop” department to return the scanned copy (hard copy) when submitting it online. However, this method is relatively complicated, requiring you to have skills and knowledge about registering a business account.
Once you have submitted your application, you will receive a receipt for your application. The usual processing time for applications will be 3 working days.
Step 3: Receive result
According to the schedule on the appointment, you return to the “one-stop” department of the Business Registration Office to receive the results. There are two possible scenarios:
- Dossiers valid: You will receive a Certificate of Business Registration as a result and a notification to the tax authorities.
- Dossiers invalid: The Business Registration Office will have a document instructing you to amend the dossiers in accordance with the provisions of the law. After the amendments and supplements to your application according to this guide, then resubmit your application as in Step 2.
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;
- Represent to submit documents, receive results, and hand them over to customers.
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.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Business with multiple owners in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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Related questions
A general partner has the right to request a meeting of the Board of Partners to discuss and decide its business. The requesting partner shall prepare the meeting documents and agenda.
General partners shall assume different managerial positions in the partnership under agreement.
When some or all general partners perform certain business activities together, it will be decided under the majority rule.
A general partner’s activities beyond the scope of operation of the partnership are not responsibility of the partnership unless they are accepted by the other partners.
1. A general partner must not be the owner of a sole proprietorship, a general partner of another partnership unless it is accepted by the other general partners.
2. A general partner must not, in their own names or others’ names, do business in the same business lines as those of the partnership for personal gain or to serve the interests of another organization or individual.
3. A general partner must not transfer part or all of his/her stake in the company to another organization or individual unless it is accepted by the other general partners.
Conclusion: So the above is Business with multiple owners in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
