Today, establishing businesses became a common trend among organizations and individuals in the economy. This arose as a result of the importance of businesses to the growth of the economy as well as the living standards of people all over the world, as businesses produce goods and services to meet the primary needs of the entire society. The business household, a convenient type of business, attracts many entities including public servants such as police officers. However, can a police officer participate in this business? In this article, LSX legal firm answers: “Can police register a business household in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Individual Business Household
Under the Vietnamese legislation, business household owned by an individual, a group of individuals as Vietnamese citizens from 18 years of age or older, have the full civil capacity, or owned by a household may only register one business location, employs fewer than 10 employees, and take responsibility for the business operation with all of their property.
If a household business is established by members of a family household, one of them shall be authorized to act as the representative of the household business. The individual applying for registration of household business or the person authorized by the family household members to act as the representative of the household business presents as the owner of the household business.
Households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic businesspeople, and service providers earning low revenues not required to registered, except for conditional business lines. The People’s Committees of provinces shall specify the low revenues applied within their provinces.
Any business household that hires 10 employees or more must apply for enterprise registration as prescribed.
Is business household considered a type of enterprise?
According to the provisions of Decree 01/2021/ND-CP, business households have their own names, business locations, and lines of business, but business households do not belong to types of enterprise because:
- Not an independent entity because it does not have a round seal, does not need legal capital, follows the flat tax regime, does not issue VAT invoices, does not make financial statements to the tax department, and does not sign economic contracts. Meanwhile, the law regulates enterprises strictly and clearly in terms of capital, tax regime, and enterprise seal and can sign economic contracts.
- The members who are individuals participating in the household business are the legal subjects. So, the household does not have legal status. Business household means a common name for groups of individuals doing business with unlimited liability (“responsible for all their assets for business activities”).
- You can understand a business household as an individual doing business and the taxable income and personal income of the person in the name of that business household. Households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic businesspeople, and service providers earning low revenues not required to registered, except for conditional business lines.
Can police register a business household?
Clause 2, Article 17 of the Enterprise Law 2020 regulates organizations; The following individuals do not have the right to establish and manage enterprises in Vietnam:
Article 17. The rights to establish, contribute capital, buy shares/stakes and manage enterprises
- The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
a) State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their own interests;
b) Officials and public employees defined by the Law on Officials and the Law on Public Employees;
c) 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;
d) Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1 Article 88 of this Law, except those who are designated as authorized representatives to manage state-owned stakes in other enterprises;
dd) Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons;
e) 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 are incapacitated, are not able to control his/her own 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;
g) Juridical persons that are banned from the business operation or banned from certain fields as prescribed by the Criminal Code.
Can police register a business household?
Thus, according to the above provisions, the police do not have the right to establish and manage enterprises in Vietnam. However, as mentioned above, a business household not considered an enterprise. So, the law does not prohibit police officers from establishing business households. As a result, police have the right to establish business households.
Business household registration principles
- Firstly, the household business or its founder shall complete the application for household business registration and take legal responsibility for the legitimacy, truthfulness, and accuracy of the information therein.
- Secondly, the district-level business registration authority takes responsibility for the legitimacy of the application for household business registration, not violations of law committed by the household business or its founder.
- Thirdly, the district-level business registration authority does not take responsibility for settling disputes between individuals of a household business or between them and other entities.
- Fourthly, the owner of the household business may authorize another entity to follow procedures for household business registration as prescribed in Article 12 of Decree 01/2021/ND-CP.
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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Related questions
The business location of a household business is the place where specific business operations are carried out.
A household business may carry out business operations at multiple locations but must select a location as its headquarters and notify it to tax authorities and market surveillance authorities at places of other business locations.
When a business household shuts down its operation, it must send a notification and return the original certificate of business household registration to the business registration authority of the district where the business household registered, settle all outstanding debts, including tax debts, and financial obligations.
The household business or its founder shall submit 01 application to the district-level business registration authority when following procedures for household business registration.
The district-level business registration authority is not allowed to request the household business or its founder to submit more applications or documents other than those in the application for household business registration as prescribed.
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