Can public employees set up company under Vietnamese Law on Enterprise?
The law gives citizens the right to set up businesses. However, depending on the nature of the work of officials, the law stipulates a number of subjects with limited access to this right. So, can public officers (public employees) set up company under Vietnamese Law on Enterprise?
Legal grounds
- Law on cadres and civil servants 2008
- Law on Public Employees 2010
- Also, Law on Enterprise 2020
Why establishing a company?
Establishing a company means expanding your business model. Also, setting up a business will bring you the following benefits:
- Decent: The business that is registered is a manifestation of the legitimacy of the operation. This is the basis for building trust with partners.
- Confident: When entering into a contract as a legal entity, owners can proactively present their licenses/certificates when required.
- Process: The company will have a strict structure and management. This ensures the best interests when operating, expanding, and mobilizing.
Public Officials (Public Employees)
Public employees are Vietnamese citizens recruited according to working positions, working in public non-business units under working contracts and salaried from salary funds of public non-business units in accordance with the law.
Based on the above definition, some characteristics of public employees can be drawn:
- Vietnamese citizen.
- Source: Recruitment.
- Workplace: public non-business units under the working contract regime
- Salary: salary fund of public non-business units as prescribed by law
Can public employees set up company?
Article 17 of the Enterprise Law 2020 stipulated specific provisions on subjects who can establish businesses. In fact, some subjects prohibited or restricted from establishing businesses due to their professional nature. Usually these persons work in government agencies. Setting up a business and doing it themselves may causes abuse of power and corruption. Therefore, Clause 2, Article 17 of the Law on Enterprises 2020 stipulates a number of subjects prohibited from establishing and managing enterprises including Officials and Public Employees.
According to Clause 3, Article 14 of the Law on Public Employees 2010 stipulating the rights of public employees on business operations and working outside the prescribed administration time:
“To contribute capital to but be disallowed to participate in managing and administering limited liability companies, joint-stock companies, partnerships, cooperatives, and private hospitals, schools or scientific research institutions, unless otherwise provided for by law.”
Thus, public employees can only contribute capital but not participate in the management of an enterprise.
Therefore, depending on the type of business, the contribution of capital by employees will be different. Specifically :
- For joint stock companies, public employees may only participate as capital contributors.
- In the case of a partnership, an officer can only participate as a general partner.
This regulation has limited the public employees to participate in business lines, but only to contribute profit-making capital, and not to contribute capital to become a manager.
In Practice
In fact, many officials still set up their own businesses. The reason for this situation is that there is no portal to look up information for business owners who are civil servants or not. Therefore, many companies “of” officials established in the market.
As long as the law not strictly regulated about this, the cases where public employees establishing the company will still taking place.
LSX legal firm’s service on company establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
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.
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Related questions
A business registration certificate issued by a competent state agency will normally record the following contents:
The business code is the first important content on the Business Registration Certificate. Each enterprise has a different code on the enterprise’s electronic portal system. This code helps distinguish businesses from each other, as well as makes it easier for authorities to manage.
The business name will include the full name in Vietnamese, in English, and initials if any.
Also, it is necessary to specify information about the address of the head office of the enterprise, phone number, and email.
Information about the charter capital that the enterprise has registered with the competent authority; the currency value is VND.
Information about the representative of the business, or the business owner (depending on the type of business).
Papers and documents in the enterprise registration dossier are made in Vietnamese.
In case the enterprise registration dossier contains documents in a foreign language, the dossier must have a notarized Vietnamese translation enclosed with the foreign language documents.
In case the papers and documents in the enterprise registration dossier are made in Vietnamese and foreign languages, the Vietnamese version shall be used to carry out the business registration procedures.
Contact LSX
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