Characteristics and property responsibilities of traders according to Vietnamese law
The trader is a familiar concept in the field of Commerce; is a basic subject, mainly in commercial activities in general. So what is a trader? What are the characteristics and property responsibilities of traders regulated by law? Today, LSX Lawfirm will give you an article about “Characteristics and property responsibilities of traders according to Vietnamese law“, as follows:
Legal grounds
Enterprise Law 2020
What is a trader?
Explained in terms of language, “trader” is a person doing business or doing business. Business people and people engaged in commercial activities are organizations and individuals performing commercial acts; ie continuously performing one, several, or all stages of the investment process, from production to product consumption; or providing services in the market for the purpose of making a profit.
From a legal perspective, all countries stipulate signs to identify traders; therefore, only people engaged in commercial activities who meet all the signs prescribed by the law can become “traders”; and is subject to the provisions of the Commercial Law.
Vietnamese law stipulates: “Traders include legally-established economic organizations and individuals conducting commercial activities independently; regularly and have a business registration”.
With this provision, commercial persons must have business registration to be considered traders. Therefore, according to Vietnamese law, there will be business entities that are not traders.
To become a trader, someone must have two conditions:
+ Perform commercial acts;
+ Perform commercial acts of a regular nature.
In addition, in the implementation of the Commercial Code, judges and legal scholars all acknowledge two more conditions: To perform acts in their own name and for their own benefit, to have the ability to commercial activism.
Trader’s characteristics
According to Vietnamese law, traders have the following basic characteristics:
- About the subjects: The subjects who become traders are individuals and organizations. Thus, there will be two types: traders are individuals, and traders are organizations.
- Contents of the field of activity: Includes one or more types of commercial acts, that is, acts of buying and selling; service provision, investment, trade promotion; other activities related to profit-making purposes.
- The way in which the organization’s commercial activities are carried out; the individual is performed independently, regularly.
- Organizations and individuals considered independent commercial activities when capable of acting on their own behalf in legal relations; independently responsible for these transactions.
- Regarding procedures to considered as a trader: Must legally established and have a business registration. In Vietnam, economic organizations and individuals conducting commercial activities considered legal when they have complete the business registration procedures and are grant an enterprise registration certificate or a business household registration certificate.
Trader classification
According to the provisions of Vietnamese law, traders include two types: Traders are individuals and traders are economic organizations.
- Firstly, A trader is an individual: This is a case where an individual conducts commercial activities independently and regularly; business registration. In principle, individuals may register commercial activities in the form of an enterprise; or as a small business individual.
- Secondly, The trader is an economic organization: An organization as a whole, structured, with common functions and purposes. Organizations can be recognized as legal entities or not; dependent on the independent nature of the property, independence on the ability to enter into legal relations; assume responsibility for the law of the property arising from such relationships.
Property liability of traders
The general principle is that traders must be responsible for all their business activities; with all assets owned by the trader. There are two types of property liability in business, limited liability, and unlimited liability.
- Firstly, Limited liability is a type of property liability that is limited by the extent of capital invested in the business.
- Secondly, Unlimited liability is a type of property liability that is not limited by the extent of capital invested in the business.
Unlimited Asset Liability of Traders
- Firstly, For traders being economic organizations with legal personal status; Business capital owned by traders includes charter capital, loan capital, some types of capital, and other assets. The trader must use all of this property to be responsible for paying the debt; Therefore, this can considered an unlimited liability. This liability ends when the trader deleted from the business registration book or is updated with a “dissolved” status on the National Business Registration Portal.
- Secondly, For traders being individuals and traders being economic organizations without legal status; in addition to the registered capital for business investment at the business establishment; businessmen; private business owners must also use other assets; owned by themselves to be responsible for the payment of the debt. Even if the trader has removed from the business register; they are still obliged to continue to pay when new assets arise after the time when the trader terminates the operation. Liability in this case is also unlimited; even absolute infinity.
Limited liability of traders
According to regulations of the Law; organizations and individuals that contribute capital to limited liability companies, joint-stock companies, cooperatives, or contribute capital to partnerships as capital contributors shall only have limited liability. That is, they are only responsible for paying the debts of the enterprise within the amount of capital contributed or committed to contributing to the enterprise.
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Related questions
According to regulations of the Law; Branches, representative offices of enterprises are not capable of independently participating in legal relations, so they are not traders and are only dependent units of traders.
Organizations and individuals conducting commercial activities are considered regular when commercial activities are conducted continuously; of a professional nature; to carry out the functions and purposes of their establishment.
A’s the sale of computers is profitable, but not commercial because A is not a business person; This act of selling computers does not happen regularly and continuously.
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