Currently, pawn service is a fairly developed service industry in Vietnam, especially in big cities. Therefore, the need to establish a pawnshop business is also more. Today, LSX Lawfirm will give you an article about: “Conditions for establishing a pawnshop business in Vietnam”.
Legal grounds
Civil Code 2015.
Enterprise Law 2020.
Decree 96/2016/ND-CP stipulates security and order conditions for a number of conditional investment and business lines.
Some legal issues about the conditions for setting up a pawnshop business
What is a pawn company?
A pawnbroker as prescribed in the Civil Code 2015; is a form of a pledge of property, the pawnbroker will lend the pawnbroker an amount of money, and retain the property and goods of the pawnbroker as security.
Normally, the pawnbroker will receive an interest corresponding to the amount he lent. holding as collateral.
A pawn company is an enterprise establish in accordance with the law and operates a pawnshop service business.
Currently, most see pawnshop activities operating in the form of pawn shops, organized by an individual or family.
But along with the development of society, the business of pawnshop services in the form of the business establishment; is becoming more and more popular.
Setting up a pawn company can make pawnshops more professional, and also make it easier for the state to manage them.
Conditions for establishing a pawn shop business
Owner’s Conditions
Depending on the type of business that you choose when setting up a pawn company, the conditions on the company owner may be different.
Currently, the law is stipulating 4 types of businesses that you can choose from:
- Firstly, private enterprise.
- Secondly, partnerships.
- Thirdly, one member limited liability company or limited liability company with 2 or more members.
- Finally, Joint Stock Company.
For a private company and a partnership, the owner can only be an individual, for a limited liability company and a joint-stock company, the owner can be an individual or an organization.
Conditions for owners of pawn companies for individuals and organizations are currently prescribed in the Enterprise Law 2020.
Accordingly, organizations and individuals participating in the establishment of enterprises must have full civil act capacity:
- For an organization, it must be an organization with legal personality.
- Individuals shall not declare by the Court; to have lost their civil act capacity or have limited civil act capacity.
In addition
The owner of a pawn company is also not prohibit by the State from establishing or joining an enterprise, including the subjects specified in Clause 2, Article 17 of the Enterprise Law 2020 as follows:
- State agencies and units of the people’s armed forces use state assets to establish profit-making enterprises for their own agencies or units.
- Officials and civil servants.
- Officers, non-commissioned officers, professional soldiers, defense workers and officers in agencies and units of the Vietnam People’s Army; officers, professional non-commissioned officers, public security workers in agencies and units of the Vietnam People’s Public Security, except those who are appoint as authorized representatives to manage the State’s capital contribution in enterprises. or management at state-owned enterprises.
- Professional leaders and managers in state-owned enterprises, except those appointed to act as authorized representatives to manage the State’s capital contribution in other enterprises.
- Persons who have lost their civil act capacity or have limited civil act capacity; people with difficulties in cognition and behavior control; Minors.
- The organization has no legal personality.
- Persons who are being examined for penal liability, detained, are serving prison sentences, are serving administrative handling measures at compulsory detoxification establishments, compulsory education establishments or are banned by Courts hold certain posts, are prohibited from practicing certain professions or doing certain jobs; other cases as prescribed by the Law on Bankruptcy and the Law on Anti-corruption.
- Organizations that are commercial legal entities are prohibited from doing business or operating in certain fields according to the provisions of the Penal Code.
Conditions of occupation when registering
A pawn business is a conditional business, so when establishing a pawn shop; it is necessary to meet security and order conditions for the pawnshop business.
The person responsible for security and order of the pawnshop business establishment must be:
- Persons who have permanent household registration for at least 5 years in the commune, ward or township where the business register.
- During the period of 05 consecutive years before the time of business registration, the competent authorities have not been administratively sanctioned for the following acts: resisting public official, disturbing public order, intentionally causing injury , lending heavy interest, gambling, organizing gambling or gambling, property theft, fraud to appropriate property, illegal possession of property.
A pawnshop business company needs to be granted a Certificate of satisfaction of security and order conditions.
In addition
The pawnshop is also responsible for:
- Check the identity papers of the person bringing the property to pledge; including: Identity card or citizen identification or Passport or other personal paper with a photo issued by a state management agency. value for use, and at the same time, photocopy and save them at the business premises.
- Make a contract of mortgage of property according to the provisions of law.
- For mortgaged properties that require by law to have a certificate of ownership, they can only be pledge when they have full ownership papers and the business establishment must keep the originals of all types. such paper during the mortgage of the property.
- For mortgaged properties owned by a third party, a valid authorization letter from the owner is required.
- Do not accept pledge for property of unknown origin or property obtained by illegal acts.
- The interest rate for lending money when taking a pledge of property must not exceed the interest rate prescribed by the Civil Code.
- Arrange a warehouse to preserve the pledged property and ensure the safety of the property of the person bringing the pledged property.
Violation of the above conditions may result in administrative sanctions or criminal penalties, depending on the seriousness of the incident.
Conditions on company name
The name of the pawn company can be in Vietnamese or a foreign language. If the company’s name is in a foreign language, the name in a foreign language of the company shall printed; or written in smaller font size than the Vietnamese name at the head office, branch, representative office, business location, or on other websites. transaction papers, documents, and publications issued by pawn companies.
The name of the pawn company must not be identical or confusing to another company registered on the business registration portal, applied nationwide.
In order to ensure compliance with the provisions of the law, the name of a pawnbroker company must have at least two components: Type of business and proper name.
Head office conditions
A pawn company with its head office located in Vietnam; needs to have a legal business address, which can be the property of the business, or rent or borrow with full papers.
The address must clearly identify including house number, niche, alley, alley, street/street or hamlet/hamlet/hamlet, commune/ward/township, district/district/city/town, province/city under the central; phone number, fax number and email (if any).
If the pawnbroker’s headquarters located in an apartment building, it must note that the apartment building must have a business function. As for other addresses, just specifying the address clearly; and used in accordance with the law, it is completely possible to choose to set up the headquarters of the private pawnbroker company.
Capital conditions
The pawnshop business doesn’t require by law require legal capital, so the pawnbroking company can freely choose the charter capital to set up the company; because the law does not stipulate the minimum capital level.
The level of registered charter capital should be appropriate and correspond to the reality of the company; so that it can be more convenient to do business because if the registration is too low, even though; it is not prohibited by law, the company may also face difficulties in doing business; go to transactions, work with business partners, banks, tax authorities because they may not trust, do not want to trade and cooperate.
In addition, the law does not stipulate the maximum amount of capital to establish a pawn company, so businesses can freely register for charter capital; based on the company’s economic potential.
Conditions of seal
Accordingly to Article 43 of the Enterprise Law 2020, the pawn company’s seal exists in two forms, including:
- The stamp is made at the stamp engraving facility.
- Seal in the form of a digital signature in accordance with the law on electronic transactions.
The company has the right to decide on the type, quantity, form, and content of its seal; and not require to notify about the seal sample.
However, the management, use, and preservation of the pawn company’s seal must comply with the provisions of the company’s charter; and regulations set forth by the company, branch, representative office, or another unit of the company. company has the stamp of issuance.
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Related questions
The agency competent to receive the application for the establishment of a pawn company is the Business Registration Office of the provincial Department of Planning and Investment.
After being granted the Certificate of Business Registration, the pawn company needs to continue to complete the following procedures:
Announcement of enterprises National portal on business registration.
Engraved company seal.
Signboard at the company headquarters.
Open a bank account, Notify the account number to the business registration agency.
Registration of electronic digital signature – TOKEN and initial tax declaration, notification of application of tax calculation method.
Print and order invoice printing.
Declare and pay a license tax.
Fully contribute capital on time within 90 days from the date of issuance of business registration.
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