Enterprise is a phrase used a lot in the business environment. We all understand when it comes to business means a familiar type of business subject. However, what are the requirements of an subject to be considered an enterprise under Viet Nam’s law? Is a grocery store considered an enterprise? Are enterprise and company the same? What are rights and obligations of enterprises? Let’s find out with Lawyer X through the following article!
Legal grounds
Law on Enterprise 2020
What is an enterprise?
The definition of an enterprise is specified in Clause 10, Article 4 of Law on Enterprise 2020, whereby: “Enterprise means an organization that has a proper name, assets, premises, is established or registered in accordance with law for business purposes.”
As can be seen, the enterprise has the following characteristics:
– Enterprise is an organization. Only an entity that is an organization can be considered an enterprise. Individuals who eventhough carry out business activities cannot be considered an enterprise.
– Has its own proper name, property, and premises. This feature shows the independence of an enterprise. The proper name helps enterprises to easily participate in transactions as well as distinguish them from other entities. Enterprise property is the physical basis for the enterprise to carry out production and business activities. Premises is a necessary element, is a place to perform some activities of the business.
– The enterprise is established or registered for establishment in accordance with the law. This shows that when an enterprise wants to operate in Vietnam, first of all, it must have the permission, recognition and management of the State without being set up or operating arbitrarily.
– The purpose of enterprise operation is for business purposes. Enterprise is a type of organization besides many other organizations that are regulated by law such as political organizations, social organizations, socio-political organizations, etc. This is an important characteristic to distinguish enterprise with other entities. Enterprises mainly operate towards the purpose of making a profit, enriching themselves, the owner when investing in.
According to the Enterprise Law 2020, inheriting the previous legal regulations, currently enterprises include the following four types: private enterprises, partnerships, limited liability companies, joint-stock companies. Thus we can answer the question if enterprise and company are the same? Enterprise has broader connotations than company. Company refers to types of enterprises that are: Partnerships, Limited Liability Companies, Joint-Stock Companies. All types of companies are considered as enterprises. But not every type of enterprises is considered as a corporation, in particular private enterprise is not considered a company.
Enterprises are often known for the purpose of maximizing profits, but there are businesses whose purpose in doing business is to realize social goals. Currently, the law also stipulates criteria for an enterprise to be considered a social enterprise under Clause 1, Article 10 of the Enterprise Law 2020:
– Is a registered enterprise in accordance with the Law on Enterprises
– Operational objectives are aimed at solving social and environmental problems for public interests;
– Use at least 51% of the annual post-tax profit for re-investment to achieve the registered targets.
Rights and obligations of enterprises
Rights of enterprises
Every enterprise has the right to:
– Freely engage in any business line that is not banned by law.
– Freely run the business and choose a type of business organization; choose business lines, area of operation and type of operation; change the scale of business and business lines.
– Choose the method of mobilizing, distributing and using capital.
– Freely find markets, customers and enter into contracts.
– Export and import.
– Hire employees in accordance with employment laws.
– Apply technological advances to improve business efficiency; have intellectual property rights protected in accordance with intellectual property laws.
– Acquire, use, dispose of their assets.
– Reject unlawful requests for provision of resources from other organizations and individuals.
– File complaints and participate in proceedings as prescribed by law.
– Other rights prescribed by law.
Obligations of enterprises
– Maintain the fulfillment of conditions for conducting restricted business lines and business lines restricted to foreign investors ( “restricted business lines”) prescribed by law throughout the course of business operation.
– Apply for enterprise registration; register changes to enterprise registration information; publish information about the establishment and operation of the enterprise; submit reports and fulfill other obligations prescribed by Law on Enterprises 2020.
– Take responsibility for the accuracy of information in the enterprise registration application and reports; promptly rectify incorrect information if found.
– Organize accounting works; pay taxes and fulfill other financial obligations prescribed by law.
– Protect lawful rights and interests of employees as prescribed by law; do not discriminate against or insult employees; do not mistreat or force employees to work; do not employ minors against the law; enable employees to improve their vocational skills through training; buy social insurance, unemployment insurance, health insurance and other insurance for employees as prescribed by law.
– Other obligations prescribed by law.
Rights and obligations of enterprises providing public products and services
An enterprise providing public products and services shall:
– Have the rights and obligations specified in Article 7, Article 8 and relevant regulations of Law on Enterprises 2020
– Be reimbursed in accordance with bidding laws or collect payments as prescribed by competent authorities.
– Have appropriate time to provide products/services to recoup investment and make reasonable profit.
– Provide products/services with adequate quantity, good quality and on schedule at the prices imposed by competent authorities.
– Ensure fairness and convenience for customers.
– Take legal responsibility for the quantity, quality, supply conditions and prices for their products/services.
In addition to the rights and obligations of an enterprise prescribed in Law on Enterprises 2020, a social enterprise also has the following rights and obligations:
+ The owner or executive of a social enterprise shall be enabled to obtain relevant licenses and certificates prescribed by law;
+ A social enterprise may raise and receive donations from individuals, enterprises, non-governmental organizations and other Vietnamese and foreign organizations to cover its administrative expenses and operating costs;
+ Adhere to the objectives and fulfill the conditions specified in Point b and Point c Clause 1 of Article throughout its course of operation;
+ Do not use donations for purposes other than covering administrative expenses and operating costs and resolving the social and environmental issues registered by the enterprise;
+ When receiving donations and aids, submit annual reports on the enterprise’s operation to a competent authority;
– Inform the competent authority when an social or environmental objective is terminated or profit is not used for re-investment in accordance with Point b and Point c Clause 1 of Article 10 Law on Enterprises 2020
– The State shall adopt policies to encourage and assist in development of social enterprises.
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Frequently asked questions
No! Enterprises are entitled to recruit, hire and employ employees in accordance with the law on labor.
No! Enterprises has the obligation to maintain the fulfillment of conditions for conducting restricted business lines and business lines restricted to foreign investors throughout the course of business operation.
Yes! An enterprise providing public products and services also has the rights and obligations of an enterprise specified in Article 7, Article 8 and relevant regulations of Law on Enterprises 2020
Conclusion: So the above is How is enterprise understood under Viet Nam’s law?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
