Many people when planning to set up a small business household want to register many business lines for their business household. However, they do not know can they register more than a line for their business or not. Besides, how many lines can they register if allowed? In this article, LSX legal firm will answer the question: “How many business lines can business household register in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Lines of business
Business lines are often understood as specific areas in which a business conducts its business. Businesses must perform business registration properly and in accordance with the field of operation of their business, not contrary to the provisions of law. This helps to improve the working efficiency of the business, and at the same time, presents the basis for the businesses to exercise their rights and obligations in the course of business operations.
When registering, businesses must choose a business line in accordance with the development orientation and according to the law. They only allowed doing business within the registered industries. Business owners can freely choose the business lines they want (or plan to do in the future) to do business as long as the lines do not belong to the prohibited list. Decision No. 27/2018/QD-TTg stipulates the system of Vietnam’s economic sectors, and the selection of business lines of businesses must conform with this decision.
Conditions to establish a business household
When an individual or organization wishes to establish an individual business household, it must satisfy the conditions for establishing an individual business household as prescribed in Article 79 of Decree No. 01/2021/ND-CP.
- A household business established by an individual or family household members shall take responsibility for business operations of the household business with all of their property. If a household business established by members of a family household, they shall authorize a member 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 shall be the owner of the household business.
- Households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic or seasonal businesspeople, and service providers earning low revenues not required to apply for the establishment of household businesses, except for conditional business lines. The provincial People’s Committees shall specify the low revenues applied within their provinces.
How many business lines can business household register in Vietnam?
Clause 2, Article 89 of Decree 01/2021/ND-CP stipulates that a household business is entitled to engage in conditional business lines from the day on which all business conditions are fulfilled and must maintain the fulfillment of such conditions throughout its operation. Specialized agencies are in charge of the management and inspection of conditional business lines and fulfillment of conditions.
Thus, the current law does not limit the number of business lines that a business household can register. Business households can register many industries and occupations. However, they must have the approval of the business registration authority for those business lines. This means that a household must satisfy the following conditions:
- Registered business lines not prohibited by law;
- Having the conditions to do business in that line (meaning that the business needs to apply for a sub-license, the business household must carry out procedures for the issuance of a license).
Prohibited business lines
- Firstly, business in narcotic substances specified in Appendix I of the Law on Investment 2020.
- Secondly, business in chemicals and minerals specified in Appendix I of the Law on Investment 2020.
- Thirdly, business in specimens of wild flora and fauna specified in Appendix I of Convention on International Trade in Endangered Species of Wild Fauna and Flora, specimens of rare and/or endangered species of wild fauna and flora in Group I of Appendix III of the Law on Investment 2020.
- Fourthly, prostitution business.
- Fifthly, human trafficking; trade in human tissues, corpses, human organs and human fetuses.
- Sixthly, business activities pertaining to asexual human reproduction.
- Also, trade in firecrackers.
- Lastly, provision of debt collection services.
Can an individual business owner establish a company?
Any individual or family household member as a Vietnamese citizen and has the full legal capacity as prescribed in the Civil Code shall have the right to establish household businesses, except for the following cases:
- Minors; people with limited legal capacity; incapacitated people; people having difficulties in controlling their behaviors;
- People facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, or prohibited by the court from holding certain positions or doing certain works;
- Other cases prescribed by relevant laws.
Each individual or family household member mentioned above may register only one household business nationwide, contribute capital to and buy shares/stakes of other enterprises as an individual.
Individuals and family household members that apply for household business registration must not concurrently hold the position of sole proprietor, or general partner of a partnership unless otherwise agreed by the other general partners.
Thus, the owner of an individual business household can only register for the establishment of a sole proprietorship or a business household or become a general partner of a partnership.
Legal service of LSX Legal Firm
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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.
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.
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.
Contact LSX
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