With the vibrant and integrated business market in Vietnam today, the age to start up is diverse. People can start setting up a business as long as they conform to the law. Business household is among the most prominent types of business these days. So, what is the legal age to establish a household business?
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Business household
Business household registered by an individual or household members; take responsibility for all their assets for the business operations of the household.
In case household members register as business households, they shall authorize one member to act as the business household representative.
For individual registering business households, in another word, the person authorized by household members to act as the business household representative is the owner of the business household.
Legal age to establish a business household
According to Clause 1, Article 17 of Law on Enterprise 2020:
Article 17. The rights to establish, contribute capital, buy shares/stakes and manage enterprises
1. Organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law, except for the cases specified in Clause 2 of this Article.
Meanwhile, Clause 2, Article 17 of the Law on Enterprise 2020 stipulates one of the cases where there is no right to manage and establish an enterprise:
- Minors; people with limited civil act capacity; incapable of civil acts; people with difficulties in cognitive-behavioral control; organizations without legal status;
On the other hand, according to Clause 1, Article 21 of the Civil Code 2015, a minor is a person under 18 years old.
Thus, individuals who reach the age of 18 have the right to establish and manage a company.
Besides, Clause 3, Article 17 of Law on Enterprise 2020 stated:
Article 17. The rights to establish, contribute capital, buy shares/stakes and manage enterprises
3. Organizations and individuals have the right to contribute capital, buy shares and stakes of joint stock companies, limited liability companies and partnerships in accordance with this Law, except:
a) State authorities, People’s armed forces contributing state-owned assets to enterprises to serve their own interests;
b) The entities that are not allowed to contribute capital to enterprises prescribed by the Law on Officials, the Law on Public Employees, and Anti-corruption Law.
For the case of capital contribution, shares purchase, purchase of contributed capital, the law on enterprises does not limit the age of participation. Therefore, either adults or minors have the right to contribute capital to the company.
Consequently, people under 18 do not have the right to establish and manage a company. However, they are free to participate in company shares.
Can people under 18 inherit a company?
Company inheritance means to inherit contributed capital, shares, and/or management and administration rights of the company.
According to Clauses 2, 3, 4, Article 21 of the Civil Code, the inheritance of contributed capital or shares of a person under 18 years old will be through a legal representative
“Article 21. Minors
2. Civil transactions of each child under six years of age shall be established and performed by his/her legal representative.
3. Each person who is from six to under eighteen years of age must have the consent of his/her legal representative to enter in and perform civil transactions, except for civil transactions which are performed to meet the needs of daily life suitable for the age group.
4. Each person who is from fifteen to under eighteen years of age is entitled to enter in and perform civil transactions by himself/herself, except for civil transactions related to real estate, movables required registration and other civil transactions as prescribed by law that is subject to the consent of his/her legal representative.”
In case the owner of a single-member LLC died, According to Clause 3, Article 78 of the Law on Enterprise: “In case the owner dies, his/her legal heir or designated heir shall be the owner or member of the company”
If the company owner has only one heir who is under 18 years old, according to the provisions of the Law on Enterprise, this person cannot become the owner of the company.
Based on Article 52, Clause 2; Article 136 of the Civil Code, the guardian will be the legal representative of the heir under 18:
- Brother/Sister
- paternal grandfather, grandmother/maternal grandfather, grandmother
- biological uncle/aunt
These people will be the legal representatives of the heirs under 18, representing them to be the owners until they reach the age of 18.
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Related questions
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It isn’t. Business household does not have a seal, cannot open branches or representative offices, do not have the rights that enterprises have such as import-export activities or apply the Law on Bankruptcy when the business makes a loss.
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