A sole proprietorship is the only type of enterprise in Vietnam that does not have legal status. Let’s find out with Lawyer X about the legal regulations of a Private Enterprise through the following situation: “Hello Lawyer! I would like to ask how are Private Enterprises currently regulated in the Enterprise Law? What are the issues of capital and management of private enterprises? Thanks for the reply Lawyer!”
Legal grounds
Enterprise Law 2020
What is a private enterprise?
– A sole proprietorship is an enterprise owned by an individual and is solely responsible for all his/her assets for all activities of the enterprise.
– Private enterprises are not allowed to issue securities of any kind.
– Each individual is only entitled to establish a private enterprise. The owner of a private enterprise cannot concurrently be the owner of a business household or a general partner of a partnership.
– A private enterprise is not entitled to contribute capital to the establishment or purchase shares or contributed capital in a partnership, limited liability company or joint-stock company.
Investment capital of private business owner
The investment capital of the owner of a private enterprise is registered by the business owner himself. The owner of a private enterprise is obliged to accurately register the total investment capital, clearly stating the capital amount in Vietnam Dong, freely convertible foreign currencies, gold and other assets; for capital in other assets, it is also required to clearly state the type of asset, quantity and residual value of each type of asset.
All capital and assets, including borrowed capital and leased assets used in business activities of the enterprise must be fully recorded in the accounting books and financial statements of the enterprise in accordance with the law. .
In the course of operation, the owner of a private enterprise has the right to increase or decrease his investment capital in the business activities of the enterprise. The increase or decrease in the investment capital of the owner of a private enterprise must be fully recorded in the accounting books. In case the investment capital is reduced to less than the registered investment capital, the owner of the private enterprise may reduce the capital only after having registered with the Business Registration Authority.
Private business management
The owner of a private enterprise has the full right to decide on all business activities of the private enterprise, the use of profits after paying taxes and performing other financial obligations as prescribed by law.
The owner of a private enterprise may directly or hire another person to act as the Director or General Director to manage and operate the business; In this case, the owner of the private enterprise is still responsible for all business activities of the private enterprise.
Owner of a private enterprise is the legal representative, representing the private enterprise in the capacity of a requester for settlement of civil matters, plaintiff, defendant, person with related interests and obligations before the Court financial institutions, courts, and representatives of private enterprises to exercise other rights and perform other obligations as prescribed by law.
Rent and sell private businesses
Renting a private business
The owner of a private enterprise has the right to lease out his or her entire private enterprise, but must notify in writing, enclosed with a notarized copy of the lease contract, to the business registration authority or tax authority within 03 months. working days from the effective date of the rental agreement. During the lease term, the owner of the private business is still responsible before the law as the owner of the private business. The rights, obligations and responsibilities of owners and tenants for business activities of a private enterprise are specified in the lease contract.
Selling a private business
Owners of private businesses have the right to sell their private businesses to other individuals or organizations.
After the sale of the private enterprise, the owner of the private enterprise shall still be liable for the debts and other property obligations of the private enterprise arising in the period prior to the date of the transfer of the enterprise, unless the owner the private enterprise, the buyer and the creditor of the private enterprise have other agreements.
– Owners of private businesses and buyers of private businesses must comply with the provisions of the law on labor.
– The purchaser of a private enterprise must register the change of the owner of a private enterprise in accordance with the provisions of the Law on Enterprises.
Exercising the rights of private business owners in some special cases
In case the owner of a private enterprise is held in temporary detention, is serving a prison sentence, is serving administrative handling measures at a compulsory detoxification establishment or compulsory education institution, he/she shall authorize another person to do so. its rights and obligations.
In case the owner of a private enterprise dies, the heir or one of the heirs according to the will or at law shall be the owner of the private business according to the agreement between the heirs. In case the heirs cannot reach an agreement, they shall register to convert into a company or dissolve such private enterprise.
In case the owner of a private enterprise dies without an heir, the heir refuses to receive the inheritance or is deprived of the right to inherit, the property of the owner of the private enterprise shall be handled in accordance with the law on people. the.
In case the owner of a private enterprise has limited or lost civil act capacity, has difficulties in perception and behavior control, the rights and obligations of the private business owner are performed through his/her representative. .
In case the owner of a private enterprise is banned by the Court from practicing certain professions or doing certain jobs within the scope of the business lines of the enterprise, the owner of the private enterprise shall suspend or terminate the related business lines. pursuant to a court decision or transferring a private enterprise to another individual or organization.
Related article:
- Regulations for professional investors in securities in Vietnam
- Transfer of ownership of contributed assets according to Vietnam Law on Enterprises
Frequently asked questions
The owner of a private enterprise has the right to lease out his or her entire private enterprise, but must notify in writing, enclosed with a notarized copy of the lease contract, to the business registration authority or tax authority within 03 months. working days from the effective date of the rental agreement.
During the lease term, the owner of the private business is still responsible before the law as the owner of the private business. The rights, obligations and responsibilities of owners and tenants for business activities of a private enterprise are specified in the lease contract.
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