Procedures for registration of individual business households in Vietnam 2022
Currently, in addition to the enterprise business model, individual business households are also quite popular. Family members work together and contribute efforts to generate profits. So what is different with this model compared to businesses? How to register a business? Where is the procedure to register an individual business household? Is there anything to keep in mind when doing business registration? Today, LSX Lawfirm will give you an article about “Procedures for registration of individual business households in Vietnam 2022”, as follows:
Legal grounds
Decree 01/2021/ND-CP of the Government dated January 4, 2021, on Business Registration.
Regulations on individual business households
Article 79, Decree 01/2021/ND-CP on enterprise registration stipulates:
“1. A business household is registered to be established by an individual or members of a household and is responsible with all his/her assets for the household’s business activities. In case household members register business households, they shall authorize one member to act as the business household representative. For individuals registering business households, the person authorized by household members to act as the business household representative is the owner of the business household.
“2. Households engaged in low-income agriculture, forestry, fishery, salt production, street vendors, snacks, street vendors, mobile businesses, seasonal services, and service providers with low incomes are not required to register. business households in the lines of business with conditional investment and business according to the regulations of the People’s Committees of the provinces and centrally-run cities with low income levels applicable in the area”.
Accordingly, household business can understood as a type of business. It is established by an individual or registered household members; be responsible with all their assets for the business activities of the household. It bears some of the same characteristics as a business and is an independent business.
Right to establish a business household
The right to establish a business household is provided for in Article 80 of Decree 01/2021/ND-CP as follows:
“Individuals and household members who are Vietnamese citizens with full civil act capacity as prescribed by the Civil Code have the right to establish business households as prescribed in this Chapter, except for the following cases:
a) Minors, persons with limited civil act capacity; persons who have lost their civil act capacity; people with difficulties in cognition and behavior control;
b) The person is being examined for penal liability, is detained, is serving a prison sentence, is serving an administrative handling measure at a compulsory detoxification establishment, a compulsory education institution, or is being prosecuted by a court. ban from holding certain posts, practicing certain professions, or doing certain jobs;”
Business households do not have legal status and separate seals. However, if the householder can still engrave a rectangular seal, with the business household’s name and business household address, and tax code (if necessary). Individuals who establish and contribute capital to establish a business household may not concurrently be the owner of a private enterprise or a general partner of a partnership unless otherwise agreed by the remaining general partners.
Where can I apply for a personal business license?
Individuals/household representatives can send an application for individual business registration to the business registration office of the district where their business location is located. Or you can register your business online to the city’s public service sites. The dossier will then be transfer by the public services of these two cities to the Economic Office of the People’s Committee of the relevant district for review.
In case the application is valid, the People’s Committee of that district will send a message/email to the applicant to schedule a date to get the permit. If the application is not satisfactory, needs to be supplemented, or is rejected, this unit will also send a notification via text/email of the applicant.
Procedures for registration of individual business households in 2022
Dossier for registration of individual business households
An individual business household registration dossier includes the following documents:
- Application form for individual business household registration. Contents include the name of business household; business location; phone number; fax number; email; business; the amount of business capital; the number of employees.
- Copy of ID card/citizen identity card of individuals participating in the household business.
- Authorization to represent business households in the case of business households established by households.
- Proof of business location.
Procedures for registration of individual business households
Procedures for setting up an individual business household include the following steps:
Step 1: Individuals or household representatives send business household registration documents to the business registration office of the district; where the business location is located.
Step 2: The business registration agency will hand over the receipt and certificate of household business registration to household business; within 3-5 working days from the date of receipt of the application if all the following conditions met:
- Firstly, Business lines not on the list of industries and trades prohibited from doing business;
- Secondly, The name of the business household that intend to be registered must be consistent with the regulations and must not be confused with the business household in the same area;
- Thirdly, Business household registration address in accordance with the law;
- Finally, If the registration dossier is invalid, the business registration agency will clearly notify in writing the content to amended or supplemented to the submitter within 3 working days from the date of receipt of the application.
Is an individual business household a business?
Clause 10, Article 4 of the Enterprise Law 2020 stipulates that: “An enterprise is an organization with its own name, assets, and transaction office, established or registered for establishment in accordance with the law for the purpose of doing business.”
Also according to the Enterprise Law 2020, the types of enterprises include 1-member limited liability company, limited liability company with 2 or more members, joint-stock company, partnership, private enterprise.
Business households, although establishing and operating in accordance with the law, have business functions, but don’t consider enterprises because business households operate individually and infrequently. Professional, no seal, not allowed to open branches, representative offices and especially not to exercise the rights that enterprises have such as import and export activities or apply the Bankruptcy Law when doing business at a loss.
Related article
- Can foreign enterprises do real estate business in Vietnam?
- Fees to be paid when registering a business in Vietnam
Related questions
According to Article 80, Decree 01/2021/ND-CP is as follows:
“Individuals and household members who are Vietnamese citizens with full civil act capacity as prescribed by the Civil Code have the right to establish business households as prescribed in this Chapter, except for the following cases: this: a) Minors, persons with limited civil act capacity; persons who have lost their civil act capacity; people with difficulties in cognition and behavior control;”
Therefore, people with difficulties in awareness and behavior control are not allowed to establish business households
Individual business households do not have legal status. Because the head of household is responsible with all his assets for the business activities of the household, therefore, the property of the householder with the property of the business household is not independent. This is similar to the type of private enterprise that also has no legal status.
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