The difference between Commercial vs Non-commercial legal entities

by QuynhHuong

Hence the provisions of the 2015 Vietnamese Civil Code; it is extremely necessary to be aware of the differences between different types of legal entities. In fact, this is especially necessary for foreign investors when investing in companies in Vietnam. So, what is the difference between Commercial and Noncommercial legal entities? Let’s find out in this article.

  • 2015 Vietnamese Civil Code
  • 2020 Enterprises Law

Accordingly, legal entities are organizations with independent legal status, able to participate in economic, political, social activities… according to the provisions of law. There are two types of legal entities as in the 2015 Vietnamese Civil Code: Commercial and Non-commercial legal entities

Distinguish between Commercial vs Non-commercial registered agents

Definition

Basically, a commercial legal entity is a legal entity whose main objective is to seek profits and to distribute profits to its members. On the other hand, a non-commercial entity is a legal entity whose primary objective is to seek profit; in case there is a profit, it is not distributed among the members.

Firstly, for commercial legal entity, including businesses and other economic organizations. These are organizations established for the purpose of carrying out production and business activities for profit, profit is the top goal of these organizations.

In contrast, non-commercial legal entity include state agencies, people’s armed forces units, political organizations, socio-political organizations, socio-political-professional organizations, and social organizations, social-professional organizations, social funds, charitable foundations, social enterprises, and other non-commercial organizations. These are agencies having a specific purpose depending on the type of organization but not for profit. These organizations can carry out profit-making activities but that is not the goal of establishing the organization, such profit-making activities are for the purpose of creating funds to maintain the organization’s operation.

Purposes

Thus, the commercial legal entities’ main purpose is profit. When there are profits, it will be divided among the members of the legal entity according to the agreement, the proportion of capital contribution… depending on the type of business.

Non-commercial legal entities depend on each specific organization; however, organizations that are non-commercial agents do not have the main goal of making a profit. In case there is a profit, it will be the maintenance of the activities of the organization without dividing it among the members.

Above are the answers to “The re-issuance of birth certificates for Vietnamese people living aboard”. In case you have any questions, please contact Lawyer X for quick and best legal services: 0833102102.

What are the conditions for legal entities?

– Established in accordance with this Code and other relevant laws;
– Having an organizational structure
– Having assets independent of other individuals or legal entities and taking responsibility for themselves with their own property
– Independently participate in legal relations in their own name.

How many representative offices can an enterprise set up?

According to Clause 1, Article 45 of the Enterprise Law 2020:
Enterprises have the right to set up branches and representative offices in the country and abroad. An enterprise can set up one or more branches and representative offices in a locality according to administrative boundaries.
So there is no limit to the establishment of a representative office. 

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