Who are the subjects that cannot establish businesses in Vietnam today?
The Law on Enterprise 2020 takes effect from January 1, 2021, replacing the 2014 Law on Enterprise with many changes in legal regulations such as the addition of subjects that do not have the right to establish and manage businesses. So, who are they? Follow this article of LSX legal firm for the answer.
Legal ground
- Law on Enterprise 2020
Subjects that cannot establish business
From 2021, according to Article 17 of the Law on Enterprise 2020, the following subjects can not establish businesses:
Article 17. The rights to establish, contribute capital, buy shares/stakes and manage enterprises
Article 17
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.
2. The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
a) State authorities, People’s armed forces using state-owned assets to establish enterprises to serve their own interests;
b) Officials and public employees defined by the Law on Officials and the Law on Public Employees;
c) Commissioned officers, non-commissioned officers, career military personnel; military workers and public employees in agencies and units of Vietnam People’s Army; commissioned officers; non-commissioned officers and police workers in police authorities and units; except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises;
d) Executive officers and managers of state-owned enterprises prescribed in Point a Clause 1 Article 88 of this Law; except those who are designated as authorized representatives to manage state-owned stakes in other enterprises;
dd) Minors; people with limited legal capacity; incapacitated people; people having difficulties controlling their behaviors; organizations that are not juridical persons;
e) People who are facing criminal prosecution, kept in temporary detention, serving an imprisonment sentence, serving an administrative penalty in a correctional institution or rehabilitation center, has limited legal capacity or is incapacitated, is not able to control his/her own behaviors, is banned by the court from holding certain positions or doing certain works; other cases prescribed by the Law on Bankruptcy and the Anti-corruption Law.
If requested by the business registration authority, the applicant shall submit the judicial records;
g) Juridical persons that are banned from business operation or banned from certain fields as prescribed by the Criminal Code.
Why public employees can not set up businesses?
Civil servants as Vietnamese citizens recruited and appointed to ranks, positions, and titles corresponding to employment positions in agencies of the Communist Party of Vietnam, the State, socio-political organizations at the central level, provincial level, district level; in an agency or unit of the People’s Army that is not an officer, professional military personnel; defense workers; in the agency, units of the People’s Public Security who are not officers, non-commissioned officers serving under the professional regime, public security workers, on payroll and receiving salaries from the state budget.
Besides, Article 2 of the Law on Public Employees 2010 amended and supplemented in 2019 stipulates that; Public employees are Vietnamese citizens recruited according to working positions, working in public non-business units under working contracts and salaried from salary funds of public non-business units in accordance with the law.
Establishing a business
Understanding from an economic perspective: Establishing an enterprise means setting up a business organization when satisfying all necessary and sufficient conditions, such as individuals and organizations must fully prepare in terms of infrastructure: headquarters, human resources, material resources, production lines, factories, capital.
On the other hand, from a legal perspective: Establishing an enterprise or company means a legal procedure that individuals and organizations must perform at a competent state agency.
The means of establishing a business
- For individuals and organizations: Legally recognized by the State, protected by law in the process of production and business operation, also, having the right to do business in industries that the law does not prohibit.
- For the economy: the individual or organization that established a business has contributed to the overall development of the country’s economy.
- Society: Being known to the whole society through brand promotion, and that contributes to the development of businesses
Therefore, the establishment of enterprises and companies is extremely important in the overall development of a nation’s economy.
LSX legal firm’s service on company establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself. We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application; submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
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Related questions
Papers and documents in the enterprise registration dossier are made in Vietnamese.
In case the enterprise registration dossier contains documents in a foreign language, the dossier must have a notarized Vietnamese translation enclosed with the foreign language documents.
In case the papers and documents in the enterprise registration dossier are made in Vietnamese and foreign languages, the Vietnamese version shall be used to carry out the business registration procedures.
Firstly, Certificate of business registration.
Secondly, Company Charter or equivalent document.
Thirdly, Audited financial statements for the most recent financial year.
Fourthly, Bank confirmation of account balance equal to the amount of capital contributed to the company will establish in Vietnam.
Also, The Company’s decision relates to the investment in establishing the Company in Vietnam and appointing a representative to manage the contributed capital in Vietnam.
Lastly, Passport of the legal representative in case of appointed as the Director of the Company or the representative managing the contributed capital.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Who are the subjects that cannot establish businesses in Vietnam today?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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