Private Enterprise Law

OutLine

• Basics
• Investment capital of enterprise owners
• Management of enterprises
• Lease of enterprises
• Sale of private enterprises

OutLine

• Dealing with breaches
• Restrictions of the law

1.What is a Private Enterprise?

• Owned by ONE Individual.
• Individual responsibility to activities of the enterprise
• Responsibility to the extent of all of his/her assets

Private enterprises

ONE Individual

ONE Private enterprise

2.Investment capital

The investment capital of the owner of a private enterprise shall be registered by himself or
herself, declared accurately the total investment capital in Vietnamese dong, in
freely convertible foreign currency, in gold or in other assets.

All capital and assets, including loans and leased assets, used for the business operations
of an enterprise shall be recorded fully in its books of accounts and financial statements in
accordance with law.

The owner of a private enterprise may increase or reduce the
capital invested in the enterprise. This increase or reduction
must be recorded fully in THE BOOK OF ACCOUNT.

The owner may only reduce the investment capital below
the amount of invested capital registered after registration with the business registration body.

Example: You own and operate a lawn service company. You hear from a customer that a competitor is going out of business. You approach your competitor and offer $50,000 for his equipment -- riding mowers, push mowers, tillers and trimmers. Your company is fairly new and does not have the cash on hand to pay for the purchase. Therefore, you take an equity loan against your house and use those funds to pay for the equipment. What would be recorded on the balance sheet ?

3.Management of enterprises

The OWNER shall have total discretion
in making all business
decisions of the enterprise; in deciding on the use of profits after payment of taxes and
performance of other financial obligations as stipulated by law.

The owner of a private enterprise may
manage and administer the business operations or
employ other persons to do so.

Where another person is employed as
the director of the enterprise, the owner
must register same with the business
registration body and shall REMAIN RESPONSIBLE for all business activities of the
enterprise.

The owner of a private enterprise shall be the plaintiff, defendant, or person having related
rights and obligations in arbitration or court proceedings in disputes relating to the
enterprise.

The owner of a private enterprise shall be the legal representative of the enterprise.

4.Lease of enterprises

The owner of a private enterprise may lease his or her whole enterprise provided that a written
report and a notarized copy of the lease contract must be submitted to the business registration body and the tax office.

During the term of the lease, the owner of the private enterprise shall
remain responsible before the law as the owner of the enterprise. The rights and responsibilities
of the owner and the lessee with respect to the business activities of the enterprise shall be
provided for in the lease contract.

Example:
X. private enterprises established and operating under the Law on Enterprises with the function of producing and selling seafood. Due to the difficulties of the market and business activities are not effective,the business owner want to lease his enterprise to look for opportunities to invest in other areas. Private business owners that want to know:
It is possible to lease now or not? What need to do in this case?

5. Sale of private enterprises

The owner of a private enterprise may sell his or her enterprise to another person. No
later than fifteen (15) days prior to the date of transfer of the enterprise to the purchaser,
the owner of the enterprise must provide written notice to the business registration body.
Such notice shall specify the name and office of the enterprise; the name and address of
the purchaser; the total amount of unpaid debts of the enterprise; the name, address, the
amount of the debt and the time the debt is due and payable with respect to each creditor;
labour contracts and any other contracts which have been signed but not yet fully
performed, and the methods of dealing with such contracts.

After the enterprise is sold, the owner of the private enterprise shall remain liable for all
debts and other property obligations which have not yet been performed by the enterprise,
except where otherwise agreed by the purchaser, the seller and creditors of the enterprise.

The purchaser and seller of an enterprise must comply with the provisions of the law.

Example: A is the owner of a private enterprise. However, after 2 years A lost the Civil Capacity. As there is no person who can manage the enterprise, A’s family want to sell this enterprise.
In this case, who has the right to issue that enterprise?

The purchaser of an enterprise must re-register the business in accordance with the
provisions of this Law.

6.DEALING WITH BREACHES

Any person who establishes a private enterprise without a licence or who carries on business without registration, or where he does have registration, carries on a business which does not conform with the branch or area registered in the licence, or who breaches other provisions of this Law, shall depending on the seriousness of the breach, be liable to administrative penalty or subject to criminal prosecution in accordance with the provisions of the law.

Any person who takes advantage of his position and authority to grant licenses for the establishment of private enterprises to persons who are prohibited from owning them, or to persons who are not permitted to establish them, or, alte rnatively, who fails to grant licenses for the establishment of private enterprises or certificates for business registration to those who are fully qualified for them, or who, for the benefit of the owner of the enterprise, wrongl y certifies the bank deposited capital or value of the assets in kind, or who breaches other stipulations of this Law, shall, depending on the seriousness of the breach, be subject to administrative penalties or to criminal prosecution as provided by law.

7.Restriction of the law

Specific responsibility when leasing private enterprise ?

the conversion of private enterprises...

thanks for listening

outline

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