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DECREE
No. 03/2000/ND-CP OF FEBRUARY 3, 2000 OF THE GOVERNMENT
GUIDING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE
LAW ON ENTERPRISES
------------------------------------------
THE
GOVERNMENT
Pursuant to the Law on Organization of the Government of
September 30, 1992;
Pursuant
to the Law on Enterprises No. 13/1999/QH10 of June 12,1999;
At
the proposal of the Minister of Planning and Investment,
DECREES:
Article 1:
Objects of regulation
This Decree applies to the following forms of enterprises:
1.
Limited liability companies, joint-stock companies,
partnerships and private enterprises established under the
provisions of the Law on Enterprises;
2.
Limited liability companies, joint-stock companies,
and private enterprises which have been established and
operated under the provisions of the Law on Companies and
the Law on Companies and the Law on Private Enterprises
of December 21,1990, and the Law amending and supplementing
a number of articles of the Law on Companies, the Law amending
and supplementing a number of articles of the Law on Private
Enterprises of June 22,1994;
3.
The joint-stock companies set up from the equitization
of State enterprises;
4.
The joint stock companies set up from the equitization
of enterprises of the Party and enterprises of socio-political
organizations;
5.
The limited liability companies set up from the conversation
of Stat enterprises;
6.
The limited liability companies set up from the conversion
of enterprises set up from the conversion of enterprises
of the Party and enterprises of socio-political organizations.
Article 2:
Application of specialized laws
In case of disparity between the stipulations of the Law
on Enterprises and those of the following specialized laws
on the establishment, managerial organization and operation
of the limited liability companies, joint-stock companies,
partnerships and private enterprises, the provisions of
the specialized laws shall apply:
1.
The Law on Credit Organizations of December 12, 1997;
2.
The Law on Mineral Resources of March 20, 1996;
3.
The Petroleum Law of July 6, 1993;
4.
The Law on Water Resources of May 20, 1998;
5.
The Law on Vietnam Civil Aviation of December 26,
1991; the Law amending and supplementing a number of articles
of the Law on Vietnam civil Aviation of April 20, 1995;
6.
The Law on Publication of July 7, 1993;
7.
The Press Law of December 28, 1989; the Law amending
and supplementing a number of articles of the Press Law
of June 12,1999;
8.
The Education Law of December 2,1998;
9.
The Maritime Code of June 30, 1990;
10.
Other specialized laws or the laws amending and supplementing
the specialized laws which have been adopted after this
Decree takes effect.
Article 3: Lines
banned from business:
1.
List of lines banned from business:
a)
Trading in weapons, ammunition, army uniforms and
outfits and special-use military technical means of the
armed forces;
b)
Trading in explosives, toxic and radioactive matters;
c)
Trading in narcotics;
d)
Trading in prostitution, sex procurement, trafficking
in women and children;
e)
Providing gambling and places for gambling;
f)
Trading in chemicals of high toxicity;
g)
Trading in articles of historical, cultural and museum
relics;
h)
Trading in reactionary, depraved, superstitious cultural
products or products detrimental to ethical education;
i)
Trading in fireworks of all types;
j)
Trading in plants and wild animals listed in the
international agreements which Vietnam has signed or acceded
to, and other rare and precious species of animals and plants
which need to be protected;
k)
Trading in toys harmful to ethical education and
the health of children or which affect public security and
social order and safety.
2.
The Ministry of Industry and the Ministry of Science,
Technology and Environment shall submit to the Government
for issuance a detailed list of explosives, toxic substances,
radioactive matters and chemicals of high toxicity stipulated
at Point b and Point f, Clause 1 of this Article.
The Ministry of Public Security shall submit to the Government
for issuance a detailed list of narcotics stipulated at
Point c, Clause 1 of this Article.
The Ministry of Culture and Information shall submit to
the Government for issuance a detailed list of articles
in the group of historical, cultural and museum relics stipulated
at Point g and a detailed list of reactionary, depraved
and superstitious cultural products or products detrimental
to ethical education as stipulated at Point h, Clause 1
of this Article.
The Ministry of Agriculture and Rural Development shall
submit to the Government for issuance a detailed list of
plants and wild animals listed in the international agreements
which Vietnam has assigned or acceded to and other endangered
species of plants and animals that need to be protected
as stipulated at Point j, Clause 1 of this Article.
The Ministry of Education and Training shall submit to the
Government for issuance a detailed list of toys harmful
to ethical education and the health of children or which
affect public security and social order and safety as stipulated
at Point 1, Clause 1 of this Article.
The
ministries shall submit to the Government the detailed lists
mentioned in this Clause within sixty days after this Decree
takes effect.
Article 4: Lines
of business subject to conditions
1.
The lines of business subject to conditions and their
conditions of business shall conform with the stipulations
of relevant laws, ordinances or decrees. The business conditions
are stipulated in the two following forms:
a)
Business licenses issued by competent State agencies;
b)
Regulations on environmental hygiene criteria, food
security hygiene; regulations on prevention and fight against
fires, on social order, traffic security and on other requirements
for business operations (hereafter commonly called business
conditions without need of license).
The legal document issued by the ministries, branches or
different levels of the local administration which are not
based on laws, ordinances or decrees concerning the lines
of business subject to conditions and the business conditions
of these lines shall not have implementation effect.
2.
If an enterprise is set up to conduct business in
lines of business subject to conditions, when it registers
for business, the business registration agency must inform
and guide the founder of the enterprise of the business
conditions of these lines.
If the enterprise register for supplement or alteration
to the line of business subject to conditions, when it registers
for supplement or alteration to the business line, the business
registration agency must inform and guide the enterprise
of the business conditions of that line.
3.
For the lines of business requiring business licenses,
the enterprise is entitled to conduct business in such line
after it is granted the business license.
For the lines of business subject to conditions without
need of license, the enterprise may conduct business in
such line after it gathers all the conditions for business
as stipulated and commits itself to fulfill these conditions
throughout the process of business operation.
The founder of the enterprise and the legal representative
of the enterprise are responsible for the correct fulfillment
of the business conditions as prescribed. If the enterprise
conduct business without all the prescribed conditions,
the founder and the legal representative of the enterprise
must jointly take responsibility before law for this business.
Article 5: Lines
of business requiring legal capital
1.
A line of business must have a legal capital. The
concrete level of this capital, the competent State management
agency on legal capital, the competent State management
agency on legal capital, the agency competent to certify
and the modalities for certifying the legal capital shall
be determined according to the law, ordinance and decree
on legal capital.
2.
The legal representative of the enterprise is answerable
for the truthfulness and accuracy of the capital certified
at the time of founding and during the process of business
operation of the enterprise.
3.
The head of the agency with the competence to exercise
State management over legal capital and the head of the
agency certifying the legal capital shall be jointly responsible
for the accuracy of the capital certified at the time of
the founding of the enterprise.
Article 6: Lines
of business requiring practicing certificate
1.
The practicing certificate stipulated in Clause 4,
Article 6 of this Law on Enterprises is a document only
granted by the competent State agency or the professional
association to and individual with necessary specialization
and professional experience in a given line.
All the practicing certificates that have been granted to
organizations now cease to be effective.
2.
The following lines of business must have a practicing
certificate:
a)
Legal service;
b)
Medical examination and treatment service and pharmaceutical
business.
c)
Service of veterinary examination and treatment and
veterinary medicaments business;
d)
Construction designing service;
e)
Auditing service;
f)
Stock brokerage service.
3.
For the enterprises dealing in the lines stipulated
in Clause 2 of this Article, the business registration must
also include the conditions on the practicing certificate
as prescribed below:
a)
For a limited liability company or joint-stock company,
one of the managers of the enterprise as stipulated in Clause
12, Article 3 of the Law on Enterprises must have a practicing
certificate;
b)
For a partnership, all the members of the partnership
must have their practicing certificates;
c)
For a private enterprise, the enterprise owner or
managing director must have a practicing
certificate.
Article 7: Right
to register business lines
The enterprise may take the initiative in registering and
begin its business without having to ask permission from
any State agency if the line of business:
1.
Is not among the lines banned from business;
2.
Is not among the lines requiring business license;
3.
If not among the business lines requiring a legal
capital;
4.
Is not among the business lines requiring a practicing
certificate.
Article 8: Right
to found an enterprise
1.
All organizations regardless of the place of registration
of their head office, all individuals regardless of their
place of residence, if they are not a subject prohibited
from founding an enterprise as stipulated in Article 9 of
the Law on enterprises, have the right to found an enterprise
in Vietnam as provided for by the Law on Enterprises.
2.
Vietnamese having settled abroad and foreigners who
have their permanent residence in Vietnam are entitled to
found enterprises in Vietnam as stipulated by the Law on
Enterprises.
Article 9: Persons
prohibited from founding an enterprise and contributing
capital to the enterprise
1.
Organizations and individuals stipulated in Clauses
from 1 to 8 of Article 9 of the Law on Enterprises are not
allowed to found enterprises in Vietnam.
2.
State agencies and units of the people’s armed forces
are strictly forbidden to use State and public fund to establish
enterprises or to contribute capital to enterprises to make
profits for their agency or unit.
3.
State assets and public funds stipulated in Clause
2 of this Article comprise:
a)
Asset purchased with State budget fund;
b)
Expenditures allocated by the State budget;
c)
Land assigned for use in the fulfillment of the functions
and tasks stipulated by law;
d)
Assets and other revenues generated by the use of
the assets and expenditures mentioned above.
4.
Making profits for one’s own agency or unit is the
act of using profits gained from the business of the enterprise
or from the contributed capital for one of the following
objectives:
a)
Distribution in any form to a number or all of the
personnel of the agency or unit;
b)
To supplement the operating budget of the agency
or unit in contravention of prescriptions of legislation
on budget;
c)
To set up or supplement the fund in service of he
interests of the personnel of the agency or unit.
5.
Leading officials and professional management officials
in a State enterprise stipulated in Clause 4, Article 9
of the Law on Enterprises comprise members of the Management
Board, the General Director, Deputy General Director, Directors,
Deputy Directors, chief accountants, members of the Control
Board, heads and deputy heads of the professional departments
or sections, heads of the branches and representative offices
of the enterprise.
6.
Leading officials and professional officials in a State
enterprise are entitled to be the manager of another enterprise
in their capacity as authorized representation of a State
enterprise or competent State agency or, in their personal
name to contribute capital to another enterprise but not
work as the manager of such enterprise.
Article 10: The
company Charter
1.
The company Charter is the written commitment of
all members on the founding, managerial organization and
operations of the company.
The first Charter of a limited liability company must be
approved by all its founding shareholders.
The first Charter of a joint-stock company must be approved
by all its founding members.
The Charter of a partnership must be approved by all partnership
members.
The content of a company Charter must not be contrary to
the stipulations of the Law on Enterprises and other relevant
legal document.
2.
The Charter of a limited liability company must have
the following contents:
a)
Name and address of the head office of the company;
address of its branches and representative offices (if any);
b)
Objective and lines of business;
c)
The Charter capital;
d)
Names and addresses of the members, the capital amount
contributed by each member, for limited liability companies
having two and more members; name and address of the company
owner, for one-member limited liability companies );
e)
Rights and obligations of members or owner of the
company;
f)
Structure of management and control organization
(if any);
g)
Rights, obligations and modalities for adopting a
decision of each unit within the organizational and managerial
organization of the company;
h)
Rights, obligations and working regime of the Control
Board and the Head of the Control Board, for limited liability
companies having more than eleven members;
i)
The legal representative of the company;
j)
Principle of settling disputes among members;
k)
Cases where members have the right to ask the company
to buy back their contributed capital;
l)
Principle of distributing the profits, for companies
having more than two members, principle of using he profits,
for one-member companies;
m)
Cases of dissolution and procedures for liquidating
assets of the company;
n)
Modalities for amending and supplementing the company
Charter;
o)
Signatures of all members of the company or signature
of the company owner.
The members may agree or the company owner may decide to
inscribe other contents on the company Charter.
3.
The Charter of a joint-stock company must have the
following contents:
a)
Name and address of the head office of the company;
addresses of the branches or representative offices (if
any).
b)
Objectives and lines of business;
c)
Charter capital, types of share, total of shares
of each type eligible for offer for sale, denominations
of the shares;
d)
Rights and obligations of each type of shareholder;
e)
Cases where shareholders have the right to ask the
company to buy back their shares;
f)
Structure of management and control organization
of the company (if any).
g)
Rights, obligations and working regime of each unit
in the structure of management organization of the company
and of the Control Board and the Head of the Control Board;
h)
The legal representative of the company;
i)
Types of fund, the limit of each type of fund to
be set up in the company;
j)
Principle of paying dividend;
k)
Principle of settling internal disputes;
l)
Modalities for amending or supplementing the company
charter;
m)
Cases of dissolution, order and procedures for liquidation
of the company assets;
n)
Signatures of all founding shareholders or signature
of the legal representative of the company.
The shareholders may agree to inscribe other contents on
the company Charter.
4.
The partnership Charter must have the following contents;
a)
Name, address of the head office of the company;
addresses of the branches and representative offices (is
any);
b)
Objectives and lines of business;
c)
Names and addresses of all partnership members;
d)
Names and addresses of all capital contributing members
(if any);
e)
Rights and obligations of each type of members;
f)
Charter capital and capital amount contributed by
each member;
g)
Organizational and management structure of the company;
h)
Principle of coordination of work and allocation
of powers and responsibilities in the organizational and
management structure of the company;
i)
Modalities for adopting decisions of the company;
j)
Forbiddances or restrictions for partnership members;
k)
Cases where members have the right to withdraw from
the company or may be dismissed from the company;
l)
Principle of distributing profits or bearing losses
in the business operations;
m)
Method of solving differences among members;
n)
Modalities for amending or supplementing the company
Charter;
o)
Term of operation and cases where the company shall
be dissolved;
p)
Signatures of all members of the partnership.
Members of the partnership may agree to inscribe other contents
in the company Charter.
Article 11: Contents
of the register of members and the register of founding
shareholders
1.
A one-member limited liability company shall not
have to draw up the register of members;
2.
The members register of a limited liability company
having two or more members must contain the following:
a)
Name and address of each member;
b)
Capital amount contributed by each member and its
value;
c)
Types and quantities of assets as contributed capital;
remaining value of each asset, as contributed capital which
are neither Vietnamese money, freely convertible foreign
currency, nor gold;
d)
Time of the capital contribution;
e)
Signature of the legal representative of the company
or signatures of all members;
3.
The register of the founding shareholders of a joint-stock
company must have the following contents:
a)
Names and addresses of all founding shareholders;
b)
Total number of shares, number of shares of each
type of each founding member and their value;
c)
Types and quantities of assets as contributed share
capital; remaining value of each asset, for assets as contributed
share capital which are neither Vietnamese money, freely
convertible foreign currency nor gold;
d)
Time of the contribution to the share capital;
e)
Total number of shares, the value of all the shares
of all the founding shareholders.
f)
Signatures of all founding shareholders or signature
of the legal representative of the company.
4.
The register of members of a partnership must have
the following contents;
a)
Name and place of residence of each member;
b)
Occupation and specialization of each member;
c)
Contributed capital and its value;
d)
Types and quantities of assets as contributed capital;
remaining value of each asset, for assets as contributed
capital which are neither Vietnamese money, freely convertible
foreign currency nor gold;
e)
Time of capital contribution;
f)
Signatures of all partnership members.
Article 12: Conditions
for convening a meeting of the Members’ Council of a limited
liability company
1.
To hold a meeting of the Members’ Council, the number
of attending members must represent at least 65% of the
Charter capital, if the Charter of the company does not
prescribe another ratio higher than 65%. In cases where
the Charter prescribed a higher ratio, the minimum ratio
as prescribed by the company Charter shall apply.
2.
Where the Members’ Council is convened for the second
time, to hold its meeting, the number of attending members
must represent at least 50% of the Charter capital, if the
Charter of the company does not prescribe another ratio
higher than 50%. In cases where the Charter prescribes a
higher ratio, the minimum ratio prescribed by the company
Charter shall apply.
3.
In cases where the meeting of the Members’ Council is convened
for the third time, it shall be held anyway, regardless
of the number of attending members.
Article 13: Adopting
decisions of the Members’ Council
1.
The Members’ Council shall adopt decisions by voting
at the meeting or by a written opinion poll of the members.
2.
In cases of adoption of decisions by voting at the
meeting, the following provisions must be observed:
a)
The following decisions shall be adopted when the
votes representing at least 75% of the capital of the attending
members are in favor, if the company Charter does not prescribe
another ratio higher than 75%. If the company Charter prescribes
higher ratio, the minimum ratio prescribed by the company
Charter shall apply;
Decisions to sell assets valued equal to or higher than
50% of the total value of the company assets recorded in
the book of accounts of the company if the company Charter
does not prescribe another a ratio lower than 50%. If the
company Charter prescribes a lower ratio, the ratio prescribed
by the company Charter shall apply:
Decision to amend and/or supplement the company Charter;
Decision to reorganize the company, including division,
separation, consolidation, merger and conversion of the
company;
Decision to dissolve the company.
b)
Other decisions under the jurisdiction of the Members
Council shall be adopted when a number of votes representing
at least 51% of the capital of the attending members are
in favor, if the company Charter does not prescribe another
ratio higher than 51%. In cases where the company Charter
prescribes a higher ratio the minimum required ratio as
prescribed by the company Charter shall apply.
3.
In case of adoption of decisions by written opinion
poll of the members, the decisions of the Members’ Council
on all matters under its jurisdiction shall be adopted when
the number of members representing at least 65% of the Charter
capital of the company are in favor, if the company Charter
does not prescribe another ratio higher than 65%. In cases
where the Charter prescribed by the company Charter shall
apply;
4.
Procedures for the written opinion poll shall be
carried out as follows:
a)
The Chairman of the Member’s Council shall send to
each member the questionnaire enclosed with the necessary
documents. The questionnaire must state clearly the matters
polled for adoption of the decision and the deadline for
the members to send their answers to the company;
b)
To conduct the vote count and record in writing the
result of the vote count, to announce the result of the
poll and the decisions which are adopted to the members
within seven days from the deadline for the members to send
their answers to the company.
Article 14: Owner
of a one-member limited liability company
The organization that owns a one-member limited liability
company stipulated in Article 46 of the Law on Enterprises
must be a legal person and may include:
1.
State agencies, units of the armed forces;
2.
Party agencies at the central level or of a the centrally-run
province or city;
3.
The Central Committee of the Vietnam Fatherland Front
or the Front Committees in the centrally-run provinces and
cities;
4.
The Vietnam General Confederation of Labor and the
Labor Federations of centrally-run provinces and cities.
5.
The Central Committee of the Vietnam Women’s Union
and the Union’s organizations of the centrally-run provinces
and cities;
6.
The Central Committee of the Ho Chi Minh Communist
Youth Union and the Union organizations of the centrally–run
provinces and cities;
7.
The Central Committee of the Vietnam War Veterans
Association and its organization of the centrally-run provinces
and cities;
8.
The Vietnam Peasants Association and its organization
of the centrally-run provinces and cities;
9.
The Vietnam Union of Organizations for Peace, Solidarity
and Friendship;
10.
State enterprises;
11.
Enterprises of the Party and socio-political organizations;
12.
Cooperatives;
13.
Limited liability companies;
14.
Joint-stock companies;
15.
Social organizations, socio-professional organizations;
16.
Social welfare funds, charity funds;
17.
Other organizations.
Article 15: Rights
of the owner of a one-member limited liability company
1.
Based on Point (i), Clause 1, Article 47 of the Law
on Enterprises, the company Charter may add other rights
of the company owner. Other rights of the company owner
to be added to the company Charter shall depend on the managerial
organization model chosen and applied as prescribed in Clause
2 of this Article.
2.
In cases where the managerial organization model
comprising the Chairman of the company and the Director
(General Director) is applied, the company owner, apart
from the rights stipulated in Clause 1, Article 47 of the
Law on Enterprises, shall also have the following rights
and obligations:
a)
To decide the orientation for development of the
company;
b)
To decide the market expansion, marketing and technological
solutions;
c)
To adopt the contracts on borrowing, loaning and
other contracts stipulated in the company Charter and valued
equal to or higher than 50% of the total value of assets
recorded in the company’s book of accounts or a lower ratio
prescribed by the company Charter;
d)
To decide the organizational structure and the management
rules of the company;
e)
To decide to set up dependent companies, to contribute
capital to another company, to set up branches and/or representative
offices;
f)
To decide the salaries and bonuses for the Chairman
of the company, the Director (General Director) and other
managing officials appointed by the company owner.
Article 16: Organizational
and managerial structure of a one-member limited liability
company
1.
As stipulated in Clause 1, Article 49 of the Law
on enterprises, the organizational and managerial structure
of a one-member limited liability company shall adopt one
of these two models: The first model comprises the Management
Board and the Director (General Director) called Management
Board model stipulated in Article 17 of this Decree. The
second model comprises the company Chairman and the Director
(the General Director) called company Chairman model stipulated
in Article 18 of this Decree.
If the scope of business is big and the line of business
is diversified, the Management Board model should be chosen.
2.
The rights and obligations of the Management Board
and the Director (General Director) or the company Chairman
and Director (General Director) shall be decided by the
owner of the company and stipulated in the company Charter.
The owner of the company must not authorize the Management
Board and the Director to perform the rights and obligations
defined in Article 47 of the Law on Enterprises.
Article 17: Managerial
organization of the company according to the Management
Board model
1.
If the Management Board is adopted, the legal status,
rights and obligations of the Management Board and the Director
(General Director) shall comply with Clauses 2 and 3 and
Clauses 4 and 5 of this Article.
2.
The Management Board, as the managing agency of the
company, is fully entitled to act in the name of the company
in deciding all matters related to the management and operations
of the company, except those falling under the competence
of the company owner.
3.
The Management Board has the following rights and
obligations:
a)
To decide the development strategy of the company;
b)
To decide investment projects valued at less than
50% of the total value of assets recorded in the company’s
book of accounts;
c)
To decide the solutions for market expansion, marketing
and technology; to approve contracts of buying, selling,
borrowing, lending and other contracts valued at 50% or
more of the total value of assets recorded in the company’s
book of accounts or at a lower rate prescribed in the company
Charter;
d)
To appoint, remove or dismiss the Director (General
Director) and other key management officials of the company;
to decide the salaries and other benefits of these management
officials;
e)
To decide the company’s organizational structure
and management regulations, to decide
the setting up of branches and representative offices;
f)
To submit the annual fiscal report to the company
owner;
g)
To propose the plan of using the profits of the company;
h)
To propose the investment projects under the decision-making
competence of the company owner;
i)
To propose readjustment of the company’s Charter
capital;
j)
To propose the sale of assets valued at 50% or more
of the total value of assets recorded in the company’s book
of accounts;
k)
To propose supplements of amendments to the Charter
of the company;
l)
To propose the reorganization or dissolution of the
company;
Other questions related to the Management Board shall comply
with Articles 81,82,83,84,86,87 of the Law on Enterprises.
4.
The Director (General Director) is the manager of
the day-to-day operations of the company and is answerable
to the management Board for the implementation of the rights
and obligations assigned to him/her.
5.
The Director (General Director) has the following
rights and obligations:
a)
To decide questions related to the day-to- day operations
of the company;
b)
To organize the execution of the decisions of the
Management Board;
c)
To organize the implementation of the company’s business
plans and investment projects;
d)
To propose the organizational plan and managerial
regulations of the company;
e)
To appoint, remove and dismiss the managerial posts
of the company, except those appointed, removed or dismissed
by the Management Board;
f)
To decide the salaries and allowances (if any) of
the personnel in the company, including management officials
under the appointment authority of the Director (General
Director);
g)
Other rights and obligations as stipulated by law,
the company Charter and decisions of the Management Board.
Article 18: Managerial
organization according to the Company Chairman model
1.
In cases where the company Chairman model is adopted,
the legal status, rights and obligations of the company
Chairman and the Director (General Director) shall comply
with to the stipulations in Clauses 2 and 3 and Clauses
4 and 5 of this Article.
2.
The company Chairman is the person directly assisting
the company owner in exercising the rights and obligations
stipulated in Article 47 of the Law on Enterprises and Clause
2, Article 15 of this Decree.
3.
The company Chairman has the following rights and
obligations:
a)
To propose to the company owner to decide questions
under the latter’s authority;
b)
To make recommendations to the company owner on the
appointment, removal or dismissal of the Director (General
Director) and other managerial posts stipulated in the company
Charter; on the salaries and other benefits of these management
officials;
c)
To organize the supervision of the execution of the
decisions of the company owner; to report to the company
owner the results and situation of the business operations
of the company;
4.
The Director (General Director) of the company is
the manager of the day-to-day business operations of the
company, answerable to the company owner for the execution
of his/her rights and obligations. The Director (General
Director) is the legal representative of the company.
5.
The Director (General Director) has the following
rights and obligations:
a)
To organize the execution of the decisions of the
company owner;
b)
To decide questions related to the day-to-day operations
of the company;
c)
To organize the implementation of the company’s business
and investment plans;
d)
To issue the management regulations of the company;
e)
To appoint, remove and dismiss managerial posts in
the company except those falling under the authority of
the company owner;
f)
To propose the company’s organizational plan;
g)
To coordinate with the company Chairman in submitting
the annual financial report to the company owner and the
plan of using the profits and handling the losses in business;
h)
To recruit labor;
i)
To exercise the rights and tasks assigned honestly
and diligently in the lawful interests of the company;
j)
Not to misuse his/her position and posers or assets
of the company to make personal profits or profits for other;
not to disclose secrets of the company, except with the
consent of the company owner;
k)
If the company fails to pay fully the debts or to
fulfil other property obligations when they are due, he/she
must inform the company owner thereof and the creditors
of the financial situation of the company; he/she must not
raise wages, must not pay bonuses to the personnel of the
company including the mangers; he/she must take personal
responsibility for the damage caused to the creditors for
failing to carry out the obligations stipulated at this
point; he/she must propose measures to overcome the financial
difficulties of the company.
l)
Other rights and obligations prescribed by law and
the company Charter.
Article 19: Voting
preference share
1.
A voting preference share is a share which carries
more vote than an ordinary share. There is no maximum to
the votes of a voting preference share. The specific number
of votes of a voting preference share shall be prescribed
by the company Charter.
2.
For a newly founded company, the founding shareholders
must abide by the principle of consensus when deciding the
following questions:
a)
The total of voting preference shares;
b)
The number of votes of a voting preference share;
c)
The shareholder entitled to hold the voting preference
share and the number of voting preference shares of each
shareholder.
3.
In case the company is converted from a State enterprise,
the voting preference can be used only for an enterprise
operating in the following branches:
a)
Monetary, credit and other financial services;
b)
Post and telecommunications;
c)
Air transport;
d)
Other branches to be decided by of the Prime Minister.
The total of voting preference shares and the number of
votes of each voting preference share shall be decided by
the organization assigned to hold the voting preference
share in the equitized State enterprise at the proposal
of the related Minister or the related Head of the State
management agency.
Article 20:
Dividend of a dividend preference share
1.
The fixed annual dividend of a dividend preference
share is determined by the percentage of the total of share
capital actually contributed to the company. The annual
fixed dividend of a dividend preference share shall be determined
on the basis of the rate and the total of share capital
actually contributed to the company.
2.
The bonus dividend of a dividend preference share
is determined on the following principles:
a)
There shall be no bonus dividend in cases where no
dividend is paid to ordinary share or the dividend of an
ordinary share is lower than the fixed dividend of the dividend
preference share;
b)
If the dividend of an ordinary share is higher or
equal to the fixed dividend of a dividend preference share,
the bonus dividend must be added. The bonus dividend is
determined at such a level as to ensure that the total of
fixed dividend and bonus dividend of the dividend preference
share is higher than the dividend of an ordinary share paid
in that year;
c)
The fixed annual dividend and the method of determining
the bonus dividend shall be agreed upon by the company and
the related investors or shall be fixed by the company by
decisions of the General Assembly of shareholders.
3.
The rate of dividend, the total capital contributed
by the shares and the total fixed dividend received each
year and the method of determining the ordinary dividend
must be inscribed on the share certificate of the dividend
preference share.
Article 21: Redeemable
preference share
A joint-stock company is entitled to use two kinds of shares:
the redeemable preference share which is a share redeemable
at any time at the request of the shareholder and the share
which is redeemable on the conditions agreed upon between
the company and the related investor. These conditions must
be inscribed in the share certificate of the redeemable
preference share.
Article 22: Process
and procedures for sale offer of stocks
The companies shall offer for sale of shares and bonds in
the form of issuance of stocks to the public as prescribed
by the legislation on stocks. The offer for sale of shares
and bonds in other forms shall be decided and carried out
under the agreement between the company and the buyer.
Article 23: Conditions
and modalities for convening the General Assembly of shareholders
1.
Shareholders may attend in person or authorize others
to attend a meeting of the General Assembly of shareholders.
In case of authorization, the authorized person must produce
the letter of authorization and the share certificate to
the chairman before the meeting opens. A shareholder who
sends his/her sealed vote to the company before the opening
of the meeting of the General Assembly of shareholders is
deemed to attend the meeting.
2.
A meeting of the General Assembly of shareholders
shall take place when the number of shareholders represent
at least 51% of the shares with voting right, if the company
Charter does not prescribe a rate higher than 51%; in cases
where the company Charter prescribes a higher rate, the
required minimum rate prescribed by he company Charter shall
apply.
3.
Where the meeting of the General Assembly of shareholders
is convened for the second time, such meeting shall be held
when the number of attending shareholders represent at least
30% of the shares with voting right, if the company Charter
does not stipulate a rate higher than 30%. In cases where
the company Charter stipulates a higher rate, the minimum
rate as prescribed by the company Charter shall apply.
4.
Where the meeting of the General Assembly is convened
for the third time, it shall be held anyway regardless of
the number of attending shareholders and the rate of the
voting shareholders that they represent.
Article 24: Adoption
of the decisions of the General Assembly of Shareholders
1.
The General Assembly of Shareholders may adopt its
decisions by voting at the meeting or conducting a written
opinion poll of share holders.
2.
In cases where decisions are adopted by voting at
the meeting, the following provisions shall be complied
with:
a)
The following decisions shall be adopted when approved
by a number of shareholders representing at least 65% of
the attending shareholders if the company Charter does not
prescribe another ratio higher than 65%. If the charter
prescribes a higher ratio, the minimum ratio prescribed
by the company Charter shall apply:
Decision on the types and the number of shares of each type
that may be offered for sale;
Decision to amend and/or supplement the company Charter;
Decision to reorganize the company;
Decision to dissolve the company;
Decision to sell assets valued at more than 50% of the total
value of assets recorded in the company’s book of accounts.
b)
Other decisions under the jurisdiction of the General
Assembly of Shareholders shall be adopted when approved
by a number of shareholders representing at least 51% of
the total of votes of all attending shareholders if the
company Charter does not prescribe another ratio higher
than 51%. If the company Charter prescribes a higher ratio,
the minimum ratio prescribed by the company Charter shall
apply.
3.
Where the General Assembly of Shareholders adopts
a decision by a written opinion poll, the decision shall
be adopted when approved by a number of share holders representing
at least 51% of the total of votes of all shareholders if
the company charter does not prescribe a ratio higher than
51%. If the company Charter prescribes a higher ratio, the
required ratio as prescribed by the company Charter shall
apply.
4.
Where the decisions is adopted by a written opinion
poll of the shareholders, the Management Board shall have
to perform the following work:
a)
To decide the matters on which the poll is needed,
the form and contents of the questionnaire;
b)
The questionnaire of the opinion poll must include
at least the name and address of the head office of the
company; the aim of the poll; the question s targeted by
the poll and the titles of the enclosed relevant documents,
the deadline for sending the opinions to the company; the
plan for sending the opinions to the company; the plan for
voting “yes”, “no” or “abstention”.
c)
To send the questionnaire enclosed with the relevant
documents to all shareholders entitled to attend the meeting
of the General Assembly of Shareholders.
d)
To count the votes and write the minutes on the result
of the vote count; to announce this result and the decisions
adopted to all shareholders entitled to attend the meeting
of the General Assembly of shareholders within fifteen days
from the deadline for the shareholders to send their written
opinions to the company, unless the company Charter sets
another deadline.
Article 25: Minutes
of the meeting of the Management Board
All the meetings of the Management Board must be fully recorded
into the minutes book. The minutes of a meeting of the Management
Board must include the following:
1.
Time and place of the meeting;
2.
Names of the attending members;
3.
Agenda of the meeting;
4.
The questions discussed and voted on and the result
of the vote;
5.
Summarized speeches and opinions at the meeting;
6.
Decisions adopted by the Management Board;
7.
Signatures with full names of all attending members.
The Chairperson and Secretary of the meeting are jointly
responsible for the accuracy and truthfulness of the minutes
of the meeting of the Management Board.
Article 26: Partnership
1.
There are two types of partnership: Partnership where
all members are partnership members and partnership which
includes both partnership members and capital contributing
members.
2.
The specialization and professional prestige of a
partnership member are prescribed as follows:
a)
For partnerships dealing in business lines stated
in Clause 2, Article 6 of this Decree, all partnership members
must have a practicing certificate.
b)
For partnerships engaged in other lines of business,
the partnership members are persons having been trained
in these lines.
Article 27: Rights
and obligations of a partnership member
1.
A partnership member has the rights:
a)
To take part in discussing and voting on all affairs
of the company;
b)
To be distributed profits as agreed in the company
Charter;
c)
To take part directly in managing the business operations
of the company;
d)
To use assets of the company in service of the interests
of the company; to be redeemed of all expenditures made
in service of the interest of the company;
e)
To receive information on the business and managerial
operations of the company; to see the book of accounts and
other dossiers of the company;
f)
Other rights stipulated in the company Charter.
2.
A partnership member has the following obligations:
a)
To contribute fully the capital he/she has committed
to the company;
b)
To take responsibility with all his/her assets for
the obligations of the company;
c)
In case of business losses, he/she shall have to
bear the losses on the principle stipulated in the company
Charter;
d)
While managing or conducting business activities
in the name of the company or representing the company,
he/she must act in an honest and diligent manner in service
of the lawful interests of the company;
e)
To abide by the internal rules and decisions of the
company;
f)
A partnership member must not at the same time be
a partnership member of another partnership member of another
partnership or owner of a private enterprise;
g)
A partnership member must not on his/her own or in
the name of a third person conduct business operations in
the same line as the company;
h)
A partnership member must not in the name of the
company sign contracts and establish or carry out other
transactions with the aim of making profits of his/her own
or for another;
i)
Other obligations prescribed by the company Charter.
Article 28: Rights
and obligations of capital contributing members
1.
A capital contributing member has the right:
a)
To take part in discussing and voting on supplementing
and amending the rights and obligations of the capital contributing
members stipulated in the company Charter; on reorganizations
and dissolution of the company;
b)
To be distributed profits, to be distributed the
residual value of the as stipulated in the company Charter;
c)
To assign his/her contributed capital at the company
to another person unless otherwise prescribed by the company
Charter;
d)
To receive information on the business operations
and management of the company, to see the book of accounts
and other dossiers of the company;
e)
Other rights stipulated by the company Charter.
2.
A capital contributing members has the obligations:
a)
To fully contribute the capital he/she has committed
and to take responsibility for the debts of the company
within the value of the capital he/she has committed to
the company.
b)
He/she is not entitled to take part in the management
of the company, or to conduct business operations in the
name of the company;
c)
To observe the management rules and decisions of
the company;
d)
Other obligations prescribed by the company Charter.
Article 29: Managerial
organization of a partnership
1.
The Member’s Council composed of all members of the
partnership is the highest decision-making body of the company.
The Members’ Council decides all operations of the company.
When voting takes place, each partnership member shall have
only one vote.
2.
The following decisions must be approved by all partnership
members with voting right:
a)
Nomination of the director of the company;
b)
Acceptance of a member;
c)
Expelling a partnership member;
d)
Supplementing or amending the company Charter;
e)
Reorganization and dissolution of the company;
f)
Contract of the company with a member of the partnership
or a related person.
3.
The decisions on other matters must be approved by
the majority of the partnership members.
4.
All the decisions of the Member’s Council must be
recorded in the Book of Minutes and must be kept on file
at the head office of the company;
5.
In their activities, the partnership members shall
assign responsibilities among themselves to manage and control
the operations of the company and appoint one of them to
be the director.
The partnership members must take the initiative in performing
the tasks assigned aimed at attaining the objective of the
company; they shall represent the company in the negotiations
to sing contracts for carrying out the tasks assigned; represent
the company before law and State agencies within the
assigned jobs.
When performing tasks in the name of the company, the partnership
members must work honestly, not in contravention of the
decisions of the Members’ Council, not in violation of the
forbiddances or restrictions as stipulated in Clause 2,
Article 27 of this Decree.
6.
The Director of a partnership has the tasks:
a)
To assign duties, to regulate and coordinate the
work of the partnership members;
b)
To manage the work in the company;
c)
To perform other duties as empowered by the partnership
members.
Article 30: Acceptance
of members
1.
A person shall be accepted as member of the partnership
or as capital contributing member of the company when approved
by all members of the partnership unless otherwise provided
for by the company Charter.
2.
A partnership member accepted into he company shall
be responsible only for the obligations of the company arising
after he/she has registered with the business registration
agency.
Article 31: Termination
of membership status
1.
The status of a partnership member shall terminate
in the following circumstances:
a)
He/she has died or declared dead by the court;
b)
He/she is reported missing, is restricted in or has
lost his/her capacity for civil acts;
c)
He/she withdraws from the company of his/her own
free will;
d)
He/she is evicted from the company.
2.
In case of termination of membership status as stipulated
in Points a and b, Clause 1 of this Article, the company
still has the right to use the assets of this person corresponding
to his/her responsibilities to carry out the obligations
of the company.
3.
In case of termination of membership status as stipulated
at Points c and d, Clause 1 of this Article, this person
shall be jointly liable for the obligations of the company
arising prior to the registration of termination of his/her
membership status with the business registration agency.
4.
The membership status of a capital contributing member
shall terminate when he/she assigns his/her contributed
capital to another person.
Article 32: Withdrawal
from the company
1.
A partnership member is entitled to withdraw from
the company if approved by the majority of the remaining
members. When withdrawing from the company, his/her contributed
capital shall be redeemed at the agreed price or at the
price determined on the principle stipulated in the company
Charter. After withdrawing from the company, this person
still is jointly liable for the obligations of the company
as prescribed in Clause 3, Article 31 of this Decree.
2.
In case the name of the partnership member having
withdrawn from the company has been used to name the company,
this person may ask the company to change its name.
3.
The capital contributing member may withdraw his/her
contributed capital if approved by the majority of the partnership
members. The assignment of capital by the capital contributing
member to another person can be done freely except otherwise
prescribed by the company Charter.
Article 33:
Division of an enterprise
1.
The division of an enterprise shall be done only
with regard to the limited liability companies and joint-stock
companies. A limited liability company may be divided into
two or several other limited liability companies. A joint-stock
company may be divided into two or several other joint-stock
companies.
2.
The ratio of approving votes necessary to adopt the
decision to divide a limited liability company shall conform
to the stipulations in Point a, Clause 2, Article 13 of
this Decree.
3.
The ratio of approving votes necessary to adopt the
decision to divide a joint-stock company shall conform to
the stipulations in Point a, Clause 2, Article 24 of this
Decree.
4.
When dividing a limited liability company having
two or more members into several companies, the members
of the newly-founded company may adopt one of the two following
solutions:
a)
All members of the divided company are members of
the companies newly-founded from the divided company;
b)
The members of the divided company are divided into
corresponding groups as members of he companies newly founded
from the divided company. The division of the members of
the divided company into corresponding groups of members
of he companies founded from the divided company must be
effected according to the principle of consensus.
5.
When dividing a one-member limited liability company,
the owner of the divided company shall remain the owner
of the companies newly founded from the divided company.
6.
When dividing a joint-stock company into several
other joint stock companies, the shareholders of the newly-founded
companies may adopt one of these two solutions:
a)
All shareholders of the divided company are shareholders
of the companies newly founded from the divided company.
b)
The shareholders of the divided company are divided
into corresponding groups as shareholders of the companies
newly founded from the divided company. The division of
the shareholders of the divided company into corresponding
groups of shareholders of the companies newly founded from
the divided company must be approved by the shareholders
representing at least 65% of the total votes of all shareholders
attending the meeting of the General Assembly of Shareholders.
The shareholders who protest against the decided plan of
dividing share holders into corresponding groups may ask
the divided company to buy back their shares before to the
division of the company. The procedures of buying back the
shares shall be effected as stipulated in Clause 2, Article
64 of the Law on Enterprises.
7.
The handling of debts and other property obligations
of the divided company is prescribed as follows:
a)
The decision to divided the responsibilities of the
newly-founded companies with regard to the debts and other
property obligations of the divided company shall not have
legal effect on the creditors and those with related rights
and interests, except otherwise agreed upon by the newly-founded
companies and the creditors.
b)
All the companies newly founded from the divided
company shall be jointly liable for the unpaid debts and
other property obligations of the divided company, except
otherwise agreed upon by the creditors and the companies
newly-founded from the divided company. When the debts and
other property obligations are due, the creditors may ask
one of the companies newly founded from the divided company
to pay the debts and other property obligations which are
due. The company that is requested to pay the due debts
is entitled to ask the remaining companies to redeem the
corresponding part of the debt which it has paid.
Article 34: Separation
of enterprises
1.
The separation of enterprises shall apply only to
limited liability companies and joint stock companies.
2.
The rate of votes in favor necessary to adopt the
decision on separation of a limited liability company or
a joint stock company shall conform to the stipulations
of Point a, Clause 2, Article 13 and Point a, Clause 2 Article
24 of this Decree.
3.
In case of separation of a limited liability company
having two and more members, the members of the separated
company and the separating company shall be dealt with in
one of the following manners:
a)
The separated company becomes the owner of the separating
company.
b)
All members of the separated company are members
of the separating company;
c)
The members of the separated company are divided
into corresponding groups as members of the limited liability
company after separation of the company. In this case the
decision on the plan of dividing the members into corresponding
groups as members of the company after separation must be
approved by all members.
4.
In case of separation of a one-member limited liability
company, the owner of the separated company is also the
owner of the separating company or the separated company
is owner of the separating company.
5.
In case of separation of a joint-stock company, the
shareholders of the separated company and separating company
shall be dealt with in one of the following manners:
a)
All shareholders of the separated company shall be
shareholders of the new separating company;
b)
The shareholders of the separated company are divided
into corresponding groups as shareholders of the separated
company and the separating company. The division of the
shareholders of the separated company into shareholders
of the companies after separation must be approved by shareholders
of at least 65% of the total votes of all share holders
attending he meeting of the General Assembly of shareholders,
if the company Charter does not prescribe a higher ratio.
The shareholders into corresponding groups may ask the separated
company to buy back their shares prior to the separation
of the company. The procedures for buying back the shares
shall comply with the prescriptions in Clause 2, Article
64 of the Law on Enterprises.
6.
After separation of a limited liability company,
the outstanding debts and other property obligations of
the separated company shall be dealt with as follows:
a)
In case the separated company becomes the owner of
the separating company, the separated company still bear
full responsibility for the outstanding debts and other
property obligations; the separating company takes no responsibility
for the debts and other property obligations of the separated
company.
b)
In case all members of the separated company are
members of the separating company or the members of the
separated company are divided into corresponding groups
as members of the companies after separation, the separated
company and the separating company are both liable for the
outstanding debts and other property obligations of the
separated company arising prior to the separation except
otherwise agreed upon by the creditors, the persons with
related rights and interests and the separated company or
the separating company. In case no such agreement exists,
when the debts and other property obligations are due, the
separated company must repay these debts or perform these
property obligations. In case the separated company cannot
repay these debts or carry out these property obligations
arising prior to the separation of the company, the creditors
and the persons with related rights and interests may request
the separating company to pay the debts or perform other
property obligations when they are due.
7.
After separating a joint-stock company, the separated
company and the separating company shall be jointly liable
for the outstanding debts and other property obligations
of the separated company, except otherwise agreed upon among
the creditor, the persons with related rights and interests
and the separated company or the separating company. In
case no such agreement exists, when the debts or property
obligations are due, the separated company shall have to
repay the debts or to fulfil these property obligations.
In case the separated company cannot pay these debts or
does not fulfil the other property obligations arising prior
to the separation of the company, the creditors and the
persons with related rights and interests may request the
separating company to pay the debts or perform other property
obligations which are due.
Article 35: Basis
to determine whether an enterprise has paid fully the debts
and fulfilled other property obligations which are due.
An enterprise is deemed to have fully paid its debts and
fulfilled other property obligations which are due when:
1.
It has no outstanding debts nor other property obligations
that are overdue.
2.
It does not use new loans, including debt reschedules,
to pay debts and fulfil other property obligations which
are due.
Article 36: Basis
to determine whether an enterprise can ensure full payment
of its debs and fulfil other property obligations
A limited liability company and a joint-stock company is
deemed capable fully its debts and fulfil other property
obligations if the total value of assets recorded on the
accountancy balance sheet of the company is larger than
the total of debts and other property obligations to be
paid.
Article 37: Guidance
on the implementation provisions in Chapter X of the Law
on Enterprises
Based on Article 6 and Clause 3, Article 122 of the Law
on Enterprise, the following legal documents are now annulled:
1.
Decree No.221-HDBT of July 23, 1991 of the Council
of Ministers on the concretization of a number of articles
of the Law on Private Enterprises.
2.
Decree No.222-HDBT of July 23, 1991 of the Council
of Ministers on the concretization of a number of articles
of the Law on Companies.
3.
Decree No.361-HDBT of October 1st, 1992
of the Council of Ministers providing for the supplementation
and amendment of a number of points in the regulations issued
together with Decrees No.221 and No.222-HDBT of July 23,
1991 of the Council of Ministers.
4.
Decree No.26/1998/ND-CP of May 7, 1998 of the Government
on the readjustment of the legal capital of private enterprises,
limited liability companies and joint-stock companies.
5.
Prescriptions of Decree No.48/1999 ND-CP of July
8, 1999 of the Government for the representative offices
and branches of private traders and Vietnamese tourist enterprises
in the country and abroad relative to the establishment
and operations of the enterprises under the Law on Enterprises.
6.
Decree No.40/1998/ND-CP of June 10, 1998 of the Government
on the maritime transport business of the companies and
private enterprises.
7.
Circulars of the ministries, branches; decisions
of the Ministers and the Heads of the ministerial-level
agencies; decisions of the various levels of the local administration
as legal basis for the issuance of permits, certificates,
practicing certificates, the conditions for business and
other requirements applied to the lines of business of the
enterprises but which are contrary to the relevant of the
enterprises but which are contrary to the relevant laws,
ordinances and decrees.
Article 38: Implementation
provisions
This Decree takes implementation effect fifteen days after
its signing.
The Ministers, the heads of the ministerial-level agencies,
the heads of the agencies attached to the Government, the
Presidents of the People’s Committees of the centrally-run
provinces and cities shall, within their functions, tasks
and powers, have to organize the implementation of this
Decree.
The Minister of Planning and Investment shall assume the
prime responsibility in monitoring, supervising and periodically
reporting to the Prime Minister on the implementation of
this Decree.
On
behalf of the Government
Prime
Minister
PHAN
VAN KHAI |
