MINISTRY OF EDUCATION AND TRAINING

NATIONAL ECONOMICS UNIVERSITY

BUSINESS LAW

Mid-term test exam

Topic:
Some outstanding changes in the 2020 Enterprise
Law compared to the 2014 Enterprise Law

Name : Đỗ Hoàng Đức Mạnh

ID : 11193343
Class : ESOM K61

Hanoi – 2021
 TABLE OF CONTENT
PREAMBLE................................................................................................................................2
Content.........................................................................................................................................3
I. Analyzing a number of new regulations of the Enterprise Law 2020......................................3
1. Regulations on enterprise registration procedures...................................................................3
a. Subjects not established and managed by enterprises (Clause 2, Article 17)..........................3
b. Order and procedures for registration of enterprises (Article 26)...........................................4
c. Sign of business (Article 43)....................................................................................................4
2. Regulations on organization and management of joint stock companies................................5
a. Issuing custody certificates without voting rights (Clauses 6 and 7, Article 114)...................5
b. Rights of common shareholders (Article 115).........................................................................5
c. Auditing committee (Article 161)............................................................................................6
II. Analyzing and evaluating new points of the Enterprise Law 2020 compared to the 2014
Enterprise Law.............................................................................................................................6
a. About enterprise registration procedures.................................................................................6
b. About Organization and Management Joint Stock Company.................................................7
Conclusion...................................................................................................................................9
REFERENCING........................................................................................................................10

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 Preamble
The 2014 Enterprise Law has made a significant contribution to the process of completing
the business legal system, gradually building a ventilated, convenient business environment for
businesses. However, over time, the 2014 Enterprise Law has gradually revealed limitations and
shortcomings that are not really suitable for the socio-economic development process of the
country. Therefore, the amendment of the Enterprise Law to suit the demand of era is the urgent
task to do. With that spirit, the Enterprise Law in 2020 was born with adaptive changes,
especially regulations on enterprise registration procedures and managing joint stock companies.
This article will analyze and evaluate some new points of the Enterprise Law 2020 compared to
the Enterprise Law 2014 on enterprise registration procedures and organizations and manages
joint stock companies.

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 Content

I. Analyzing a number of new regulations of the Enterprise Law 2020

1. Regulations on enterprise registration procedures
a. Subjects not established and managed by enterprises (Clause 2, Article 17)
Clause 2, Article 17 is one of the provisions of enterprise registration procedures.
Specifically, this item specifies non-established and managed enterprises including:
“a) State agencies and units of the people's armed forces using state assets to establish business
enterprises to benefit their own agencies and units;
b) Officials and civil servants and officials according to the provisions of the Law on officials,
civil servants and officials;
c) Officers, non-commissioned officers, professionals, workers and defense officials in agencies
and units of the Vietnamese People's Army; Officers and non-professional officers, police
workers in agencies and units of Vietnamese People's Council, except for persons being
appointed as authorized representatives to manage the state capital contribution at enterprises
or management at state-owned enterprises;
d) Leadership and professional management officials in State enterprises according to the
provisions of Point a, Clause 1, Article 88 of this Law, except for persons being appointed as
authorized representatives to manage the contributed capital of the State Other businesses;
d) Minors; People with limited civil act capacity; People with civil act capacity; people with
difficulties in awareness and behavioral owners; Organizations do not have legal status;
e) The person who is being examined for penal liability, temporarily detained, is abiding by
imprisonment penalty, is abiding by administrative processing measures at compulsory
detoxication establishments, compulsory educational establishments or hitting courts
Prohibitions to take charge of position, prohibit practice or do certain jobs; Other cases in
accordance with the Bankruptcy Law, Law on Corruption Prevention and Control.
In case the business registration agency has required, the person who registered the
establishment of enterprises must submit judicial record cards to the business registration
agency;
g) Organizations are commercial legal entities banned from business, prohibiting operations in
certain areas according to the provisions of the Criminal Code. "

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 The above objects are not suitable to conduct established activities, business management.
For officials, civil servants, officials who hold the role of state management in many areas, this is
considered as a measure to prevent corruption, avoiding the turning business into the backyard to
gain illegal benefits . For those specified at Points, they do not or have no full civil act capacity
so they are prohibited from participating in establishment and management of enterprises. For
organizations that are commercial legal entities banned from business and operations in certain
areas according to the provisions of the Criminal Code, this is a regulation to eliminate unhealthy
economic organizations, term Processing the country's development, adversely affecting society.
b. Order and procedures for registration of enterprises (Article 26)
Enterprise Law in 2020 stipulates the methods of enterprise registration including:
registering enterprises directly at the business registration agency; Business registration through
postal services and business registration via electronic information network.
Clause 2 detailed regulations on enterprise registration over the Internet, accordingly, the
establishment of the enterprise will submit a business registration dossier via e-information
network at the national portal on enterprise registration. The registration dossier includes the data
prescribed in the Enterprise Law 2020 is shown in the form of electronic documents and has
equivalent legal validity such as a paper enterprise registration records.
Organizations and individuals have the right to use digital signatures or use their business
registration accounts created by the national information system on enterprise registration to
register businesses via electronics.

c. Sign of business (Article 43)

"first. The mark includes a marker in the basis of marking or sign under the number of digital
signatures according to the law on electronic transactions.
2. Enterprises decide the type of seal, quantity, form and contents of the seal of enterprises,
branches, representative offices and other units of enterprises.
3. The management and storage of the implementation shall comply with the provisions of the
Company's Charter or Regulation shall be signed by enterprises, branches, representative offices
or other units of enterprises. Enterprises use signs in transactions in accordance with law. "
Pursuant to the provisions of Clause 6, Article 3 of Decree 130/2018 / ND-CP: "The digital
signature is an electronic signature created by transforming a data message using the password
system Asymmetry, accordingly, the person who obtained the initial data message and the public
key of the signed person can be determined correctly: a) The above transformation is created with
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the correct secret key corresponding to the key Publicly in the same key pair; b) The content
integrity of the data message since the transformation mentioned above ".
Clause 2 of this Article empowers enterprises in deciding the type of seal, quantity, form
and contents of the business, branches, representative offices and other units of enterprises. This
is perfectly consistent with the abolition of procedures for notifying seals according to the 2014
Enterprise Law.
2. Regulations on organization and management of joint stock companies
a. Issuing custody certificates without voting rights (Clause 6, 7, Article 114)
"6. Universal shares are used as a basic asset to issue a depository certificate without
voting rights called a junior universal share. Custody certificates do not have voting rights with
economic benefits and obligations corresponding to junior higher-common shares, except voting
rights.
7. The Government stipulates on depository certificates without voting rights ".
Pursuant to Article 140 Decree 155/2020 / ND-CP "Citing certificate does not have voting
rights is a type of securities issued by the subsidiary of the Stock Exchange for foreign investors
on an shareholder Coupons of listed companies, transaction registration ".
Based on the above provisions, it is understandable that the custody certificate does not
have voting rights as a custody certificate issued based on the baseline asset as a common share,
and this certificate itself is not share. Therefore, owning a depository certificate does not have
voting rights will not lead to a change in the capital ratio that investors are holding in joint stock
companies, as well as not affecting the charter capital of Joint Stock Company in general.
However, there is a very clear restriction set for this type of certificate, shown right in its
name - that is no voting rights. And the 2020 Enterprise Law also does not record any exceptions
to this case, so it can be understood that NVDR will not bring it to the owner of any voting rights
to all issues at the Great shareholders.

b. Rights of common shareholders (Article 115)

Article 115 Split objects entitled to certain rights into two groups, including: shareholders
or groups of shareholders from 5% of the total number of common shares or more or a smaller
ratio prescribed in the Charter The company (Clause 2, 3, 4) and shareholders or shareholders'
groups owned from 10% of the total common shares or a smaller ratio prescribed in the
Company's Charter (Clause 5).

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 In particular, Article 115 has had the right to expand the right to the shareholders from 5%
of the total common shares or a smaller ratio prescribed in the company's Charter. Helping them
can closely monitor the company's activities and participate in the company's important decisions
just fairly, ensuring the legitimate rights and interests they enjoy.
For shareholders or shareholders owning 10% of the total number of common shares or
higher or a smaller ratio prescribed in the Charter of their company entitled to its own benefit is
to nominate the Council Administration, Supervisory Board.

c. Auditing committee (Article 161)

The Auditing Committee is a specialized agency of the Board of Directors, which is
required to be established when a joint stock company decides to choose the General Meeting of
Shareholders, the Board of Directors, Director - CEO to operate (Article 137).
Article 161 Detailed statements of legal status, structure, member conditions, forms
through decisions as well as the rights and obligations of the Audit Committee. Accordingly, the
Audit Committee will have the task of transparency of the company's activities or in other words
to monitor the company's operations. With this highly binding regulation, the audit committee in
each joint stock company will be organized closely and operates effectively, creating a healthy
working environment within the internal joint stock company.
II. Analyzing and evaluating new points of the Enterprise Law 2020 compared to the 2014
Enterprise Law
a. About enterprise registration procedures
Add non-established objects:
Specifically, the 20020 Enterprise Law supplemented many subjects that were not allowed
to establish and manage enterprises compared to the 2014 Enterprise Law, including: people with
difficulties in awareness and acts; Police workers in the agencies and units of the Vietnamese
People's Council (except for those who are appointed as authorized representatives to manage the
state capital contribution at the enterprise); Organizations are trade legal entities banned from
business, prohibiting operations in certain areas according to the provisions of the Criminal Code.
Specifying business registration methods:
Business registration methods via electronic information networks Although not yet
legalized in the 2014 Enterprise Law, have been implemented in practice. Through the process of
applying this method to promote positively in the improvement of environmental quality

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investment, cost savings and travel time. Therefore, the 2020 Enterprise Law has lawying this
method.
The method of registration of businesses through post and telecommunications services is a
new way compared to the 2014 Enterprise Law, which has been recorded by the 2020 Enterprise
Law to expand the method of implementing business registration.
Thorough reform on the seal of the enterprise:
Firstly, the first time the 2020 Enterprise Law records a sign in the form of digital
signatures. Along with that, Decree 130/2018 / ND-CP also detailed issues related to digital
signatures, convenient for enterprises to apply into practice. Digital signatures are used to replace
common signatures in electronic transactions and always ensure equivalent legality according to
the regulations of electronic transactions. This is a new point in accordance with a strong growing
4.0 industry background.
Second, under Clause 1, Article 44 of the 2014 Enterprise Law, the enterprise is entitled to
decide the contents and forms of seals but must show two information: business names and
business codes, however, laws Enterprise 2020 does not require the content required to express
on the mark of the business. At the same time, to abolish Clause 2, Article 44 of the Enterprise
Law 2014 on procedures for notifying the seal sample with the business registration agency of the
enterprise.
Third, according to the provisions of the Enterprise Law 2020, enterprises are still required
to have at least one mark and have the right to decide the type of sign. It can be seen that
additional "enterprises decide the type of sign" to compatibility with the provisions of Clause 1,
Article 43 when recording there are two types of marks as a base mark and the sign below the
form of digital signatures. Thus, the digital signature as a sign of the business can be used in
transactions that are not required to use the usual sign as in the provisions of the 2014 Enterprise
Law.
b. About Organization and Management Joint Stock Company
Supplementing regulations on issuing depository certificates without voting rights:
Under the provisions of the Enterprise Law in 2020, the custody certificate has no voting
rights issued in Vietnam by shareholders who issue a depository certificate without voting rights
corresponding to universal shares depository as a facility property. Depository certificates have
no voting rights with all the benefits, rights and obligations corresponding to the junior universal
shares, except voting rights. The addition of regulations on a custody certificate does not have the

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expectation to contribute to diversifying the trading products to the stock market; At the same
time, helping businesses, especially businesses trading in limited businesses to own foreign
investors, have greater opportunities in attracting capital from investors, including foreign
investors . In this case, the enterprise management objectives are still guaranteed, but enterprises
can mobilize additional capital from investors with a depository certificate without voting rights.
Expand the rights range of small shareholders in the Joint Stock Company:
The Law on Enterprises 2020 has added the group of "shareholders or groups of
shareholders owning 05% of the total number of common shares or higher or a smaller
percentage in accordance with the company's Charter" Certain rights. Accordingly, the group of
these subjects entitled to the same rights with "shareholders or groups of shareholders owning
10% of the total number of common shares or more within a continuous period of at least 06
months or a smaller percentage of smaller rates planning in the Company's Charter "under the
Enterprise Law 2014, except for the right to nominate people into the Board of Directors and
Supervisory Board; At the same time, to expand the right to review, look up and extract the
Company's documents for both the contract, the transaction must go through the Board of
Directors and other documents, except for commercial secret documents , Secrets of the
Company "(Point a, Clause 2, Article 115). In addition, stock ownership conditions "Within a
continuous duration at least 06 months" are also abolished. The Enterprise Law in 2020 expanded
the level and scope of shareholders' rights to create favorable conditions for shareholders to
protect their legitimate interests. Limit managers or major shareholders to abuse status, powers
causing damage to small companies and shareholders.
Additional regulations on auditing committee:
Previously, the Internal Audit Board of Joint Stock Company has not promoted its
effectiveness in corporate monitoring. Therefore, the Enterprise Law 2020 regulates a joint-stock
company operating with the General Meeting of Shareholders, the Board of Directors, Director -
CEO to have the Auditing Committee instead of the Internal Auditor Department as in the
provisions of the Enterprise Law 2014. At the same time , The 2020 Enterprise Law has added a
completely new regulation to detail the Audit Committee (Article 161). This new regulation is
expected to be oriented and monitored that a number of specific governance areas include
establishing, implementing and ensuring the effectiveness of internal audit for joint stock
companies.

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 Conclusion
The 2020 Enterprise Law has been showing more and more significant effects, positively
affecting the business community, creating a favorable, ventilated, transparent and fair business
environment. Changes show that the conformity with the general trend of the world as well as
meeting practical conditions in Vietnam. Hope that in the near future, the 2020 Enterprise Law
will promote higher efficiency, creating many new opportunities for enterprises to attract foreign
investment capital, improve competitiveness between Vietnamese enterprises with businesses
Overseas countries.

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 Referencing
1. Enterprise Law 2020.

2. 2014 Enterprise Law.

3. Article: Organization and management of joint stock companies according to the Enterprise
Law 2020; Author: Manh Thi Thu Hien; Democratic Magazine and Law, Ministry of Justice,
2020; Topic number 8, p. 8 - 11.

4. Workshop documents: New points of the Enterprise Law 2020; Department of Commercial
Law, City Law University. Ho Chi Minh; City. Ho Chi Minh; 9/9/2020.

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