tranthanhtam2010@ftu.edu.

vn
đề mở được đem tài liệu
1 lần trừ 0.1đ
10 - 11 người 1 nhóm

Chapter 1: Overview of Law on Finance & Banking

Chapter 2: Law on banking in Vietnam
Chapter 3: Law on state budget (self-study)
=============================================================

Chapter 1: Overview of Law on Finance & Banking

I. Fundamentals
1. Definition
- Legally enforceable rules: if you break the rule, you will subject to punishment;
- Authorities:
+ National Assembly: → legislation;
- Law in VN:
+ Legislation: văn bản luật;
+ Delegated legislation: văn bản dưới luật;
● Ordinance (pháp lệ);
● Decree (nghị định);
● Circular (thông tư);
● Decision (quyết định);
● Resolution: nghị quyết.
- Banking and finance activities:
+ Finance:
● Management of money;
● Public finance: state budget, credits, insurance;
● Private finance: credits, corporate finance, residential finance;
(Public finance is concerned with the expenditure and revenue of the government.
Private Finance is considered with the expenditure and revenue of individuals and
business firms.)
 + Banking: Banking activity shall be the permanent trading, supply of one or more of
following operations:
● Deposit taking (nhận tiền gửi);
● Credit extension (cấp tín dụng);
● Supply of account payment service (cung cấp dịch vụ thanh toán qua tài
khoản);
Ques:
1) Company A takes advantage of its temporary funds → not banking activities bcs it’s
just temporary activities, not permanent;
2) A remits 10 mil to his relatives via post office → not banking activities;
3) A,B, C contributed capital to set up Thien Thanh Co., Ltd. This company often takes
deposits from A,B,C & their relatives to provide loans to others → banking activities
(by credit non-bank institutions).
+ Credit institution;
+ Credit non-bank institution: Finance company, cty cho thuê tài chính.

2. Sources of law in VN
a) Sources of law in VN and their hierarchy

Difference between Law & Code:

- Law & code: basic legal documents created by NA;
- Code: govern a specific issue only → a group of laws related only to that issue
- Scope of law is much narrow than scope of code

Ques: Law & Code, which one is higher in the legal framework?
Law and code have the same validity and prevailed, khi áp dụng thì cái nào relevant hơn
thì dùng cái đó.
Ques: Lending activities of credit institutions is subjected only with Law on credit institution,
true or false?
→ False, because these activities are also included in delegated legislation.

Ques: What should be covered if it is not mentioned (too general) in the law?
→ We should find whether we have any other decrees regarding the financial company and
any circulars related. (Both help explain the law & provide more in4 that is already provided
in the law);

- Decree:
+ Only the government is allowed to make the decrees, not the prime minister;
+ Function: specific guideline for implementation of law;
- Circular:
+ 2 main parties create the Circular in VN:
● Minister of ministry (Bộ trưởng);
● Head of ministerial-level agencies (cơ quan ngang bộ): SBV, government
office, thanh tra chính phủ, ủy ban dân tộc).

+ Function: provide detailed regulation and guidelines for the implementation of

decrees.
- Ordinance:
+ Created by the Standing committee of the national assembly (ủy ban thường
vụ quốc hội)
+ Function: to govern the issue which is not mentioned in the law.

Ques: When there is conflict between 2 legal documents, which one will prevail?
→ The one created by the higher authority will prevail

→ Ordinance > Decree > Circular.

Ques: Compare Law & Ordinance?

● Process to make law (law thì stable & hard to change): complicated, phải được sự
đồng thuận → take longer time
 ● Process to make ordinances (unstable & easy to adjust/change): creative and quickly
→ easily governs sth new that is not included in law → ordinance belongs to
delegated legislation.

Ques: Is the official letter the legal document?

→ Because it is not listed in the Article 4 of Law on Promulgation of Legal Documents, it is
not binding, sometimes it can change since it’s not the law. But the official letter is still very
important.
- Law on Promulgation of Legal Documents (luật ban hành văn bản quy phạm pháp luật)

* Hierarchy:

b) Sources of Finance & Banking law in VN

 II. Legal relations of banking & finance
1. Definition

Legal relations of banking and finance are social relations arising from banking and finance
activities;
2. Elements
- Parties: State, organizations, individuals;
- Object: Interests that the parties aim at;
- Content: Rights and obligations.

Ques: Banking operations are mainly governed by delegated legislation, T/F?

→ True: delegated subject to change. Due to the characteristic of the finance market which is
dynamic & subject to change, most of the banking operations are mainly governed by
delegated legislation.

- Definition: Legal relations of banking and finance are social relations arising from banking
and finance activities.

Ques: Which of the following are the legal relations of banking & finance?
1) Com A imported wines for sales:
→ Not banking but finance because Com A has to pay all the taxes for the
government → belongs to public finance.
2) Com B grants a loan of 500 mil VND to B:
→ Not banking and finance. B not the credit institution → loan is covered in the Civil
Code (civil relation).
3) B opened a savings account at VCB:
→ Banking relations. Supply account payment service → include in the banking
operation.
4) Prudential VN provides loans to customers:
→ Banking relations, bcs prudential VN is a financial institution, made loan, credit
extension.
5) SBV issued Circular 24/2012/TT-NHNN regarding the termination of mobilization
and provision of loans in gold by credit institutions:
→ Legal relation.
Element listed:
- Parties: SBV & credit institutions;
- Object: termination of mobilization and provision of loans in gold;
- Content: state (?) management, the right & obligation of credit institutions in
the termination of mobilization and provision of loans in gold.
 Chapter 2: Law on Banking IN VIETNAM

PART 1: Law on credit institutions

1. DEFINITION, FEATURES & TYPES:

1.1) Definition:
Credit institution means an enterprise conducting one, some or all banking operations.

1.2) Features:
- Economic organization with the purpose of conducting business;
- Having its own name, assets, stable office;
- Conducting banking operations is considered as regular main business activity;
- Under the control of The State Bank of Vietnam (SBV).

Ques: The differences between credit institutions & other companies?

Credit institution Other company

- Main business: banking operation

- Under the control of SBV;
- Manager: nhiều người biết, much stricter
requirement;
- conduct the banking operation.
- Under control of Department of
planning and investment;
- Manager: không yêu cầu cao, nobody
known;
- can do business activities to generate the
profit, but cannot conduct the banking
operation.

Ques: Commercial bank means a type of bank which may conduct all banking operations and
other business activities unless it is approved by SBV. T/F?
→ False. Because commercial banks can conduct all banking operations and other business
activities under the law. If it is not mentioned in law, then we need to get the approval from
the state bank.
1.3) Types:

i) Bank :
Bank means a type of credit institution which may conduct all banking operations under
this Law. Based on their characteristics and operation objectives, banks include
commercial banks, policy banks and cooperative banks.

- Commercial banks: Commercial bank means a type of bank which may conduct all
banking operations and other business activities under this Law for profit.

+ State-owned:
* Article 4.11 - Law on Enterprises: State owned enterprises comprise enterprises in
which the State holds above fifty per cent (50%) of the charter capital and/or the total
number of voting shares,
* Article 6.2 - Law on Credit Institutions: State commercial banks shall be established
and organized in the form of a single member limited liability company with one
hundred (100) per cent charter capital owned by the State.
 Ex: Agribank; Global Petro Bank; Ocean Bank; Construction Bank.
+ Joint-stock: BIDV, Vietinbank, VCB (cx là nhnn cx có state-own nma được xếp vào
cổ phần, vì nhnn thì phải trên 50%).
+ Joint-venture: cooperation between domestic and foreign banks;
Ex: Indovina; VN- Russia Joint venture bank.
+ Wholly foreign-owned:

- Policy banks:

The Government shall establish policy banks operating not for profit to implement the State’s
socio-economic policies.

+ Vietnam Bank for Social Policies (Ngân hàng chính sách xã hội Việt Nam);

+ Vietnam Development Bank (Ngân hàng phát triển Việt Nam);

- Cooperative banks: (ngân hàng hợp tác xã)

Cooperative bank means a bank of all people’s credit funds established by people’s credit
funds and some legal entities by contributing capital under this Law for the main purposes
of systematic link, financial support and capital balancing within the system of people’s
credit funds. (Article 4.7)
→ Main purpose (support people’s credit funds ONLY) & parties involved.

Ques: Only cooperative banks can be established and organized under the form of
cooperative. T/F?
→ False. Not only Cooperative banks but also People’s credit fund.

ii) Non-bank credit institution:

Non-bank credit institution means a type of credit institution which may conduct one or
some banking operations under this Law, except taking deposits of individuals and
providing services of payment via client accounts. Non-bank credit institutions include
finance companies, financial leasing companies and other non-bank credit institutions.

- Finance company: (cty tài chính)

The finance company constitutes a type of non-bank credit institution, with function of using
equity capital, mobilized capital and other capital sources to provide loans, make investment;
provide services on financial or monetary consultancy and provide some other services under
the provisions of law, but not to provide payment services, not to receive under-one year-
deposits.
Example of finance company:

- Financial leasing company: (cty cho thuê tài chính)

Financial leasing company means a type of finance company whose principal operation is
financial leasing under this Law.

iii) Microfinance institutions:

Microfinance institution means a type of credit institution which mainly conducts some
banking operations to meet the needs of low-income individuals and households and super
small-sized enterprises.

Ques: How can we be divided as low-income individuals?

Có nghị định nói là ở vùng nông thôn, thu nhập dưới 200k là thu nhập thấp, ở thành phố dưới
260k là thu nhập thấp.
→ We (students) are NO-income individuals.

Ques: How can we be divided as super small-sized enterprises?

Depends on the scale capital of the company and the number of employees.

iv) People’s credit fund (quỹ tín dụng nhân dân):

People’s credit fund means a credit institution established voluntarily by legal entities,
individuals and households as a cooperative to conduct some banking operations under this
Law and the Law on Cooperatives for the main purpose of mutual assistance in
production and business development and life.
v) Foreign credit institutions:

Ques: UOB VN is the foreign credit institution (NOT foreign owned credit institution), T/F?
False. UOB comes to VN and set up a new bank in Vietnam → UOB VN.
→ Foreign-owned company, NOT foreign company / foreign credit institution.
→ Vietnam credit institution.

2. FORM OF ENTERPRISES - LoE:

2.1) Multi LLC - Limited Liability Company with 2 or more members:

i) Characteristics: (Article 46 - Law on Enterprises)

- Member:
+ Can be an individual or an organization (khác với Law on Credit Institution →
thuyết trình phải phân biệt) (Ques: Can FTU establish an LLC? Can you - FTU
student establish an LLC→ Yes, based on definition)
+ 2-50 members

Ques: Why do they put a limitation on 50?

→ Depends on the gov
Small & medium scale companies are suitable for an LLC; Large companies are
suitable for JSC;
 If we have 51th members, the company will transfer to Share holding company, which
is not require the maximum members.

Ques: If you and your friend establish an LLC, and he doesn’t want to invest in your
company anymore. How can you cope with that problem?
→ You must find another member to keep the form of LLC.

- Member liability:
Ques: If there are 3 members
+ A (contribute 400mil)
+ B (300mil)
+ C (300mil)
( → Company’s property: 400+300+300 = 1bil: charter capital)
If there is a company debt (not individual debt) of 3bil, who will pay that debt?
Member have limited liability → they lose their initial investment (400+300+300)
chứ không có trách nhiệm phải đóng thêm tiền để trả nợ. Company will sell all of
their assets until it cannot pay for debt. It will sign bankruptcy (last resort - xù nợ 1
cách hợp pháp). Chủ nợ gồm có 2 loại, secured & unsecured. Nếu secured thì sẽ giống
như mua bảo hiểm và được trả 1 phần tiền, còn unsecured thì mất hết.

- Ability to issue shares: Must not issue shares except when it converts to become a
shareholding company;
Ques: Why is LLC not allowed to issue shares but can issue other kinds of securities
such as bonds…?
→ The characteristics of LLC are just suitable for small & medium scale companies,
don’t want to break the capital structure of the company and don’t want to go beyond
the maximum members of 50.

- Legal entity (pháp nhân): from the date of issuance of its Enterprise Registration
Certificate (ERC)
+ Legal entity refers to the company created by the law.
+ We are natural people, not a legal entity. We are just members of a legal entity
(company).

Ques: Doanh nghiệp tư nhân có phải là legal entity không?

 → No, bcs asset of owner & company is 1 thing chứ ko có độc lập, not a legal person.
Chủ doanh nghiệp tư nhân mới là pháp nhân. Kiện chủ company.

Ques: If your company sets up a new branch in HCMC, is that a legal entity?
→ Not, the branch is just dependent, tài sản ko độc lập với tổ chức. Có thể sign
contract with branch, but nếu có conflict thì phải kiện đại diện pháp nhân của cty -
owner of that company ra tòa chứ ko phải chủ chi nhánh (khi kiện chỉ có thể kiện
individual or legal entity).

ii) Finance

- Capital contribution:

+ Contributed assets (Art 34 - LOE): Vietnamese Dong, freely convertible foreign

currency, gold, land use rights, intellectual property rights, technologies, technical
know-how and other assets which can be valued/converted in Vietnamese Dong.

Ques: Can knowledge be contributed as an asset or not?

→ No, bcs it’s intangible, hard to cover as an asset.

+ Valuation of contributed assets (Art 36 - LOE):

● Contributed assets that are not VND, convertible foreign currencies or gold
shall be valued by members/partners/shareholders or a valuation
organization and expressed as VND.

+ Capital contribution to establish the company and issuance of the certificate of

capital contribution

+ Transfer of ownership of contributed assets (Art 35 - LOE): Assets of the owner

and assets of doanh nghiệp tư nhân are the same, so you don’t need to transfer.

+ Obligation of capital distribution: got 90 days to contribute your capital to the

company.

Ques:
 → Based on Art 47 - LOE, a member of the company is only permitted to contribute
capital to the company by another type of assets different from the assets undertaken
if more than fifty (50) percent of other members so agree.
So C can change if more than 50% of members agree and allow C to change. If only
A (or only B) agree, C can not change. If both A & B agree, C can change.

→ B is still a member of the company and still liable until the company registers the
change in charter capital amount.

Ques: When a company has profit, will B receive the revenue as what B has
contributed (200mil) or what B has to contribute (350mil)?
→ 200mil. Your right is based on your contributed amount (200mil), BUT your
liability is based on your committed capital amount (350mil). When company has
profit, B receive revenue according to 200mil, BUT when company has debt, B has to
pay according to 350mil.

- Transfer of contributed capital amount (Art 52 - LOE):

Ques: Can we change/sell directly the capital amount to our parents/friends?

→ Cannot transfer directly, they have to sell to the internal member first, if they don’t
want to buy or just buy a part, then you can sell to the non-member of the company
within 30 days.

Ques: Why do we have a limitation of 30 days?

 → Due to the characteristics of LLC, limited number of members only, family
company. May have risk, to protect the company & other members of the company,
you have to sell to the members first.
Ques:
A = 200mil
B = 300mil
C = 250mil
D = 350mil
E = 150 mil
C wants to transfer his capital amount:
1) If the 4 remaining members want to purchase C’s capital amount.
A+B+D+E = 1000 mil = 100%
A = 250 x 200 / 1000 = 50 mil
B = 300 x 200 / 1000 = 60 mil
D = 350 x 200 / 1000 = 70 mil
E = 150 x 200 / 1000 = 30 mil.
2) Only A & B want to purchase.
A+B = 500mil = 100%
A = 250 x 200 / 500 = 100 mil
B = 300 x 200 / 500 = 120 mil
3) Only E wants to purchase.
● Condition of transfer: anytime, if you don’t want to be the member of the
company anymore, then you can just transfer it to others
● Transfer the ownership only, the charter will remain unchanged.
● If you just transfer part of the capital amount, you can still be a member of the
company.

- Redemption of contributed capital amount (Art 51.1 - LOE):

+ Termination of member status (you are no longer the member of the company).
+ The charter capital will be decreased.
Ques: Distinguish redemption and transfer capital amount.
→ Receiver in case of redemption is the company, while in case of transfer it can be
the company or the non-member.

Ques: What are the conditions of the company to purchase your capital amount?
 → 1) change or to revise the charter of company, you don’t want to be the member of
company anymore
2) Reorganization of the company (tổ chức lại doanh nghiệp): e.g: merge with other
company, may affect your right → ask company to redeem your capital amount &
sacrifice your right.

Ques: (Based on Art 53 - LOE: Transfer in some special cases): T/F?

1) False. Art 52.5 - LOE: The son can only get the property if A dies unexpectedly and
leaves no attachment/.
2) False. B cannot become a member of company without the approval of the other
members.
3) False. C cannot become a member of the company without the approval of the other
members.

ii) Management structure Art 54 - LOE

Members’ Council: Hội đồng thành viên → Chairman of Member

Ban kiểm soát: not compulsory in all cases, just compulsory in State-owned LLCs
→ >50% of charter capital: State-owned LLCs and its subsidiary: Controlling board is
compulsory.

- Legal representative
The company must have at least one (1) legal representative holding the position of chairman
of the Members' Council or director or general director. If the company charter does not
contain any [relevant] provision, then the chairman of the Members' Council is the legal
representative of the company.

Ques: Legal of VN comp must be VNese. T/F?

→ False. Doesn’t matter where you come from, you just need to resign in VN.
Ques: Every comp allows to have 1 legal representative only. T/F?
→ False. Just for LLC and Shareholding company, legal representative can be more than 1.
Ques: The director of LLC must be the legal representative of such company. T/F?
→ False. The Director or Chairman can be the legal representative.

- Members’ Council (Art 55 - LOE)

+ Position: highest decision-making body; comprise all members
+ Members’ council meeting (Art 57)
+ Rights and obligation (Art 55.2)
Ques: Why does the shake always want 36% of charter capital from the start-up but not
another number?
→ Based on Art 59.3a (when holding the meeting in person), if you have more than 65% you
can control the company. Because when the shake holds 36%, the remain is 64% and you can
not control the company and the shake still has some influence on the decision.

- Chairperson
+ Shall be elected by the MC
+ May concurrently act as the director of the company;
+ The term of office: =< 5 years

Ques: Can a person (out of the company) be hired to become the Chairperson of a company?
→ False. Chairperson shall be elected by the MC, so must be a person of the company.
- Director / General
+ Manage the day-to-day business operation of the company;
+ May concurrently act as the Chairperson of the company;
+ May be the legal representative;

Ques: Director sign all the contract. T/F?

→ Based on Art 55.2 - LOE), for the contract valued at >=50% of charter capital of the
company (e.g: loan contract), it needed to be approved by MC, so the Director cannot sign
every contract.

Ques: Can you (FTUer) be the director of a LLC?

→ Based on Art 64.2, cannot, we don’t have enough professional qualifications and
experience (e.g: bachelor degree).

Ques: Can Mr.TTTam become the director of FTU?

→ Cannot. Based on Art 64.1 - 17.2b - LOE, Mr.TTTam is a State employee (viên chức), so
he cannot be the director, do not have the right to manage enterprises.
How about becoming the Vice director?
chưa tloi nữa =)))
 1) Hai will receive the profit in the proportion to his contributed capital (500 mil). (But if
there is a debt, Hai will be responsible with his committed capital amount).
2) It is legal, because it can be converted into VND. (Art 34)
Thanh doesn’t have to contribute full of the rest. Become the company assets instead
of individual assets. Profit will be distributed as the contributed assets, Thanh still
receive base on assets contributed, which is 24%
3) Art 36.2 - LOE, in case a contributed asset is valued at a value higher than its actual
value at contribution time (overvalued), the members/partners/founding shareholders
shall jointly contribute an amount equal to the difference and are jointly responsible
for the damage caused by the overvaluation.

2.2) Single LLC - Limited Liability Company with 1 member:

i) Characteristics:

ii) Finance:
 iii) Management structure:

2.3) JSC - Joint-stock Company:

i) Characteristics:
- Member: 3 < members < unlimited;
- A shareholder’s liability for the company’s debts and liabilities is equal to the amount of
capital contributed to the company by the shareholder;
- A joint stock company has the status of a juridical person from the day on which the
Certificate of Enterprise Registration is issued.
- A joint stock company may issue shares, bonds and other kinds of securities

ii) Shares:
- There are 2 types: Ordinary (mandatory) & Preference (optional);
- Shares can be freely transferred, except: restriction stipulated in the charter, voting
preference share and ordinary share of founding shareholders within 3 years.

Types Voting Cty phá sản: Transfer

1. Redeemable
2. Dividend
3. Voting + ordinary
+ other types

Ordinary 1 Cty phá sản thì được Allowed to transfer their shares to
shares nhận một phần tài sản other persons expect for the cases
còn lại tương ứng với specified in Art 120.3 & Art 127.1
cố phần sở hữu của
mình

Ordinary 1 Within 3 years from ERC, founding

shares holding shareholders có thể chuyển nhượng
by founding cho nhau. Nếu muốn chuyển cho
shareholders người ko phải founding shareholders
thì phải được accepted by General
Meeting Shareholders (GMS). Trong
TH này thì người chuyển nhượng ko
có quyền biểu quyết.

Voting - Number of vote được quy - Not transfer these shares to other
preference định trong charter; persons unless it is demanded by an
shares - Hiệu lực voting preference effective court judgment or transferred
của founding shareholders có in accordance with inheritance laws.
 hiệu lực trong vòng 3 năm và
hiệu lực của các tổ chức được
ủy quyền bởi nhà nước sẽ được
quy định trong charter. Trong
tgian này, preference =
ordinary.

Dividend No voting right Khi cty phá sản, sau

preference khi trả hết nợ và
share redeemable
preference share thì
dividend share sẽ
được nhận phần còn
lại tương ứng.

Redeemable No voting right Khi cty phá sản thì Allowed to transfer their shares to
preference được nhận 1 phần tài other persons expect for the cases
share sản còn lại tương ứng specified in Art 120.3 & Art 127.1
với cổ phần sở hữu
của mình.

iii) Management structure (Art 137):

- Legal representative:
+ If comp has only 1 legal representative: President of BM or Director/GD;
+ If comp has more than 1 legal representative: President of BM and Director/GD;

- General meeting of shareholders (Đại hội đồng cổ đông_họp thường kỳ) (Art 138-152):
+ Board of Directors shall convene annual and ad hoc GMS (bất thường);
+ Nếu BOD fail to convene (triệu tập/tổ chức) such GMS → Board of Controllers
convene → BOC fail → shareholders/group of shareholders convene;
 + Shareholders or representative of shareholders can participate directly or authorize (ủy
quyền) 1/some other individuals/organizations to participate in the GMS
(authorization of participants in GD shall be made in writing);

- Board of Management = Board of Director (Hội đồng quản trị):

3. FORM OF CREDIT INSTITUTION - LoCI:

3.2) Joint-stock Credit Institution:

i) Characteristics:

- Member:
trên bảng so sánh á
- Member liability:
- Ability to issue shares:

- Legal entity status:

- Transfer of shares:
Shares can be freely transferred, except for 3 cases:
+ Depend on company charter (điều lệ);
+ Voting preference shares (cổ phần ưu đãi biểu quyết) not allowed to transfer;
+ Ordinary shares (cổ phần phổ thông) of founding shareholders within 3 years from the
date of issuance of ERC must be accepted by the General meeting of shareholder.
(General meeting of shareholder: Đại hội đồng cổ đông)

LLC, shares have to be transferred to the mem first, then non-mem of the company.

JSC, shares are freely transferred.

Ques:

→ True. Additional shares, it is not limited, it doesn’t need to be accepted by GMS (chỉ bị
hạn chế với phần mua lúc thành lập, còn nếu mình mua phần addition thì mình ko bị hạn chế
chuyển nhượng, ko cần đc approve bởi GMS)

ii) Types of shares:

- Ordinary shares:

+ Owner: individual/organization
 + Transfer: freely transfer except case in Art 120.3, 127.2

- Preference shares:

+ Voting preference shares

Ques: A voting preference shareholder carries more votes than an ordinary one?
Ex:100 ordinary shares, 10 preference shares
→ If the quantity of vote is 10, the voting is equal.

● Owners: founding shareholders + organizations authorized by the gov (Art 116.1)

* Founding shareholders: valid for 3 years + converted into ordinary ones;
* Organisations authorised: Unlimited;

Ques: Why is there a restriction of 3 years for founding shareholders?

→ The law of restriction of 3 years is enough to make the company develop and be
stable. But after 3 years, they have to go with the flow.

Ques: Why is there no restriction for organization authorised?

→ Protect the state-owned company, bcs the law is created to protect the rights of the
ruling class.

E.g: A, B, C each have 10 OS and 10 VPS. In the charter: 1 VPS = 10 votes → Each
has 40 votes & total shares at this time is 120 shares. But after 1 year of operation, the
company issues more shares, which is 300 shares and D buys all of that newly issued
shares.

D becomes a new member of the company, the right to make the decision belongs to
D. Solution: ABC accumulate the VPS to make 1 VPS = 20 votes and ABC have 330
shares BUT they just can do so in the first 3 years only.

The law of restriction of 3 years is enough to make the company develop and be
stable. But after 3 years, they have to go with the flow.

● Restrictions: non-transferable;

+ Dividend preference shares

● Preference: paid at a rate higher than that paid for an ordinary stock or at an annual
fixed rate;
 ● Restriction: have no rights to vote, attend the GMS, nominate candidates to the board
of management, controlling board.

+ Redeemable preference shares

● Preference: shall be redeemed by the company;

● Restriction: have no rights to vote, attend the GMS, nominate candidates to the
board of management, controlling board.

+ Remark: an additional preference for dividend and redeemable preference shares

(Art 117.2.b)

Upon dissolution of bankruptcy of the company:

1. Redeemable preference shares;
2. Dividend preference shares;
3. Voting preference shares + Ordinary shares + other types of shares.
(When bankruptcy: RPS and DPV can receive the money first)

iii) Management structure:

General meeting of shareholder: Đại hội đồng cổ đông

Board of Management (BM): Ban quản lý (cấp cao như CEO, COO …)

Ex:
A đang làm việc tại company thì not eligible to become the independent member;
B < 1% still eligible;
C, based on Law on security regarding major shareholder states that C own 5% of total vote
of company → not eligible;
D not listed in Art 155.2, not eligible;
E is mem of BM. Based on Art 4.24, a member of BM is one of the managers of the company.
And based on Art 155.2c, E is sister of the major shareholder, so E is not eligible to become
the independent mem.

- Board of management:

Ex:

Dismiss H: 3/2 objections → H is General director;

Appoint G: 2/2 support → G is General director;
→ The company has only one GD is H: H still is the GD of the company, so we do not
consider whether G will become the GD or not.
 Ques: The difference between Director of LLC and JSC?
Art 162.5 - LOE: Condition to become JSC director:
- No need to satisfy (only public/stated-owned company need to satisfy qualification
in Art 162.5)
Art 64 - LOE: Condition to become LLC director
- Need to have professional qualifications & experience and must not have a family
relationship with

Ques: Can a person at the same time be the Director of 2 different companies?

No restriction in the Law, he/she can be the director of 2 different companies.

Enterprises Member Member Liability Ability to issue

share

Single LLC - Organization - The company owner is liable for all debts - Cannot issue
or individual; and other property obligations of the share except when
- 2-50 company to the extent of the amount of the it converts to
members. charter capital of the company. become a
shareholding
Multi LLC - Organization - Members are liable for the debts and other company;
or individual; property obligations of the enterprise to the - Can issue bond.
- 1 member. extent of the amount of capital contributed
to the enterprise, except for the case
stipulated in article 47.4.

JSC - Organization - Shareholders are liable for the debts and - Can issue every
Shareholding or individual; other property obligations of the enterprise types of security.
- 3<members< to the extent of the amount of capital
unlimited contributed to the enterprise
 The difference between Joint-stock company & Joint-stock credit institution

Joint-stock company (LoE) Joint-stock credit institution (LoCI)

Member - Organization or individual; over 100 mem, regulated by state bank

- 3 < members < unlimited;

Member Liability - Shareholders are liable for the debts and

other property obligations of the enterprise
to the extent of the amount of capital
contributed to the enterprise;
- Shareholders may freely assign their
shares to other persons, except in the cases:
+ Art 120.3, within a period of three years
from the date of issuance of the ERC to the
company, ordinary shares of a founding
shareholder may be freely assigned to
other founding shareholders, and shall only
be assigned to persons not being founding
shareholders upon approval of the General
Meeting of Shareholders (do not apply for
additional shares which founding
shareholders have after registration of
establishment or shares which have been
assigned to others not being founding
shareholders);
+ Art 127.1

Ability to issue - Can issue every types of security.

share

Type of shares

Art 52 - LOE: Joint-stock credit institution

Art 55: not more than 5% of charter capital of company, not more than 50% of credit
institution.
Ques: The difference between Multi-member LLC & Multi-member LL Credit institution?

Multi-member LLC Multi-member LL Credit

institution

Member 2-50 members 2-5

Ratio of ownership not more than 50% of

capital

Transfer

Art 70-72: LLC credit institution

Ques: The difference between Single-member LLC & Single-member LL Credit institution?

Single-member LLC Single-member LL Credit

institution

Member To make decisions on the

number of members of the
members' council for each
term of office,
but the minimum shall be
five (5) members and the
maximum shall be eleven
(11) members;
(Art 66.1a - LOCI)

The Members’ Council shall

 consist of three (3) to seven
(7) members.
(Art 80 - LOE)

Ratio of ownership

Transfer

Art 70-72: LLC credit institution

JS Commercial bank

Ques: Decide if the following persons could act as the director/general director of a joint
stock commercial bank: (Art 33, 34, 50 - LOE)
1. Mr A whose brother is the chairman of the board of management of such bank.
→ Cannot. Based on Art 33.1g - LoCI, Mr.A is a related person of the chairman of the BM,
so A is not allowed.
2. Mrs B who is currently acting as the director of company X.
→ Cannot. Based on Art 34.4 - LoCI, Mrs B is the GD of com X - which is an equivalent
position of another enterprise, so B is not allowed.
3. Mr C who has been working in the accounting department of KPMG for 12 years.
→ Can. Based on Art 50.4d (last condition) - LoCI, C works 12 years, more than the
condition at least 10 years, so C is allowed.
4. Ms D who used to be the deputy-director of a commercial bank for 3 years and is currently
doing her PhD in Melbourne.
→ Cannot. Based on Art 50.4d-e - LoCI, D works 3 years, less than the condition at least 5
years, also at this time D doesn’t reside in Vietnam, so D is not allowed.

LEGAL REPRESENTATIVE (Art 12)

True/False statement
• A shareholding credit institution may have more than one legal representatives.
→ False. Just give the option to choose ONE legal representative only.
• The legal representative of a joint stock commercial bank could be any shareholders of such
bank.
→ False. it cannot be any member of the company, just the chairman or director.
• The legal representative of a commercial bank must be the director (or general director) of
such bank.
→ False. the chairman of BM or Member’s council can also be the LR.

4. OPERATION OF CREDIT INSTITUTION:

4.1) Capital mobilization:

Ques: Why is capital mobilization the most important activities in operation of CI? How can
the bank mobilize the capital?
→ Borrow to lend, generate most of the profit for the bank.
→ How - 3 ways: Deposit taking, issue valuable papers, borrowings

i) Deposit taking:

- Deposit insurance:
Ques: All banks are required to buy deposit insurance. T/F?

False. not applicable for all the banks, policy banks are not required to buy.

- Insured deposit: Insured deposits shall be deposits in VietnamDong

Ques: Why not other foreign currency but have to be VND?
→ Out of policy, if the deposits is all in foreign currency, then the interest rate for VND is
zero, VN cannot encourage VNese people to have saving in VND

- Insurance money:
If the money that we deposit in the bank is beyond 125mil VND, when the bank goes
bankruptcy, the maximum insurance money that we can receive is 125mil VND.

ii) Borrowing:

iii) Deposit insurance - law on deposit insurance 2012:

4.2) Credit extension:

i) Lending:

- Principles of lending:

+ Using the borrowed funds for the purpose as agreed in the credit contract;
+ Repayment of the principals and interests on due dates as agreed in the credit contract;
+ Principle of risk diversification.
● Cases which are prohibited from credit extension: Art 126 - LOCI
● Limit on credit institution: Art 127
● Limit on the credit extension: Art 128
- Commercial bank, foreign bank branch, people’s credit fund or microfinance
institution:
+ 15% of its own capital
+ 25% of its own capital ( including affiliated persons)

- Non-bank credit institution:

+ 25% of its own capital
+ 50% of its own capital (including affiliated persons)

Ques: Determine if Mr A is permitted to borrow money from bank B: (Art 126)

1. A’s brother is the chairman of Management’s Board of Bank B.
→ Can. Based on Art 126.1b, only mention parents, spouse or child, not siblings.
2. A is the vice director of Bank B.
→ Can. Based on Art 126.1a, not mention vice director.
3. A’s son is a member of the Board of Controllers of Bank B.
→ Cannot. Based on Art 126.1b, child cannot.
4. A is the shareholder holding 15% of the voting share capital of Bank B.
→ Can. Because there is no restriction to the case in Art 126.

Option 1: Art 126.3: A credit institution or foreign bank branch is not permitted to
extend credit to clients on the basis of security provided by any of the subjects
specified in clause 1 of this article. And, TYPN is deputy Director of ABC (Art
126.1.a). So, it is illegal.
Option 2: Based on Art 126,127,128 - LOCI, legal (Art 126 is when providing loan
without any securities) but this case has the land as securities, so it does not violate
Art 127c.

1) Based on Art 126.3, B is not permitted to grant the loan to A.

2) Not, Art 126.5,
3) Not, Art 126.7,

- Distinguish:
+ Legal capital:
Ques: How much is required in the capital (Legal capital) to set up a
commercial bank in VN? → 3.000 bil VND. To set up a company, NO legal
capital is required, but in the finance sector maybe still required.

+ Own capital: comprises the actual value of a credit institution’s charter capital
or a foreign bank branch’s allocated capital, reserve funds and other certain
liabilities as stipulated by the State Bank of Vietnam.
Reserve funds: undistributed profit

+ Charter capital: all the capital contributed by all the members as it mentions
in the charter of the company.

When first established, a company has Equity = Charter capital, has no

reserves and liabilities. But after that Equity = Charter + Reserve.

+ Business capital: Business > Equity = Charter + Reserve

- Credit contract:

A credit contract is an agreement between credit institutions and customers to establish rights
and obligations, under which credit institutions lend an amount of money to the customers in
the principle of principal and interest repayment to be fully made.

- Conditions for loan:

Which condition is the most important to the bank? TỰ TRẢ LỜI

1) False
2) False, Art 23.1, cir39,
3) True, Art 23.1c, cir39,
4)

- Legal issues in security for loan:

Ques:

Distinguish between mortgage and pledge?

- Mortgage: (keep ownership document) transferring property is not needed;

- Pledge: transferring property is compulsory.

Distinguish between mortgage of third party’s assets and guarantee?

Distinguish between guarantee and fidelity guarantee?

Distinguish between Notarization and certification (Công chứng & chứng thực):

→ Công chứng là mún ktra tính hợp pháp của hợp đồng, xem có điều khoản gì cần ko … rồi
sau đó ngta mới chứng thực.

Credit contract có cần phải ở written form ko và có cần chứng thực ko?

→ Have to be in written form but no need to be notarized or certificated.

If we want to pledge/mortgage land use rights, where can we go for registration?

→ Sở tài nguyên môi trường và văn phòng đki đất đai (Land registration office). Art 297-308
- Civil Code,

→ First come first serve, apply for second registration, based on 308 to mạe a payment for
the first regis, which is bank B.

(1 tài sản khi được đki đảm bảo thì sẽ có trên hệ thống. Nếu đki giao dịch bảo đảm thì tsan
đang được thế chấp ở 1 nơi khác (do mình tra trên hệ thống thấy tsan đó đg đc thế chấp rồi)
thì nếu mình chấp nhận cho pledge hay mortgage tài sản đó thì khả năng nếu ng đó bị vỡ nợ
mình sẽ ko nhận được tiền, vì tsan đó đc đki ở đâu trc thì sẽ trả tiền cho nơi đó trc).

Art 343.1 Civil code, second transaction isn't relevant to Mr B (just first transaction).
PART 2: Law on THE STATE BANK OF VIETNAM
1. History:

2. Definition:

3. Features:
4. Function:

5. Structure of organizational management:

6. Operations of the state bank:

6.1) Implementation of the national monetary policy:

Definition:

i) Refinancing:

- Definition:

- Form of refinancing:

Valuable papers:

Discounting valuable papers:

ii) Interest rates (Art 12):

iii) Exchange rate:

iv) Required reserve:

v) Open-market operations:
6.2) Issuance of banknotes and coins:

6.3) Lending, guarantee and provision of advances for the state budget:

6.4) Payment and treasury operations:

6.5) Management of foreign exchange and foreign exchange operations:

6.6) Information and reporting: