BUSINESS ESTABLISHMENT,

REGISTRATION & RE-ORGANIZATION

LOE 2014
Outline
1. Business Establishment
2. Business Registration
3. Business Re-organization
BUSINESS ESTABLISHMENT
 Rights & Obligation of enterprises
• Art.7 (LOE 2014): Rights
• Freely conduct businesses that are not prohibited by the law
• Freely choose the form of enterprise, sectors, locations, scope and lines of business
• To recruit employees according to business requirements
• To participate in legal proceedings in accordance with the law
• Etc.

• Art.8 (LOE 2014): Obligations

• Fully meet required conditions when conducting in sectors subject to business investment
condition prescribed by the law
• Prepare & timely submit truthful & accurate financial statements
• Declare & pay taxes & perform other financial obligations as set by the law
• Ensure legitimate rights & interests of employees
• Be responsible for the quality of the provided goods & services
• Comply with laws on national defense, security, social order & safety, gender equity, protection of
natural resources & environment, etc.
Rights to establish enterprises
• Art.18 (LOE 2014): all individuals/organizations EXCEPT:

• State agencies/units of People’s armed forces USING STATE CAPITAL for

MAKING THEIR OWN PROFITS

• State officials/public servants, etc. (regulated in separated laws)

• < 18 years of age or those with RESTRICTED/LOSS of CIVIL ACT CAPACITY

• Others
Rights to establish enterprises?
Signing contracts BEFORE establishment
• Art.19 (LOE 2014)

1. Enterprise’s founders are ALLOWED to sign contracts that serve for the
establishment and activities of the enterprise BEFORE & DURING the
process of establishing the enterprise

2. If the enterprise is established, it shall continue to exercise the rights &

obligations arising from those signed contracts

3. If the enterprise is NOT established, the person who SIGNED the contracts
must be LIABLE for performing those contracts OR the enterprise’s
founder(s) must be JOINTLY LIABLE
Dossiers (documents) required for
establishing enterprises
• Art.20 (LOE 2014): dossiers required for Private Enterprise

• Art.21 (LOE 2014): dossiers required for Partnership

• Art.22 (LOE 2014): dossiers required for LLC

• Art.23 (LOE 2014): dossiers required for Shareholding company

Company Charter – Art.25 (LOE 2014)
• Name, head office address
• Business line(s)
• Charter capital, total number of shares, types of shares
• Rights & obligations of members
• Management & organizational structure
• Procedures for adoption of company decisions, principles for
settlement of internal disputes
• Principles for distributing of after-tax profits & handling of losses
• Etc.
BUSINESS REGISTRATION
Procedures – Art.27 (LOE 2014)
Submitting
required business
registration dossier

Competent
Business Written
Registration Result
3 days
Office
Conditions for granting Business
Registration Certificate – Art.28 (LOE 2014)
• Its business line(s) are NOT prohibited

• Its name complies with Art.38, 39, 40, 42 of this Law

• It has VALID enterprise registration dossier

• It has PAID in full registration fee

Announcement of registration

Art.33 (LOE 2014):

WITHIN 30 DAYS

• Publicly announce the

registration on the
National Enterprise
Registration Portal in
accordance to
instructions & pay the
charge as prescribed.
Providing Registration contents
• Art.34 (LOE 2014): WITHIN 5 DAYS

People’s
Committees at
Competent district &
Tax office state agencies commune/ward
levels
Name of the Enterprise
• Art.38 (LOE 2014): Full name = Business form + name
• E.g.:
Name of the Enterprise
• Art.39 (LOE 2014): Prohibition in naming the enterprise

• Using names that are identical/confusingly similar to name of registered enterprises

• Using names of state agency, people’s armed force units, political/social-cultural
organizations, etc. as whole/part of enterprise name – Unless it is consented by such
agency
• Using words/phrases/symbols that contravene national historic traditions, culture,
ethics & fine customs

• Art. 42 (LOE 2014): Names that are IDENTICAL & CAUSING CONFUSE
* written similarly/ read similarly/ abbreviated names
Name of the Enterprise
 BUSINESS RE-ORGANIZATION
[ Division; Separation; Consolidation; Merger ]
Dividing the enterprise – Art.192

A Corporation

ABC Corporation
(LLC/Shareholding)
B Corporation

C Corporation
Separating the enterprise – Art.193

ABC Corporation
(LLC/Shareholding)

C Corporation
Consolidating the enterprise – Art.194

A Corporation

AB
Corporation

B Corporation
Merge the enterprise – Art. 195
Dissolution & Bankruptcy of Enterprise

• Art.201 (LOE 2014): Cases & Conditions for Dissolution of enterprise

• Art.202 (LOE 2014): Procedures for dissolution of enterprise

Order of paying debts BEFORE the company can be dissolved:

1. Owed salaries, severance allowance, social insurance as provided by law &

other benefits agreed (based on signed collective labour
agreements/contracts) to employees
2. Tax debts and other debts
Dissolution & Bankruptcy of Enterprise

• Art.205 (LOE 2014): Prohibited activities AFTER dissolution

• Hiding/Dispersing assets
• Signing new contracts other than contracts to dissolve the company’s assets
• Pledging, mortgaging, donating or leasing company assets
• Terminating the performance of already effective contracts

• Bankruptcy: Art.207 (LOE 2014)

* Will be regulated in the ‘Bankruptcy Law 2014’
NEXT
• Group presentations

• Mid-term exam revision