Those who have the right to establish a business
Pursuant to the Enterprise Law 2020, the law stipulates who has the right to establish an enterprise and a number of other problems related to the establishment of a company or enterprise. When an individual or an organization establishes a business, what requirements must be met? Or who are the individuals who are not allowed to set up businesses? This article of TASCO will help customers answer the above questions
1. What is a business founder?
🔰 Pursuant to Clause 25, Article 4 of the Enterprise Law 2020, an enterprise founder is an individual or organization that establishes or contributes capital to establish an enterprise.
2. Who has the right to establish an enterprise:
🔰 Pursuant to Article 17 of the Enterprise Law 2020, all organizations and individuals have the right to establish and manage enterprises in Vietnam in accordance with this Law, except for the following cases:
✔ State agencies and units of the people's armed forces use state assets to establish profit-making businesses for their agencies and units;
✔ Cadres, civil servants, and public employees according to the provisions of the Law on Cadres and Civil servants and the Law on Public Employees;
✔ Officers, non-commissioned officers, professional soldiers, defense workers, and officers in agencies and units of the Vietnam People's Army; officers, professional non-commissioned officers, public security workers in agencies and units of the Vietnam People's Public Security, except for the person appointed as an authorized representative to manage the State's capital contribution in the enterprise or in the State enterprise;
✔ Professional leaders and managers in state-owned enterprises as prescribed at Point a, Clause 1, Article 88 of this Law, except for persons appointed as authorized representatives to manage the State's contributed capital in other enterprises.;
✔ Minors; persons with limited civil act capacity; persons who have lost their civil act capacity; people with difficulties in cognition and behavior control; organizations without legal status;
✔ Persons who are being examined for penal liability, are held in custody, are serving prison sentences, are serving administrative handling measures at compulsory detoxification establishments, compulsory education establishments, or are banned by the Court from holding certain posts, practicing certain professions or doing certain jobs; other cases as prescribed by the Law on Bankruptcy and the Law on Anti-corruption.
At the request of the business registration authority, the enterprise establishment registrant must submit a judicial record card to the business registration authority;
✔ Organizations that are commercial legal entities are prohibited from doing business or operating in certain fields according to the provisions of the Penal Code.
3. Persons with the right to contribute capital, purchase shares, or purchase capital contributions:
🔅 Pursuant to Article 17 of the Enterprise Law 2020, all organizations and individuals have the right to contribute capital, purchase shares, or purchase capital contributions to joint-stock companies, limited liability companies, and partnerships, except for the following cases: the following case:
◾ State agencies and units of the people's armed forces use state assets to contribute capital to enterprises for their own profit;
◾ Subjects are not allowed to contribute to business agencies according to the provisions of the Law on Cadres and Civil Servants, the Law on Public Employees, and the Law on Anti-corruption.
4. Individuals can set up a business:
⏩ For individuals who establish a company:
➤ Pursuant to Article 17 of the Enterprise Law 2020, it can be understood that every individual who is a Vietnamese or a foreigner regardless of nationality and place of residence, if not subject to the prohibition specified in Clause 2, Article 17, has the right to establish a business.
➤ Each individual is only entitled to establish only one private enterprise, establish only one business household, or become a general partner of only one partnership.
➤ The owner of a private enterprise or the owner of a business household or a general partner of a partnership is an individual who still has the right to establish or contribute capital to many limited liability companies or joint stock companies.
➤ If a foreigner establishes a company in Vietnam for the first time, he/she must carry out investment registration procedures in accordance with the investment law in order to establish a company. At that time, the company established by a foreign individual will be granted an Investment Registration Certificate in accordance with the provisions of the Investment Law.
⏩ For the entity establishing the company:
➤ A foreign organization that establishes a company in Vietnam for the first time must carry out investment registration procedures in accordance with the investment law in order to establish a company. At that time, the company established by this foreign organization will be granted an Investment Registration Certificate in accordance with the provisions of the Investment Law.
➤ A foreign-invested enterprise already established in Vietnam that intends to establish a new company in Vietnam shall comply with the following provisions:
➥ In case a company is intended to be established because an enterprise with more than 49% of its charter capital owned by an investor being a foreign individual or organization established or participated, it must have an investment project and make investment registration in accordance with the law on investment in order to establish a company. At that time, the newly established company will be granted an Investment Registration Certificate in accordance with the provisions of the investment law.
➥ In case the company is intended to be established because the enterprise has not more than 49% of charter capital owned by the investor being a foreign individual or organization, established or participating, the establishment of the business Enterprises shall comply with the provisions of the Enterprise Law 2020 and are not required to comply with the provisions of the investment law. In this case, the investment project is subject to the same regulations applicable to domestic investment projects.
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