At the 9th session, National Assembly XIV, Enterprise Law 2020 (Law) was approved and will officially take effect on January 1, 2021. The following will be 5 new points specified in the last 4 chapters (Chapter VII, Chapter VIII, Chapter IX, Chapter X) of LAW 2020, specifically the article will go into details as follows:

1. Shorten the period of notice before suspending business from 2021:
   Clause 1, Article 200 of Law 2014 stipulates: Enterprises have the right to suspend their business but must notify in writing the time and duration of suspending or resuming business to the Business Registration Authority at least 15 days before the date suspending or resuming business. This provision applies in case the enterprise resumes its business before the notified time limit.
   However, Clause 1, Article 206 of Law 2020 shortened the period of notice before suspending business. Specifically: “Enterprises must notify in writing to the Business Registration Agencies no later than 03 working days before the date of suspending or resuming business before the notified time”.
   Thus, the period of notice before suspending business is shortened from 15 days to 03 working days at the latest.
2. Provisions on exclusion of the case of dissolution due to revocation of enterprise registration certificate
   Point d, Clause 1, Article 207 of Law 2020 stipulates: “Enterprises are dissolved in case of revocation of their enterprise registration certificates, unless otherwise prescribed by the Law on Tax Administration.”
   This provision ensures consistency with the provisions of the Law on Tax Administration. At Point g, Clause 1 and Clause 2, Article 125 of the Law on Tax Administration 2019 provides:
   “Article 125. Coercive measures to enforce administrative decisions on tax administration
   1. Measures of enforcing administrative decisions on tax administration include:
   …
   g) Revoke the enterprise registration certificates
   2. The measures of enforcing administrative decisions on tax administration specified in Clause 1 of this Article cease to be effective after the tax debt is fully paid into the state budget. “
3. Sole Proprietorship can be converted into Limited Liability Company, Joint Stock Company, Partnership Company
   According to Article 205 of Law 2020, a Sole proprietorship may be converted into a Limited Liability Company, a Joint Stock Company or a Partnership Company under the decision of the owner of the Sole proprietorship if all of the following conditions are satisfied:
   – The converted enterprise must fully meet the conditions prescribed in Clause 1, Article 27 of this Law;
   – Owner of a Sole Proprietorship undertakes in writing to take personal responsibility with all of his assets for all unpaid debts and commit to pay all debts when due;
   – The owner of a Sole Proprietorship has a written agreement with the parties of the unliquidated contract that the converted company will accept and continue to perform those contracts;
   – The owner of a Sole Proprietorship makes a written commitment or has a written agreement with other capital-contributing members on the admission and employment of the existing labor force of a Sole Proprietorship.
   Currently, Law 2014 only regulates cases where a Sole Proprietorship is transformed into a Limited Liability Company.
4. Adding a case of termination of partnership membership
   According to Clause 1, Article 185 of Law 2020, general partners are terminated in the following cases:
   – Voluntarily withdraw capital from the company;
   – Death, disappearance, restriction or loss of civil act capacity, difficulty in cognition and behavior control;
   – Being expelled from the company;
   – Abiding by imprisonment or banned by a court from practicing certain jobs or doing certain jobs according to the provisions of law;
   – Other cases prescribed by the company’s charter.
   Compared with Law 2014, more cases of “having difficulty in cognition, behavior control” and ” Abiding by imprisonment or banned by a court from practicing certain jobs or doing certain jobs according to the provisions of law”.
5. Supplementing the provision “exercising the rights of owners of a Sole Proprietorship in some special cases”
   Compared with the current regulations, Article 193 of Law 2020, supplementing the provisions of “exercising the rights of owners of a Sole Proprietorship in some special cases” is as follows:
   – If the owner of a Sole Proprietorship is detained, serving a prison sentence, or executing an administrative handling measure at a compulsory detoxification establishment or a compulsory education establishment, he / she may authorize another person to do his/her rights and obligations.
   – In case the owner of a Sole Proprietorship dies, the heir or one of the heirs according to the will or the law is the owner of the Sole Proprietorship under the agreement between the heirs. Where the heirs cannot reach agreement, they will register for conversion into a company or dissolution of the Sole Proprietorship.
   – In case the owner of a Sole Proprietorship dies without an heir, the heir disclaims the inheritance or is deprived of the right to inherit, the property of the owner of the Sole Proprietorship shall be handled in accordance with the civil law.
   – In case the owner of a Sole Proprietorship is restricted or loses his/her civil act capacity, has difficulties in cognition and behavior control, the rights and obligations of the owner of the Sole Proprietorship are exercised through his/her representative.

Above are 5 new points specified in the last 4 chapters (Chapter VII, Chapter VIII, Chapter IX, Chapter X), these regulations will be valid when Law 2020 takes effect (from January 1, 2020).

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