At the 9th session, National Assembly XIV, Enterprise Law 2020 (Law 2020) was approved and will officially take effect on January 1, 2021. The following will be 6 new points specified in the first 3 chapters (Chapter I, Chapter II, Chapter III) of Law 2020, specifically the article will go into details as follows:
- Change of definitions of State enterprises:
According to Clause 11, Article 4 of Law 2020, definition: “11. State enterprises include enterprises where the State holds more than 50% of charter capital, the total number of voting shares as stipulated in Article 88 of this Law”.
The above provision replaces Clause 8, Article 4 of Law 2014: “8. State-owned enterprise is an enterprise in which the State holds 100% of charter capital. “
- Removing the regulation “Report of changing information of enterprise managers
Article 12 of Law 2014 stipulates: “The enterprise must report to the business registration office where it is headquartered within 05 days from the date of changing information about full name, name, contact address, nationality, citizen ID card number, people’s identity card, passport or other lawful personal identification of the following people: Members of the Board of Directors for joint stock companies; Member of Supervisory Board or Supervisor; Director or General Director.”
However, Law 2020 has repealed this provision.
- Change of regulations on registration Dossier for Limited Liability Companies, Joint Stock Companies:
There are two new points for the registration Dossier of Limited Liability Company, Joint Stock Company:
Firstly, according to the provisions of Article 21 and Article 22 of Law 2020, it supplement the provisions on legal papers of the legal representative in the registration dossier of the Limited Liability Companies, Joint Stock Companies.
Second, the new law uses the term “legal papers” instead of using the term “citizen identification card, identity card, passport or other legal personal identification”.
- Adding subjects not allowed to establish enterprises:
Points c, đ and g, Clause 2, Article 17 of Law 2020 adds 3 subjects who are not entitled to establish and manage enterprises in Vietnam:
c) Officers, non-commissioned officers, professional armymen, workers and defense officers in agencies and units of the Vietnam People’s Army; officers, non-commissioned officers, police workers in agencies and units of the People’s Police of Vietnam, except for those appointed to be authorized representatives to manage at State enterprises;
(d) People with difficulties in cognition and behavior control;
(g) Organizations that are legal entities prohibited from doing business or operating in certain fields as prescribed by the Criminal Code.
Previously, Clause 2 Article 18 of Law 2014 has not specified 3 above groups of subjects.
- Change of regulations on notification of seal specimen enterprises:
According to Article 44 of Law 2014:“Before using, enterprises are obliged to notify the seal specimen to the business registration agency for public posting on the National Business Registration Portal”.
However, the above provision has been abolished by Article 43 Law 2020.
- Amending and supplementing the regulations on handling of contributed capital in some special cases
Article 53 Law 2020 amends and supplements a number of provisions in Article 54 regarding the handling of contributed capital in some special cases, specifically as follows: there are 3 new points:
Firstly, in case a member has limited or lost civil act capacity, has difficulty in cognition and behavior control, the rights and obligations of that member in the company are exercised through a representative. Currently, done through guardians. (Clause 3 Article 53 Law 2020 replaces Clause 2 Article 54 Law 2014).
Second, adding regulations: “8. In case a member of a company is an individual held in detention, serving a prison sentence, or executing an administrative handling measure at a compulsory detoxification establishment or compulsory education establishment, such member shall authorize others perform some or all of their rights and obligations at the company. ” (Clause 8 Article 53 Law 2020).
Third, add regulations: “9. In case a member of a company is an individual banned from practicing certain jobs or works by a court or a member of the company being a commercial legal entity is banned from doing business or operating in certain fields under the law. If such member does not practice or do prohibited work at that company or the company suspends or terminates the relevant business line according to a court decision”. (Clause 9, Article 53 of Law 2020).
Above are 6 new points specified in the first 3 chapters (Chapter I, Chapter II, Chapter III) of Law 2020, these regulations will be valid when Law 2020 takes effect (from January 1, 2020).
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