Providing detailed guidelines for implementation of a number of articles of the law on enterprise

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



i
DECREE 102-2010-ND-CP
PROVIDING DETAILED GUIDELINES FOR
IMPLEMENTATION
OF A NUMBER OF ARTICLES OF THE LAW ON ENTERP
RISES


TABLE OF CONTENTS

Article 1
Governing scope 1
Article 2 Applicable entities 1
Article 3 Applicability of the Law on Enterprises, international treaties and relevant laws 2
Article 4 Party and mass organizations within an enterprise 2
Article 5 Capital contribution using intellectual property rights 3
Article 6 Charter capital of company and number of shares which a shareholding company has
the right to issue 3

Article 7 Prohibited lines of business 3
Article 8 Conditional lines of business and business conditions 4
Article 9 Lines of business which require a practising certificate 5
Article 10 Lines of business which require legal capital 6
Article 11 Right to business registration and to carry out business activities 6
Article 12 Right to establish enterprises 7
Article 13 Right to contribute capital and to purchase shareholding 7

Article 14 Prohibition on State bodies and units of the people’s armed forces using State capital
and assets to contribute capital, purchase shareholding and establish enterprises in
order to earn private profit 8

Article 15 Supplementary guidelines on director (general director) and members of board of
management 9

Article 16 Authorization of legal representative of enterprise 10
Article 17 Establishment of branches and representative offices of enterprises with foreign owned
capital 11

Article 18 Implementation of a capital contribution in, and rights and obligations related to capital
contribution in a multiple member limited liability company 11

Article 19 Right of members to institute legal proceedings against chairman of members' council
and director (general director) 12

Article 20 Supplementary guidelines on a number of rights and obligations of members of a limited
liability company 13

Article 21 Signature of members or their representatives on minutes of meetings of members'
council 13

Article 22 Number of authorized representatives who may participate in members’ council or
attend general meeting of shareholders 13

Article 23 Founding shareholders 14
Article 24 Offer of shares for sale 15
Article 25 Right to institute legal proceedings against members of board of management and
director (general director) 16

Article 26 Some issues relating to general meeting of shareholders 17
Article 27 Effectiveness of resolutions and decisions of the general meeting of shareholders, of the
members’ council and of the board of management 17

Article 28 Disclosure of related persons and their transactions with company 17
Article 29 Method of cumulative voting 18
Article 30 Supplementary guidelines on meetings of board of management 19
Article 31 Conversion of a single member limited liability company into a multiple member limited
liability company 19

Article 32 Conversion of shareholding company or multiple member limited liability company into
single member limited liability company 20


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



ii
Article 33 Conversion of a limited liability company into a shareholding company 20
Article 34 Basic contents of an application for conversion 21
Article 35 Contents of an enterprise registration certificate or business registration items in an
investment certificate applicable to a case of conversion 21

Article 36 Conversion of a private enterprise into a limited liability company 22
Article 37 Joint venture enterprises and enterprises with 100% foreign owned capital which have
not re-registered pursuant to Decree 101: 23

Article 38 Supplementary guidelines on economic groups 23

Article 39 Supervision by business registration office of order and procedures for conducting
meetings of general meeting of shareholders and [for issuing] decisions of general
meeting of shareholders 23

Article 40 Dissolution of enterprises 25
Article 41 Termination of operation of branches 25
Article 42 Effectiveness 26
Article 43 Organization of implementation 26

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



1
GOVERNMENT SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
No. 102-2010-ND-CP
Ha Noi, 1 October 2010


DECREE
PROVIDING DETAILED GUIDELINES FOR IMPLEMENTATION
OF A NUMBER OF ARTICLES OF THE LAW ON ENTERPRISES

The Government

Pursuant to the La
w on Organization of the Government dated 25 December 2001;

Pursuant to the La

w on Enterprises dated 29 November 2005;

Having considered the proposal of the Minister of Planning and Investment;


Decrees:


Article 1 Governi
ng scope

This Decree provides detailed guidelines for impl
ementation of a number of articles of the Law on
Enterprises on establishment, managerial organization, operation, reorganization and dissolution of
enterprises.

Article 2 Applica
ble entities

This Decree shall apply to:

1. Limited liability companies, shareholding companies,
partnerships and private enterprises, including
limited liability companies [and]
1
shareholding companies after conversion from enterprises with
100% State owned capital, enterprises of Party organizations and of socio-political organizations,
and to joint venture enterprises and enterprises with 100% foreign owned capital (hereinafter all
referred to as enterprises).

2. Joint venture enterprises and
enterprises with 100% foreign owned capital which have not
re-registered pursuant to Decree 101-2006-ND-CP of the Government dated 21 September 2006 on
re-registration, conversion and re-registration for replacement with investment certificates by
enterprises with foreign owned capital pursuant to the Law on Enterprises and the Law on
Investment (hereinafter abbreviated to Decree 101).

3. Individual family household businesses.

4. Other organizations and individuals involved in the establi
shment, managerial organization and
operation, reorganization and dissolution of enterprises.




1
Allens Arthur Robinson footnote: Square brackets contain translator's comments only.

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



2
Article 3 Applicability of the Law on Enterprises, international treaties and relevant laws

1. The La
w on Enterprises shall apply to the establishment, managerial organization and operation of
enterprises, except for the cases stipulated in clauses 2 and 3 of this article.

2. In a case where an international treaty of which t
he Socialist Republic of Vietnam is a member
contains other provisions on application files, order, procedures, and conditions for establishment,
business registration, ownership structure and the right to autonomy in business, then the provisions
of such international treaty shall apply.

3. If there are differences between the provisions in the La
w on Enterprises and the following laws on
application files, order, procedures, and conditions for establishment and business registration; on
the structure of managerial organization, on authority of internal management bodies within an
enterprise, on the right to autonomy in business, and on restructuring and dissolution of enterprises,
then the provisions of these following laws shall apply:

(a) Law on Credit Institutions;

(b) Law on Petroleum;

(c) Law on Civil Aviation of Vietnam;

(d) Law on Publishing;

(dd) Law on Press;

(e) Law on Education;

(g) Law on Securities;

(h) Law on Insurance Business;

(i) Law on Lawyers;

(k) Law on Notarization;

(l) Any law amending one of the laws stipulated in this clause and any other special law
2
which
the National Assembly passes after this Decree takes effect.

Article 4 Party an
d mass organizations within an enterprise

1. Party and mass organizations within an enterprise shall ope
rate in accordance with the framework of
the Constitution, the law, and the organizational charters [of such organizations].

2. Enterprises shall respect and facilitate information and campaigns for establishment of Party and
mass
organizations within the enterprise, and the admission of employees at the enterprise into such
organizations.




2
Allens Arthur Robinson footnote: It is apparent from article 40.6 that an alternative translation here is "specialized branch law".

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com

3
3. Enterprises shall create favourable conditions regarding material facilities, time and other necessary
conditions in order for members of Party and mass organizations working at the enterprise to fully
implement the regime on everyday pursuits prescribed in the charters and internal rules of such
organizations.

Article 5 Capital
contribution using intellectual property rights

Intellectual property rights used for capital contribution shall
comprise rights of authors and related rights of
authors, industrial property rights, rights to plant varieties, and other intellectual property rights stipulated in
the law on intellectual property. Only individuals or organizations being owners of the aforesaid rights shall
have the right to use such assets for capital contribution. The Ministry of Finance shall provide guidelines
on valuation of capital contribution using intellectual property rights.

Article 6 Cha
rter capital of company and number of shares which a shareholding company has the right
to issue

1. The charter capital of a multiple mem
ber limited liability company
3
is the total aggregate value of
capital contribution portions which members have made or undertake to make within a specified
period and as stated in the company charter.

2. The charter capital of a single member limited liability
company is the total value of capital which the
owner has made or undertakes to make within a specified period and as stated in the company

charter.

3. The period within which members or the owner of the company must pay the full charter capital
unde
rtaken and as prescribed in clauses 1 and 2 of this article shall not exceed 36 months from the
date of issuance of the enterprise registration certificate or certificate registering an addition or
change of member.

4. The charter capital of a shareholding company is the
total par value of the number of issued shares.
The number of issued shares is the number of shares fully paid up to the company by shareholders.
The charter capital of a shareholding company on the date of registration of business [and]
establishment of the enterprise is the total par value of shares for which founding and other
shareholders have subscribed and as stated in the company charter; such number of shares must be
paid in full within 90 days from the date of issuance of the enterprise registration certificate.

5. The number of shares which a shareholding company has the right to issue is the number of shares
whi
ch the general meeting of shareholders decides to issue in order to raise additional capital. The
number of shares which a shareholding company has the right to issue on the date of business
registration is the total number of shares for which founding and other shareholders have subscribed
as at the date of business registration plus the number of additional shares which will be issued
within a period of three years from the date of issuance of the enterprise registration certificate and
as stated in the company charter.

Article 7 Prohibite
d lines of business

1. The list of prohibited lines of business shall comprise:

3
Allens Arthur Robinson footnote: Alternative translation is "limited liability company with two or more members" as used in our
translation of the Law on Enterprises.


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



4
(a) Business in weapons, military equipment and technical facilities, ammunition and specialized
facilities for the army and police; military paraphernalia (including badges, medals and insignia
of the army and police); military supplies for the armed forces; and components, accessories
and materials and technology used to manufacture the former items;

(b) Business in all types of drugs of addiction;

(c) Business in List I chemicals (stipulated i
n international treaties);

(d) Business in products of reactionary culture a
nd pornographic products; products serving
superstitious purposes or products harmful to aesthetic education and personal development;

(dd) Business in all types of firecrackers;

(e) Business in all types of games and toys dang

erous or harmful to the personal development
and health of children or to the security, order and safety of society;

(g) Business in all types of rare wild animals
and plants, including both living animals and
processed matter taken from animals, on the lists in international treaties of which Vietnam is a
member, and all types of rare wild animals and plants on the lists prohibiting the use and
exploitation of such animals and plants;

(h) Brothel businesses, organizing prostitution, trafficking in women and children;

(i) Business services being organized gambling or keeping a gambling house in any form;

(k) Business services being investigation [private d
etective] services into infringement of State
rights or the legitimate rights and interests of organizations and citizens;

(l) Business services being marriage broking involving a foreign element;

(m) Business services for foster parents or adoption involving a foreign element;

(n) Business in all types of imported scrap
causing environmental pollution;

(o) Business in all types of products, goods and equip
ment prohibited from circulation or use, or
not yet permitted to be circulated or used in Vietnam;

(p) Other lines of business prohibited by speciali
zed branch laws, ordinances and decrees.

2. Business in the lines stipulated in clause 1 above
in a number of specific cases shall be applicable
pursuant to the relevant specialized branch law, ordinance or decree.

Article 8 Con
ditional lines of business4 and business conditions

1. The provisions of specialized branch laws, ordin
ances and decrees or relevant decisions of the
Prime Minister of the Government (hereinafter all referred to as specialized branch laws) shall apply
to conditional lines of business and to the business conditions which are applicable.

2. Business conditions shall be expressed in the following forms:



4
Allens Arthur Robinson footnote: The literal translation is "Lines of business subject to conditions".

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



5

(a) Business licences;

(b) Certificates of satisfaction of business conditions;

(c) Practising certificates;

(d) Certificates of professio
nal indemnity insurance;

(dd) Certification of legal capital;

(e) Other approvals from com
petent State authorities;

(g) Other requirements which an enterprise must imple
ment or satisfy before it has the right to
conduct business in such line of business without the need for certification or approval in any
form from a competent State authority.

3. Provisions regarding conditional lines of business a
nd their business conditions in legal instruments
other than those mentioned in clause 1 of this article shall no longer be effective.

Article 9 Line
s of business which require a practising certificate

1. A practising certificate as refe
rred to in article 7.2 of the Law on Enterprises means a document
issued by a competent State authority of Vietnam or by an occupational-professional association to
which the State delegates authority to issue practising certificates, to individuals with the professional
qualifications and experience required for a certain industry or profession.

A practising certificate issued overseas shall not be e
ffective in Vietnam, unless a specialized branch

law or an international treaty of which Vietnam is a member contains a different provision.

2. Whether any one line of business req
uires a practising certificate and the conditions for issuing such
practising certificate shall be decided by application of the relevant specialized branch law.

3. Business registration or registration of an additio
nal line of business by an enterprise conducting
business in a line for which the law requires a practising certificate shall be conducted in accordance
with the following provisions:

(a) The director of the enterprise or head of the bu
siness establishment must have a practising
certificate if the enterprise conducts business in a line for which the law requires that the
director of the enterprise or head of the business establishment have such practising
certificate;

(b) The director of the enterprise and at least o
ne other specialized senior staff member as
stipulated by the relevant specialized branch law must have practising certificates if the
enterprise conducts business in a line for which the law requires the director and another
person to have practising certificates;

(c) At least one specialized senior staff member a
s stipulated by the relevant specialized branch
law must have a practising certificate if the enterprise conducts business in a line for which the
law does not require the director or head of the business establishment to have a practising
certificate.

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



6
Article 10 Lines of business which require legal capital

1. The provisions of specialized branch laws shall a
pply to lines of business requiring legal capital, to
the specific levels of such legal capital, to the State body with authority regarding legal capital, to the
body or organization authorized to certify legal capital, and to the application file, conditions and
method of certifying legal capital.

2. The chairman of the members’ council or company ch
airman and the director (general director) in the
case of a limited liability company; the chairman of the board of management and the director
(general director) in the case of a shareholding company; all partners in the case of a partnership;
and the owner in the case of a private enterprise shall be liable for the truthfulness and accuracy of
the amount certified as legal capital when establishing the enterprise. The enterprise shall be
responsible to ensure that the actual level of charter capital is no lower than the certified legal capital
during the entire process of the business operation of the enterprise.

3. In the case of business registration to establish
an enterprise conducting a line of business requiring
legal capital, the file for enterprise registration must contain certification from a competent body or
organization about such legal capital. The person directly certifying legal capital shall be jointly liable
for the accuracy and truthfulness of the amount of such capital as at the time of providing
certification.

4. In the case of an enterprise registering an additional
line of business requiring legal capital, it shall
not be necessary to have certification from a competent body or organization about such legal capital
if the equity recorded in the total list of assets of the enterprise on a date within three months prior to
the date of lodging the file is equal to or more than the stipulated level of legal capital.

Article 11 Right to bu
siness registration and to carry out business activities

1. Enterprises shall the right to take the initiative in conductin
g business registration and in conducting
business activities without applying for permission or approval from, and without seeking the opinion
of any State administrative body, if such line of business:

(a) Is not a prohibited line of business;

(b) Is not a conditional line of business pursuant to specialized branch law.

2. An enterprise shall have the right to conduct business in a conditional line of business as from the
time it satisfie
s all the stipulated conditions.

If an enterprise conducts business when it fails to satisfy all stipulated conditions, then the following
person
s shall be jointly liable before the law for such business: the chairman of the members’ council
or the company chairman and director (general director) in the case of a limited liability company; the
chairman of the board of management and director (general director) in the case of a shareholding
company; all partners in the case of a partnership; and the owner in the case of a private enterprise.

3. Investment and business conditions the same as those applicable to domestic investors shall apply

to an e
nterprise already established in Vietnam with foreign investor ownership not exceeding 49% of
the charter capital, unless an international treaty of which Vietnam is a member or a specialized
branch law contains some other provision.

4. Investment and business conditions the same as those applicable to foreign investors shall apply to
an ente
rprise already established in Vietnam with foreign investor ownership exceeding 49% of the
charter capital, unless an international treaty of which Vietnam is a member or a specialized branch

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



7
law contains some other provision.

5. The ownership ratios prescribed in clauses 3 and 4 of this article
shall apply throughout the entire
process of an enterprise implementing investment and business in the relevant sector.

Article 12 Right to esta
blish enterprises

1. All organizations being legal entities including enterp
rises with foreign owned capital in Vietnam
irrespective of the place of registration of their head office and all individuals irrespective of their
place of residence and nationality, so long as they are not in the categories stipulated in article 13.2
of the Law on Enterprises, shall have the right to establish and to participate in establishment of an
enterprise in Vietnam in accordance with the provisions of the Law on Enterprises.

2. Each individual shall only have the right to register th
e establishment of one private enterprise or one
individual family household business or to be a partner of one partnership, unless the remaining
partners have some other agreement. An individual owner of a private enterprise, an individual
household business or an individual partner of a partnership shall have the right to establish [or]
participate in establishment of a single member limited liability company, a multiple member limited
liability company [or] a shareholding company.

3. An investor being a foreign organization or individual e
stablishing for the first time an enterprise in
Vietnam shall conduct investment registration associated with establishment of an economic
organization in accordance with the law on investment. In this case the enterprise shall be issued
with an investment certificate which shall concurrently be the enterprise registration certificate.

4. An enterprise with foreign invested capital alrea
dy established in Vietnam which proposes to
establish a new enterprise in Vietnam shall implement the following provisions:

(a) If more than 49% of the charter capital of the e
nterprise proposed to be established will be
owned by the foreign investor/s establishing [or] participating in establishing it, then there must
be an investment project and registration of such investment associated with establishment of
an economic institution in accordance with the law on investment. In this case the enterprise
shall be issued with an investment certificate which shall concurrently be the enterprise
registration certificate.

(b) If foreign investor/s establishing [or] participating in
establishing the new enterprise will not
own more than 49% of its charter capital, then establishment of the enterprise shall be

implemented in accordance with the provisions of the Law on Enterprises. In this case the
same regulations which apply to domestic investment projects shall apply to registration of the
investment.

Article 13 Right to co
ntribute capital and to purchase shareholding

1. All organizations being legal entities including enterprise
s with foreign owned capital, irrespective of
the place of registration of their head office, and all individuals irrespective of their nationality and
place of residence, so long as they do not belong to the categories stipulated in article 13.4 of the
Law on Enterprises, shall have the right to contribute capital and to purchase shareholding at an
unrestricted level in an enterprise pursuant to the corresponding provision of the Law on Enterprises,
except for the following cases:

(a) The ownership ratio of foreign investors in listed companies shall be implemented in
acc
ordance with the law on securities;


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



8
(b) The laws specified in article 3.3 of this Decree and other relevant specialized branch laws shall
apply to the ownership ratio of foreign investors in special cases;

(c) The ownership ratio of foreigners in enterpri
ses with 100% State owned capital undergoing

equitization or converting their form by other methods shall be implemented in accordance with
the law on equitization and conversion of enterprises with 100% State owned capital;

(d) The ownership ratio of foreigners in enterprises engaged in services business shall be
impleme
nted in accordance with the Schedule of specific commitments on commercial
services (in the Appendix to the Decree on Vietnam's WTO accession).

2. Any foreign investor contributing capital to a limited l
iability company or receiving an assignment of
the capital contribution portion of a member or owner of the company shall implement the provisions
on capital contribution or assignment of capital contribution portion and shall register change of
membership in accordance with the corresponding provision of the Law on Enterprises and relevant
laws.

Registration of change of membership of a company which has been issued with an investment
certificate sh
all be conducted at the competent State administrative body for investment.

Registration of change of membership in other cases shall
be conducted at the business registration
office.

3. A foreign investor purchasing newly issued shares [or] re
ceiving an assignment of shares shall do so
in accordance with the provisions on purchase of shareholding [or] assignment of shareholding and
shall register as a shareholder or shall register a change of shareholder in accordance with the
corresponding provision of the Law on Enterprises and relevant laws.

There must also be registration of change of founding shareholder in accordance with the La

w on
Enterprises at the business registration office or competent State administrative body for investment
in a case of receipt of the shareholding capital portion [undertaken to be] contributed by a founding
shareholder as stipulated in article 84.3 of the Law on Enterprises, or receipt of an assignment of
shares of a founding shareholder as stipulated in article 84.5 of the Law on Enterprises.

Article 14 Prohibitio
n on State bodies and units of the people’s armed forces using State capital and
assets to contribute capital, purchase shareholding and establish enterprises in order to earn
private profit

1. It shall be strictly prohibited for any State body or u
nit of the people’s armed forces to use State
assets or public funds to establish an enterprise, or to contribute capital to or purchase shareholding
in an enterprise in order to earn private profit for one's own State body or unit.

2. State assets and public funds stipulate
d in this article comprise:

(a) Assets procured with State budg
et funds or with capital sourced from the State budget;

(b) Funding issued by the State budget;

(c) Land allocated for use in order to exercise function
s and discharge duties stipulated by law;

(d) Other assets and revenue created from the use of the
above-mentioned assets and funding;

(dd) Funding donated by foreign governments, organizations and individuals.

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



9

3. Private profit for one's own State body or unit mea
ns using revenue in any form which was earned
from business activities, from a capital contribution or from the purchase of shareholding, for at least
one of the following purposes:

(a) Distribution in any form to some or all senior official
s [and] staff of such State body or unit;

(b) Supplementing the operational budget of such State body or unit
contrary to the law on State
budget;

(c) Establishing or supplementing a fund which serves the private intere
sts of such State body or
unit.

Article 15 Supplem
entary guidelines on director (general director) and members of board of
management

1. The director (general director) of
a shareholding company or multiple member limited liability

company must satisfy the following criteria and conditions:

(a) Have full capacity for civil acts and not be prohibited from establishing and managing an
enterp
rise pursuant to article 13.2 of the Law on Enterprises;

(b) A shareholder being an individual must own at least five (5) per cent of the number of ordinary
sha
res (in the case of a shareholding company), or a member being an individual must own at
least ten (10) per cent of the charter capital (in the case of a limited liability company), or any
other person must have expert qualifications or actual experience in business management or
in the principal line of business of the company.

If the company charter stipulates different crite
ria and conditions from the above, then the
criteria and conditions stipulated in the company charter shall apply.

(c) In the case of a subsidiary of a company with a State own
ed capital contribution portion or
shareholding of more than 50% charter capital, then in addition to the criteria and conditions
stipulated in sub-clauses (a) and (b) above, the director (general director) of such subsidiary
may not be the spouse, parent or foster parent, child or adopted child, or sibling of a manager
of the parent company or of the representative of the State owned capital portion in the parent
company.

2. The director (general director) of a single member
limited liability company where such member is an
organization must satisfy the following criteria and conditions:

(a) Have full capacity for civil acts and not be prohibited from establishing and managing an

enterp
rise pursuant to article 13.2 of the Law on Enterprises;

(b) Have expert qualifications [or] actual experien
ce in business management or in the principal
line of business of the company, unless the company charter stipulates otherwise;

(c) If the company owner is a State body or an enterp
rise with more than 50% State ownership,
then in addition to the criteria and conditions stipulated in sub-clauses (a) and (b) above, the
director (general director) may not be the spouse, parent or foster parent, child or adopted
child, or sibling of the head or deputy head of the State body or of the representative of the
State owned capital portion in such company.


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



10
3. Members of the board of management of a shareholding company must satisfy the following criteria
and conditions:

(a) Have full capacity for civil acts and not be prohibited from establishing and managing an
enterp
rise pursuant to article 13.2 of the Law on Enterprises;

(b) A shareholder being an individual must own at least 5% of
the total ordinary shares or a
shareholder

5
must own at least 5% of the total shares, or a board member not being a
shareholder must have expert qualifications or experience in business management or in the
principal line of business of the company.

If the company charter stipulates different criteria an
d conditions from those in this clause, then
the criteria and conditions stipulated in the company charter shall apply.

4. Unless otherwise stipulated in the co
mpany charter, the chairman of the members’ council, the
company chairman, the chairman of the board of management and the director (general director) of
any one company may concurrently be the chairman of the members’ council, the company
chairman, the chairman of the board of management or the director (general director) of another
company, except that the director (general director) of a shareholding company may not concurrently
be the director (general director) of another company pursuant to article 116.2 of the Law on
Enterprises.

Article 16 Authori
zation of legal representative of enterprise

1. The legal representative of an enterp
rise must reside in Vietnam, and if he or she [will be] absent
from Vietnam for more than 30 days then he or she must provide written authorization to another
person ["the attorney"] to perform the rights and obligations of the legal representative of the
enterprise.

2. The following provisions shall apply if at the e
xpiry of the term of authorization the legal
representative of the enterprise has not returned to Vietnam and has not authorized another person:

(a) The attorney shall continue to exercise the right
s and discharge the obligations of the legal
representative of the private enterprise within the scope of such authorization until the legal
representative of the enterprise returns to work at the enterprise;

(b) The attorney shall continue to exercise the right
s and discharge the obligations of the legal
representative of a limited liability company, of a shareholding company or of a partnership
within the scope of the authorization until the legal representative of the enterprise returns to
work at the company or until the members' council, company owner, board of management or
members' council of the partnership makes a decision appointing another person to act as
legal representative of the enterprise.

3. In the case of absence from Vietnam for more tha
n thirty (30) days without authorization to another
person to exercise the rights and discharge the obligations of legal representative of the enterprise,
the members' council, the company owner, the board of management or the partners' council of the
partnership shall appoint another person to act as legal representative of the company.





5
Allens Arthur Robinson footnote: The reference here is presumably to a shareholder being an organization.


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com

11
Article 17 Establishment of branches and representative offices of enterprises with foreign owned capital

An enterprise with foreign owned capital established pursuant to the La
w on Investment and the Law on
Enterprises or which has registered conversion in accordance with law, shall have the right to establish a
branch/es [and/or] representative office/s outside its head office. The establishment of a branch need not
necessarily be associated with or be conducted simultaneously with conduct of investment procedures in
accordance with the law on investment. The file, order and procedures for registering the operation of a
branch or representative office shall be implemented in accordance with the corresponding provisions in the
Law on Enterprises, and the registration of the operation of a branch or representative office shall be
conducted at the competent State administrative body for investment.

Article 18 Im
plementation of a capital contribution in, and rights and obligations related to capital
contribution in a multiple member limited liability company

1. Members must contribute capital in full and on time in accordance with undertakings in the list of
membe
rs. If capital contribution is made on more than one occasion, then the time for the final
contribution by each member shall not exceed 36 months from the date the company was issued
with its enterprise registration certificate or certificate of registration of an additional member or
change of member; and on each occasion on which a member makes a capital contribution, such
member shall be issued with a certificate certifying the amount of capital paid on such occasion.

2. The legal representative of the com
pany shall, within 15 days after each capital contribution payment
tranche as undertaken, report to the business registration office on the result of progress in paying

capital contribution.

If the legal representative of the company fails to make the stip
ulated report, then the chairman of the
members' council or the director (general director) or the member owning the largest capital
contribution portion in the company shall have the right to make such report in the name of the
company.

3. Within the period in which capital as undertaken h
as not yet been contributed in full, a member shall
have the number of votes and shall be entitled to profit distribution corresponding to its ratio of paid
up capital, unless otherwise stipulated by the company charter.

4. After the deadline for making the final capital contribution, an
y member failing to pay its capital
contribution in full to the company as undertaken shall automatically cease to be a member of the
company and shall not have the right to assign such capital contribution to another person; and the
unpaid amount of capital shall be dealt with in accordance with clause 5 of this article.

5. The unpaid amount of capital shall be dealt with in a
ccordance with the following priority order, within
90 days from the deadline for the final capital contribution tranche:

(a) The remaining members shall contribute a part or a
ll of the unpaid amount in proportion to
their ratios of paid-up capital to the company;

(b) One or several members shall contribute the unpaid amount in full; or

(c) Capital shall be raised from other people for payment

of the unpaid amount in full.

6. The legal representative of the comp
any must report the result of progress in paying capital
contributions and register change of membership of the company within 15 days from the expiry of
the 90 day period stipulated in clause 5 of this article. The file for registration of change of
membership shall comprise:

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



12

(a) Request for registration of change of membership;

(b) Notice of result of progress in payin
g capital contributions, or copy capital contribution
certificates of members as certified by the company;

(c) List of members.

7. The business registration office shall, within 5 busine
ss days from the date of receipt of the complete
file specified in this article, carry out registration and issue a registration certificate of change of
membership to the company.

If a member or authorized representative of a member fa
ils to sign the list of members prescribed in
clause 6(c) of this article, the business registration office shall send a notice of the aforesaid list to

the relevant member and request confirmation in writing within 15 days from the date of receipt of
such notice, of the amount of such member's capital actually contributed. The notice must be sent by
a method guaranteeing the relevant member will receive it. Where no written confirmation is received
from the relevant member within the aforesaid time-limit, the business registration office shall
conduct registration of change of membership pursuant to the request of the company. If the
member who failed to sign the list of members provides confirmation objecting to the amount alleged
in the list of members as the capital it contributed, the business registration office shall refuse to
issue registration of change of membership.

8. Where the amount of capital actually contributed in accord
ance with clause 5 of this article is still less
than the total amount undertaken to be contributed, the business registration office shall register the
amount of capital actually contributed as the charter capital of the company when registering change
of membership of the company pursuant to clause 6 of this article; members who have failed to fully
pay capital as undertaken shall be jointly liable corresponding to their respective unpaid capital
amount for debts and other financial obligations of the company arising before registration of change
of membership conducted pursuant to clause 6 of this article.

9. The business registration office shall be entitled to i
nspect the result of progress in paying capital
contributions upon request of one or more members owning capital contribution portions of at least
25% of the charter capital of the company. The result of such inspection by the business registration
office shall be used to determine the number of votes and profit distribution in accordance with
clause 2 of this article and to prepare the file for registration of change of membership in accordance
with clause 6 of this article.

Article 19 Right of m
embers to institute legal proceedings against chairman of members' council and
director (general director)

1. A member shall have the right, in its own or in the company's name, to institute legal proceedings
again
st the chairman of the members' council and/or the director (general director) in the following
cases:

(a) The chairman of the members' council and/or di
rector (general director) failed to properly
exercise assigned rights and duties; failed to perform or fully or promptly perform a decision of
the members' council; or exercised assigned rights and duties contrary to the law or company
charter;

(b) The chairman of the members' council and/or di
rector (general director) used information,
know-how or business opportunities of the company for his or her personal benefit or for that
of another organization or individual;

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



13

(c) The chairman of the members'
council and/or director (general director) abused his or her
station or position and assets of the company for his or her personal benefit or for that of
another organization or individual;

(d) Other cases as stipulated by law and th
e company charter.

2. The order and procedures for institution
of proceedings shall be implemented in accordance with the
corresponding provisions of the law on civil proceedings.

Article 20 Supplem
entary guidelines on a number of rights and obligations of members of a limited
liability company

1. In a case where a member of a limited liability comp
any who is an individual is subject to temporary
detention or imprisonment, sentenced to a term of imprisonment or has his or her right to practise
withdrawn by a court for the crime of smuggling, making counterfeit goods, illegally conducting
business, evading tax, cheating customers or any other crime defined by law, then such member
shall appoint another person to participate in the members' council managing the company.

2. In the case of a two member limited liability compa
ny, if a member who is an individual and the legal
representative of the company is subject to temporary detention or imprisonment, absconds from his
or her place of residence, loses capacity for civil acts or has his or her capacity for civil acts
restricted, or has his or her right to practise withdrawn by a court for the crime of smuggling, making
counterfeit goods, illegally conducting business, evading tax, cheating customers or any other crime
defined by law, then the other member shall automatically become legal representative of the
company until there is a new decision made by the members' council on the legal representative of
the company.

3. In a case where a company fails to redeem a capital contri
bution portion, fails to pay for such
redeemed portion or fails to agree on a price for the redemption as stipulated in article 43 of the Law
on Enterprises, then the member which demanded that the company redeem [its capital contribution
portion] shall have the right to assign such portion to another person. In this case, it shall not be

mandatory for the assignment to be implemented in accordance with article 44 of the Law on
Enterprises.

Article 21 Signature of m
embers or their representatives on minutes of meetings of members' council

1. All members and representatives of members in attendan
ce must sign minutes of meetings of the
members' council as stipulated in article 53.2(c) of the Law on Enterprises. Where a resolution of the
members' council is correctly passed in accordance with articles 51 and 52 of the Law on
Enterprises, but a minority of members or their representatives refuse to sign the minutes of the
meeting, then the signatures certifying attendance at the meeting by such members or representative
shall be deemed to be their signatures on minutes of the meeting of the members' council.

2. Clause 1 of this article shall correspondingly app
ly to signatures of members of the board of
management of a shareholding company as stipulated in article 113.1(i) of the Law on Enterprises.

Article 22 Num
ber of authorized representatives who may participate in members’ council or attend
general meeting of shareholders

1. Unless otherwise stipulate
d by the company charter:

(a) An organization being a member of a limited liabili
ty company owning at least 35% of the

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com

14
charter capital shall have the right to appoint no more than three (3) authorized representatives
to participate in the members' council;

(b) An organization being a shareholder of a sharehol
ding company owning at least 10% of the
total number of ordinary shares shall have the right to authorize a maximum of three (3) people
to attend the general meeting of shareholders.

2. The company owner shall decide the number of mem
bers of the members' council of a limited liability
company with one member being an organization.
6


Article 23 Foundi
ng shareholders

1. Foundi
ng shareholder means a person contributing shareholding capital [and] who participates in
formulating, passing and signing the first charter of the shareholding company.

2. A newly established shareholding company must ha
ve at least three (3) founding shareholders; a
shareholding company which was converted from an enterprise with 100% State owned capital or
from a limited liability company, or which was divided or separated from, or consolidated or merged
with another shareholding company need not necessarily have a founding shareholder/s.

If there is no founding shareholder then the charter of the share
holding company in the application
file for enterprise registration must be signed by the legal representative or by the ordinary
shareholders of such company.

3. Founding shareholders must jointly register to sub
scribe for at 20% of the total number of ordinary
shares carrying the issuance right at the time of enterprise registration. Founding shareholders and
ordinary shareholders at the time of enterprise registration must pay in full for the shares registered
for subscription within 90 days from the date on which the company is issued with its enterprise
registration certificate. Within such period, the number of votes of a shareholder shall be calculated
on the basis of the number of ordinary shares registered for subscription.

4. The company must notify the business registration office of the
result of making payment for the
shareholding capital registered [for subscription], within 15 days from the last day referred to in
clause 3 of this article for shareholders to pay in full for their shares registered for subscription.

5. The following provisions shall apply if a shareholde
r fails to pay in full for the number of shares
registered for subscription within 90 days from the date on which the company is issued with its
enterprise registration certificate:

(a) A shareholder who failed to pay for the number of shares registered for subscription shall
automatically cea
se to be a shareholder of the company and shall not be permitted to transfer
the right to purchase such shares to another person;

(b) A shareholder who paid only for part of the number
of shares registered for subscription shall

have the right to vote and receive dividends and other rights corresponding to the number of
paid shares; but shall not be permitted to transfer the right to purchase the number of unpaid
shares to another person;



6
Allens Arthur Robinson footnote: An alternative translation is "The company owner of a single member limited liability
company where such single member is an organization shall decide the number of members of the members' council of such
company."



 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



15

(c) Where a shareholder failed to pay in full for the number of shares registered for subscription,
the re
sidual shares shall be dealt with in accordance with article 84.3 of the Law on
Enterprises within ninety 90 days after the deadline for [founding] shareholders to pay in full for
their number of shares registered for subscription; at the same time, the company must
register a change of founding shareholder in accordance with clause 6 of this article.

6. The company must register the chan
ge of founding shareholder within 7 business days after expiry of
the 90 day deadline stipulated in clause 5(c) of this article. The file for registration of a change of
founding shareholder shall comprise:

(a) Request for registration of change of founding shareholder;

(b) Copy register of shareholders
certified by the company;

(c) Amended list of founding shareholders.

The business registration office shall carry out registration of a change of founding shareholder within
7 busi
ness days from the date of receipt of a complete file.

7. Where a founding shareholder [or its] authorized re
presentative fails to sign the amended list of
founding shareholders, the business registration office shall send a notice of such amended list to the
relevant shareholder and request it certify the accuracy of the number of paid shares within 15 days
from receipt of the notice. The notice must be sent by a method guaranteeing that the relevant
shareholder will receive it.

If the business registration office does not receive written co
nfirmation from the relevant founding
shareholder within the said period of 15 days, it shall carry out registration of a change of founding
shareholder pursuant to the request from the company. Where the relevant founding shareholder
protests in writing against the accuracy of the list of founding shareholders, the business registration
office shall refuse to carry out registration of change of founding shareholder.

8. The business registration office shall be entitled to inspect the result of paying up shareholding
capital u
pon request of one shareholder or a group of shareholders owning at least 10% of the
charter capital of the company. Such inspection result shall be used for preparation of the register of

shareholders and list of founding shareholders, for issuance of share certificates to shareholders and
for other necessary files and documents of the company.

9. If after three years from the date of issuance of the initial ent
erprise registration certificate the
number of shares carrying the issuance right as stipulated in article 84.4 of the Law on Enterprises is
not fully sold, then the company must register an amendment being a reduction of the amount of
capital the company is entitled to issue so that it is equal to the number of shares actually issued.
Shareholding companies shall not be permitted to increase the number of shares the company is
entitled to issue when the number of existing shares have not yet been fully sold.

10. The restriction on founding shareholders assigning th
eir shares prescribed in article 84.5 of the Law
on Enterprises shall only apply to the number of shares registered for subscription at the time of
initial enterprise registration and paid for within the deadline of 90 days from the date of issuance of
the enterprise registration certificate.

Article 24 Offer of s
hares for sale

1. A shareholding company may offer shares for sale by one of the following methods:

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



16

(a) Via the mass media, including internet;

(b) Offer for sale to one hundred or more investors exclu
sive of professional securities investors;

(c) Offer for sale to a number of unidentified investors;

(d) Offer for sale to less than one hundred identified investors.

2. The file, order, procedures and conditions for offering
shares for sale shall be implemented in
accordance with the relevant provisions of the law on securities.

3. On completion of a share offering tranche, a co
mpany must re-register its charter capital in
accordance with the Law on Enterprises and Decree 43-2010-ND-CP of the Government dated 15
April 2010 on enterprise registration.

Article 25 Right to in
stitute legal proceedings against members of board of management and director
(general director)

1. A shareholder or group of shareholders holding at least 1% of the total numbe
r of ordinary shares for
a consecutive period of six months shall be entitled to require the inspection committee to initiate
legal action for civil liability against members of the board of management and/or the director
(general director) in the following cases:

(a) A member/s of the board of management and/or the dire
ctor (general director) failed to
properly exercise assigned rights and duties; failed to perform in full or promptly a decision of
the board of management; or exercised assigned rights and duties contrary to law, contrary to

the company charter or contrary to a resolution of the general meeting of shareholders;

(b) A member/s of the board of management and/
or the director (general director) used
information, know-how or business opportunities of the company for his or her personal benefit
or for that of another organization or individual;

(c) A member/s of the board of management and/or th
e director (general director) abused his or
her station or position and assets of the company for his or her personal benefit or for that of
another organization or individual;

(d) Other cases as stipulated by law and th
e company charter.

2. The inspection committee must, within 15 days from the date of receipt of a request from a
sha
reholder or group of shareholders to institute proceedings as referred to in clause 1 of this article,
provide written confirmation that it received such request and has conducted procedures to bring
legal action as requested.

3. If the inspection committee fails to institute proceedi
ngs as requested and as referred to in clause 2
above, or if a shareholding company does not have an inspection committee, then the shareholder or
group of shareholders prescribed in clause 1 of this article shall have the right to directly institute
proceedings against a member/s of the board of management and/or the director (general director).

4. The order and procedures for institutin
g proceeding shall be implemented in accordance with the
corresponding provisions of the law on civil proceedings.

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



17
Article 26 Some issues relating to general meeting of shareholders

1. Shareholders may attend the general meeting of sh
areholders by one of the following methods:

(a) By directly attending a meeting of the general m
eeting of shareholders;

(b) By sending their voting slips by a method guarante
ed to reach the board of management at
least one day prior to the opening of such meeting. In this case, the head of the vote-counting
committee of the general meeting of shareholders shall have the right to open the voting slips
of such shareholders;

(c) By authorizing another person to attend a meeting
of the general meeting of shareholders. If a
shareholder being an organization does not have an authorized representative in accordance
with the provisions in article 96.3 of the Law on Enterprises, it shall authorize another person
to attend the meeting of the general meeting of shareholders.

2. Where a shareholder attending a meeting is a related person without the voting right, the resolution
of the gen

eral meeting of shareholders on such issue shall be passed by [the number of
shareholders representing] at least sixty 65% or 75% of the total voting shares [of all attending
shareholders] as stipulated in clauses 3(a) and (b) respectively of article 104 of the Law on
Enterprises.

Article 27 Effectivene
ss of resolutions and decisions of the general meeting of shareholders, of the
members’ council and of the board of management

1. Resolutions and decisions of the general meeting o
f shareholders, of the members’ council and of
the board of management shall be effective for implementation from the date they are passed or from
the effective date specified in such resolution or decision.

2. If a shareholder or group of shareholders, a member of the members’ co
uncil or a member of the
board of management requests institution of proceedings or directly institutes proceedings regarding
a resolution or decision which has been passed, such resolution or decision shall still continue to be
effective until the court or arbitrator issues some other decision.

Article 28 Disclo
sure of related persons and their transactions with company

Disclosure of related persons and their transactions with
the company shall be carried out in accordance
with the following provisions, unless otherwise stipulated by the company charter:

1. The company shall collate and update a list of related persons of the company in accordance with
article 4.1
7 of the Law on Enterprises and their corresponding transactions with the company; such

list must be kept at the head office of the company; where necessary, all or part of the contents of
such list may be kept at branches of the company.

2. All shareholders, managers, members of the insp
ection committee of the company and their
authorized representatives shall be entitled to sight and make an extract or copy of all or part of the
contents of such list during working hours.

3. The company shall facilitate the persons prescribed i
n clause 2 of this article in accessing, sighting
and making an extract or copy of the list of related persons of the company and other items, in the
quickest and most favourable way. No person shall be entitled to prevent or cause difficulties for
such persons in exercising their right to access the information prescribed in clause 2 of this article.


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



18
Article 29 Method of cumulative voting

1. The method of cumulative voting stipula
ted in article 104.3(c) of the Law on Enterprises shall apply to
all shareholding companies including listed companies, unless the law on securities provides
otherwise.

2. Before and during a meeting of the general meetin
g of shareholders, shareholders shall have the
joint right to form a group in order to nominate a candidate/s and to cast cumulative votes for their

candidate/s.

3. The number of candidates which each group shall have the right to nominate shall depend on the
numbe
r of candidates decided by the general meeting and the share ownership ratio of each group.
Unless the company charter stipulates otherwise and unless the general meeting of shareholders
decides otherwise, the number of candidates which a group shall have the right to nominate shall be
regulated as follows:

(a) A shareholder or group of shareholders holding from
ten (10) to below twenty (20) per cent of
the total voting shares shall have the right to nominate a maximum of one candidate;

(b) A shareholder or group of shareholders holding from
twenty (20) to below thirty (30) per cent of
the total voting shares shall have the right to nominate a maximum of two candidates;

(c) A shareholder or group of shareholders holding fro
m thirty (30) to below forty (40) per cent of
the total voting shares shall have the right to nominate a maximum of three candidates;

(d) A shareholder or group of shareholders holding from
forty (40) to below fifty (50) per cent of
the total voting shares shall have the right to nominate a maximum of four candidates;

(dd) A shareholder or group of shareholders holding from
fifty (50) to below sixty (60) per cent of
the total voting shares shall have the right to nominate a maximum of five candidates;

(e) A shareholder or group of shareholders holding from

sixty (60) to below seventy (70) per cent
of the total voting shares shall have the right to nominate a maximum of six candidates;

(g) A shareholder or group of shareholders holding from seventy (70
) to below eighty (80) per cent
of the total voting shares shall have the right to nominate a maximum of seven candidates;

(h) A shareholder or group of shareholders holding from eighty (80) to below ninety (90) per cent
of the total vo
ting shares shall have the right to nominate a maximum of eight candidates.

Where the number of candidates nominated by a sharehold
er or group of shareholders is lower than
the number of candidates they are entitled to nominate, then the remaining candidates shall be
nominated by the board of management or by the inspection committee or by other shareholders.

4. Persons elected to be members of the board of man
agement or of the inspection committee shall be
verified on the basis of a count from the highest number down to the lowest number of votes, starting
with the candidate with the highest number of votes until all the number of members as required by
the company charter have been elected. If two or more candidates receive the same number of
votes for the last position of membership of the board of management or inspection committee, there
shall be another vote taken on such two or more candidates, or the member shall be selected in
accordance with voting rules or the company charter.



 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com

19
Article 30 Supplementary guidelines on meetings of board of management

1. The meeting of the board of mana
gement convened by the first notice convening a meeting shall be
conducted when three-quarters or more of the total number of members are present.

2. Where the stipulated number of members is not pre
sent at the meeting convened in accordance with
clause 1 of this article, the meeting shall be convened for a second time within 15 days of the date of
the intended first meeting. In this case, a meeting shall be conducted when there are more than one-
half of the number of members of the board of management present.

Article 31 Conversi
on of a single member limited liability company into a multiple member limited liability
company

1. Conversion of a
limited liability company with 100% State owned capital into a multiple member
limited liability company shall be implemented in accordance with separate regulations of the
Government.

2. Except for the case stipulated in clause 1 of this articl
e, a single member limited liability company shall
be permitted to convert into a multiple member limited liability company when the company owner has
contributed the full amount of capital as undertaken. The company may convert by the following forms:

(a) The company owner assigns or donates a part of its o
wnership portion in the company to one or

more other people;

(b) The company raises additional capital contribu
tions from one or more other people.

The value of the portion of capital contribution assigned, dona
ted or additionally raised corresponding
to the aforesaid forms must be the market value determined in accordance with the asset method, the
discounted cash flow method or other methods.

3. The company shall lodge or send a file for conversion to the bu
siness registration office or to the
competent State administrative body for investment which issued the investment certificate, within
15 business days from the date the company owner assigns or donates a part of its ownership portion
in the company to one or more other people, or from the date the company raises additional capital
contributions, or from the date one or more other people undertake to make capital contribution
portions. The file, order and procedures for conversion shall be implemented in accordance with the
corresponding provisions of Decree 43-2010-ND-CP of the Government dated 15 April 2010 on
enterprise registration ["Decree 43"].

The business registration office or
competent State administrative body for investment shall re-issue
the equivalent enterprise registration certificate or investment certificate, within 5 business days from
the date of receipt of the file for conversion.

4. The [new] converted company shall automatically inherit all the legal rights and interests and shall be
liable
for all debts including tax debts, labour contracts and other obligations of the company which was
converted.

5. The business registration office or the State body a
dministering investment must notify the relevant
State bodies stipulated in article 27.1 of the Law on Enterprises and also delete the name of the
company which was converted from the register of enterprises, within 7 business days from the date of
issuance of the enterprise registration certificate or investment certificate referred to in clause 3 above.



 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



20
Article 32 Conversion of shareholding company or multiple member limited liability company into single
member limited liability company

1. A shareholding company or a multiple member limited liability company may convert into a single
membe
r limited liability company by the following methods:

(a) One shareholder or one member receives an assignment of the entire corresponding shares or
capital
contribution portions of all the other shareholders or members respectively;

(b) One shareholder or one member being a legal entity
accepts [agrees] to contribute investment
capital being equal to the entire corresponding shares or capital contribution portions of all of
the other shareholders or members;

(c) One organization or individual who is not a member or shareholder receives an assignment or

receives th
e investment capital contribution by the entire number of shares or capital
contribution portions of all of the shareholders or members respectively of the company.

2. The assignment or receipt of investment capital by
shares or capital contribution portions stipulated
in clause 1 of this article shall be carried out on the basis of the market price determined in
accordance with the asset method, the discounted cash flow method or other methods.

3. The company shall send or lodge a file for conversion with the
business registration office at the
place where the enterprise registered or with the State administrative body for investment which
issued the investment certificate, within 15 business days from the date on which one shareholder or
member receives an assignment as stipulated in clause 1(a), or receives the investment capital
contribution as stipulated in clause 1(b), or on which another person receives an assignment or the
investment capital contribution as stipulated in clause 1(c) of this article. The file for conversion shall
be implemented in accordance with the corresponding provision of Decree 43.

The business registration office or
competent State administrative body for investment shall re-issue
the enterprise registration certificate or investment certificate, within 5 business days from the date of
receipt of the file for conversion.

4. The [new] converted company shall automatically inherit all the legal rights and interests and shall be
liable
for all debts including tax debts, labour contracts and other obligations of the company which was
converted.

5. The business registration office or State body adminis
tering investment must notify the relevant State

bodies stipulated in article 27.1 of the Law on Enterprises and also delete the name of the company
which was converted from the register of enterprises, within 7 business days from the date of issuance
of the enterprise registration certificate or investment certificate referred to in clause 4 above.

Article 33 Conversi
on of a limited liability company into a shareholding company

1. The law on conversion of State owned companies into shareholding companies shall apply to
impleme
nting the conversion of a limited liability company with 100% State owned capital into a
shareholding company.

2. A limited liability company may convert into a shareholding company by the following methods:

(a) Conversion into a shareholding company witho
ut raising share capital contribution from other
persons or selling existing shares to other persons;


 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



21
(b) Conversion into a shareholding company in conjunction with an initial public offering;

(c) Conversion into a shareholding company in conjunction with an offer of s
hares for sale to less
than one hundred (100) identified investors.

3. In the case of a limited liability company convertin
g into a shareholding company by way of a public
offer, the conditions for conversion and the order, procedures and conditions for offering securities
for sale shall be implemented in accordance with the law on securities.

4. Within a time-limit of 5 business days from the date
of receipt of a file for conversion, the business
registration office or State administrative body for investment shall re-issue the corresponding
enterprise registration certificate or investment certificate, and also recover the previous enterprise
registration certificate or investment certificate which was issued to the company which was converted.
The file for conversion shall be implemented in accordance with the corresponding provision of
Decree 43.

5. The [new] converted company shall automatically inherit all the legal rights and interests and shall be
liable
for all debts including tax debts, labour contracts and other obligations of the company which was
converted.

6. The business registration office or State body adminis
tering investment must notify the relevant State
bodies stipulated in article 27.1 of the Law on Enterprises and also delete the name of the company
which was converted from the register of enterprises, within 7 business days from the date of issuance
of the enterprise registration certificate or investment certificate referred to in clause 4 above.

Article 34 Basic
contents of an application for conversion

The request for conversion stipulated i
n articles 31, 32 and 33 of this Decree must contain at least the
following particulars:

1. Name of the company to be converted;

2. Name of the converted company (if it is proposed the
company will change its name on conversion);

3. Head office address, telephone and fax numbers, and e-mail address (if any);

4. Line/s of business;

5. Current charter capital and proposed charter capital
after raising additional capital contributions or
shareholding;

6. Form of conversion;

7. Full name, permanent residential address, number o
f people's identity card or passport of the legal
representative of the company;

8. Other items as stipulated in clau
ses 5 and 6 of article 21 of the Law on Enterprises.

Article 35 Conte
nts of an enterprise registration certificate or business registration items in an investment
certificate applicable to a case of conversion

The enterprise registration certificate of a company conve
rted pursuant to articles 31, 32 and 33 of this
Decree shall contain the following basic particulars:

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



22

1. Name of the company prior to conversion, number an
d date of issuance of its enterprise registration
certificate or investment certificate, and charter capital.

2. Name of the converted company, number and date of its en
terprise registration certificate or
investment certificate.

3. Head office address, address of a
ny branch or representative office; telephone and fax numbers and
email address (if any) of the converted company.

4. Charter capital of the converted company in the
case of a limited liability company; number of shares
and value of shares already sold, and number of shares carrying the right to offer for sale in the case
of a shareholding company.

5. Line/s of business.

6. Full name and permanent residential address or registe
red temporary address (in the case of a
foreigner), nationality and number of people's identity card or passport (in the case of a foreigner) or
other legal personal identification of the legal representative of the company.

7. Other items as stipulated in article 25.3 of the Law on
Enterprises.

Article 36 Conversi
on of a private enterprise into a limited liability company

1. A private enterprise may convert into a limited liability
company pursuant to the decision of the owner
of the private enterprise if it satisfies all the following conditions:

(a) It satisfies the conditions stipulated in article 24 of the Law on Enterprises;

(b) The owner of the private enterprise must be the
company owner (in the case of conversion to
a limited liability company with one member who is an individual), or must become a member
(in the case of conversion to a multiple member limited liability company);

(c) The owner of the private enterp
rise must provide a written undertaking to be personally liable
to the extent of all assets owned by him or her to pay all unpaid debts of the private enterprise,
and must undertake to pay all debts when they mature;

(d) The owner of the private enterprise must have written
agreements with parties to unliquidated
contracts that the converted limited liability company will accept and perform such contracts;

(dd) The owner of the private enterprise must have
written undertakings or written agreements with
other capital contributing members to take over and employ the current employees of the

private enterprise.

2. Within ten (10) business days from the date of recei
pt of a file, the business registration office shall
consider and issue an enterprise registration certificate if all the conditions stipulated in clause 1 of
this article are satisfied. In a case of refusal, the business registration office must provide a written
response specifying its reasons and include guidelines on amendment or addition to the application
file. The file for conversion shall be implemented in accordance with the corresponding provision of
Decree 43.

3. The business registration office or State body adminis
tering investment must notify the relevant State
bodies stipulated in article 27.1 of the Law on Enterprises and also delete the name of the company

 Allens Arthur Robinson - Vietnam Laws Online Database on www.vietnamlaws.com



23
which was converted from the register of enterprises, within 7 business days from the date of issuance
of the enterprise registration certificate referred to in clause 2 above.

Article 37 Joint ventu
re enterprises and enterprises with 100% foreign owned capital which have not re-
registered pursuant to Decree 101:

1. Internal managerial organization and the operati
on of the enterprise shall be implemented in
accordance with the provisions in the enterprise charter; if the charter does not contain provisions,
the corresponding provisions of the Law on Enterprises and its implementing guidelines shall apply.

2. They shall have corresponding rights and obligations as stipulated in the La
w on Enterprises, the
Law on Investment and other relevant laws during the conduct of their business operation within the
scope of the line/s of business stipulated in their investment licences.

Article 38 Supplem
entary guidelines on economic groups

1. An econom
ic group comprises a group of companies with independent legal entity status, formed on
the basis of a conglomeration [or] association by means of investment, capital contribution, merger,
acquisition, restructuring or other forms of association, and associating with each other on a long-
term basis for economic, technological and market benefits and for other economic services to form a
business group with two or more levels of enterprise in the form of a parent - subsidiary companies.

2. An economic group shall not have legal entity status an
d shall not be required to conduct business
registration in accordance with the Law on Enterprises. The companies forming the economic group
shall make their own decision on the operational organization of the economic group.

3. The parent company shall be organized in the form
of a shareholding company or limited liability
company which satisfies the conditions stipulated in article 4.15 of the Law on Enterprises. The
subsidiary companies shall be organized in the form of shareholding companies or limited liability
companies in accordance with the provisions in the Law on Enterprises or other relevant laws.

The parent company, subsidiary companies and other companies forming the economic group shall
have right
s and obligations, and an organizational structure of management and operation consistent

with the form of organization of an enterprise as stipulated in the Law on Enterprises, relevant laws
and the company charter/s.

4. The expression "group" may be used as a subsidia
ry element of the discrete name of the parent
company, in compliance with articles 31 to 34 inclusive of the Law on Enterprises on naming
enterprises.

5. The Ministry of Finance shall provide guideline
s on consolidated financial reporting by, and on
supervision of the financial operation of economic groups, and of groups of parent - subsidiary
companies within an economic group.

The Ministry of Industry and Trade shall provide gui
delines on supervision of economic groups and
groups of parent - subsidiary companies within an economic group implementing the provisions on
restraint of competition, dominant market position and monopoly position.

Article 39 Supervi
sion by business registration office of order and procedures for conducting meetings of
general meeting of shareholders and [for issuing] decisions of general meeting of shareholders

1. A shareholder or group of shareholders pre
scribed in article 79.2 of the Law on Enterprises shall
have the right to request the business registration office or competent State administrative body for