The main updated points on Law of Enterprises 2020

The main updated points on Law of Enterprises 2020 in comparison with Law of Enterprises 2014

The main updated points on Law of Enterprises 2020
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On June 17, 2020, National Assembly approved the Law on Enterprises No. 59/2020/QH14, comes into force from January 01, 2021. The main updated points of Law on Enterprises 2020 in comparison with Law on Enterprises 2014 are summarized below: 

1. State-owned enterprises

In Clause 11 of Article 4 and Article 88, State-owned enterprises shall be limited liability companies or joint stock companies, including:

  • Wholly state-owned enterprises (100% of charter capital of which is held by the State) or;
  • Partially state-owned enterprises (over 50% of charter capital or voting shares is held by the State).

2. Organizations and individuals do not have the right to establish and manage enterprises in Vietnam

In Clause 2 Article 17 adds a number of cases where the subjects do not have the rights to establish and manage enterprises in Vietnam, such as:

  • Police workers and public employees;
  • People who has limited legal capacity or is incapacitated, is not able to control his/her own behaviors;
  • Juridical persons that are banned from business operation or banned from certain fields as prescribed by the Criminal Code.

3. Enterprise registration method and the enterprise’s seals

In Clause 1 Article 26, in addition to the form of direct registration at the business registration office, two additional new enterprise registration methods are: 

  • Submission of the application by post;
  • Submission of the application by online.

In Article 43, The seal includes the seal made at the stamp engraved establishment or the seal in the form of digital signature according to the provisions of the law on electronic transactions.

Eliminate the regulation on notifying the seal sample to the business registration office. Moreover, no longer provides for the notification of the enterprise's seal sample to the business registration authority for public posting on the National Business Registration Portal after being granted a Certificate of Business registration.

4. Organizational structure of a single-member limited liability company owned by an state-owned enterprise and Board of controllers.

In Clause 2 Article 79, the company’s owner is a state-owned enterprise, a Board of Controllers shall be established.

The state ownership representative body shall decide the establishment of a Board of Controllers, which has 01 – 05 Controllers including a Chief Controller. In case the Board of Controllers has only 01 Controller, he/she shall be the Chief Controller and has to satisfy corresponding requirements. An individual may concurrently hold the position of Chief Controller or Controller of up to 04 state-owned enterprises.

5. Household businesses

Household businesses do not operate under Law on Enterprises