New highlights of the law on enterprise 2020 – Part 2

PART 2: AMENDMENTS ON ESTABLISHMENT, TEMPORARY SUSPENSION OF BUSINESS, AND DISSOLUTION OF ENTERPRISES

Law on Enterprise 2020 officially takes effect from January 1, 2021. Accordingly, there are some amendments compared to the Law on Enterprise 2014 to make regulations more suitable for actual practice.

In order to support enterprises to update information in a timely and accurate manner under new regulations of the law, PL & Partners will provide information about changes in Law on Enterprise 2020.

Continuing the content about changes in General Provisions that were sent to readers in part 1, PL & Partners are going to continue figuring out more new highlights of the Law on Enterprise 2020 on amendments related to the establishment, temporary suspension of business, and dissolution of enterprises.

1. THOSE WHO ARE BANNED FROM ESTABLISHING AND MANAGING ENTERPRISES

Law on Enterprise 2014

Law on Enterprise 2020

Previously, Clause 2, Article 18 of the Law on Enterprise 2014 specified individuals and organizations that were not allowed to establish and manage enterprises, including:

a) State agencies, people’s armed force units using state-owned property to establish enterprises for self-seeking purposes.

b) Cadres, civil servants, and public employees defined by regulations of law on cadres and civil servants, law on public employees;

c) Officers, non-commissioned officers, professional military personnel, workers, public employees working at units of the People’s Army; specialist officers, non-commissioned officers working at units of the People’s Public Security, except for those appointed as authorized representatives to manage the state capital in enterprises;

d) Executive officers of state-owned enterprises, except for those appointed as authorized representatives to manage state capital in other enterprises;

dd) Minors; people with limited or lack of capacity for civil act; organizations not having legal status;

e) Any person who is facing criminal prosecution, serving a prison sentence, undergoing drug rehabilitation, being sent to a reform school; or banned from doing certain business, holding a particular title, or doing a specific job by the court; and other cases prescribed by the laws on bankruptcy,  anti-bribery, and anti-corruption.

Clause 2, Article 17 has supplemented some subjects who do not have the right to establish and manage enterprises. Those are:

– People having difficulties in awareness and control of their behaviors;

– Non-commissioned officers and police workers in agencies and units of Viet Nam People’s Police (except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises);

– Commercial entities that are banned from doing business or operating in certain fields as prescribed by the Criminal Code.

 

2. OBJECTS PROHIBITED FROM CONTRIBUTING CAPITAL

The Law on Enterprise 2020 stipulates one more case in which those who are banned under the Law on Cadres and Civil Servants, the Law on Public Employees, and the Law on Anti-bribery and Anti-corruption are not allowed to contribute capital, or buy shares, stakes.

3. CHANGES IN REGULATIONS ON COMPANY SEAL

The Law on Enterprise 2020 gives several changes to regulations of the company seal, notably the legal recognition of digital signatures as the seal of the enterprise.

The new points related to the company’s seal include:

Law on Enterprise 2014

Law on Enterprise 2020

Not stipulated. The legal recognition of digital signature as the company seal.  
Clause 2, Article 44 stipulated that before using the seal, enterprises are obliged to notify the seal sample to the business registration authorities for public posting on the National  Business Registration Portal. Businesses do not have to notify the seal sample before using.

According to Clause 1, Article 44, the seal must show the following information: 

– Company’s name; 

– Enterprises code. 

Enterprises are entitled to self-determination with their seals.

Enterprises are entitled to determine the type, quantity, form, and content of the seal of their own, their branches, representative offices, and other units. 

The management, usage, and storage of the seal shall comply with the provisions of the company’s charter.

Changes related to management, storage and usage of the seal. 

The management and storage of the seal must comply with the provisions of the company’s charter, or other regulations of the enterprises, their branch, representative office, or other units that have its enforced seal. 

4. TIME LIMIT FOR NOTICE PRIOR TO THE DATE OF TEMPORARY SUSPENSION OF BUSINESS ACTIVITIES

Law on Enterprise 2014

Law on Enterprise 2020

Enterprises shall send a written notification on the time and duration of business suspension to the business registration authority at least 15 working days before the date of suspension.

The time limit for prior written notification to the business registration authority has been narrowed to 03 working days.

 

5. THERE IS NO NEED TO RESUBMIT THE ENTERPRISE REGISTRATION CERTIFICATE WHEN THE ENTERPRISE IS DISSOLVED

Law on Enterprise 2014

Law on Enterprise 2020

Article 204 stipulated that when an enterprise is dissolved, it must return the Enterprise Registration Certificate. This provision is abolished.

 

PL and Partners Law Firm has introduced to you some new points regarding the establishment, temporary suspension of business, and dissolution of the enterprise under the Law on Enterprise 2020.

We do hope that the above information will help you have a better understanding of this law.

See more: New highlights of the law on enterprise 2020 – Part 3

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