New highlights of the law on enterprise 2020 – Part 2

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

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

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

Continuing the content about changes in General Provisions of Law on Enterprise 2020 that were sent to readers in part 1, PL and Partners are going to continue figuring out some new highlights of the Law on Enterprise 2020 – part 2 on amendments related to the establishment, suspension and dissolution of business.

1. THOSE WHO ARE BANNED FROM ESTABLISHING AND MANAGING THE BUSINESS

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 the business, including:

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

b) Officials and civil servants defined by regulations of law on officials and civil servants;

c) Commissioned officers, non-commissioned officers, workers and civil servants working at units of the army; commissioned officers, non-commissioned officers working at police units, except for those appointed as authorized representatives to manage state capital contributed to other enterprises;

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

dd) Minors; people that are legally incompetent; organizations without legal status;

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

Clause 2, Article 17 has added a number of subjects who do not have the right to establish and manage the business. Those are:

– People having difficulties in controlling 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);

– Juridical persons that are banned from business operation or banned from 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 Officials, the Law on Public Employees, and Anti-corruption Law are not allowed to contribute capital, buy shares or stakes.

3. CHANGES ON REGULATIONS OF COMPANY SEAL

The Law on Enterprise 2020 gives a number of changes on regulations of the company seal, notably the legal recognition of digital signatures as the seal of the business.

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 seal of the business.  
Clause 2, Article 44 stipulated before using the seal, the business is obliged to notify the seal sample to the business registration authorities for public posting on the National Information Portal on business registration. Businesses do not have to notify the seal sample before using.

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

– Company’s name; 

– Business code. 

Businesses are entitled to self-determination with their seals.

Businesses are entitled to determine the type, quantity, form and content of the seal of their business, 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 regulations by the businesses, their branch, representative office or other unit of the business that has its enforced seal. 

4. TIME LIMIT FOR PRIOR NOTICE BEFORE THE DATE OF BUSINESS SUSPENSION

Law on Enterprise 2014

Law on Enterprise 2020

Business shall send a written notification to the business registration authority on the time and duration of business suspension 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, suspension and dissolution of the business 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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