Who can establish a company?

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Who can establish a company?

The current Enterprise Law stipulates who has the right to establish an enterprise and the conditions for setting up an enterprise in each specific business field, based on the principle that an enterprise is allowed to do business in any field that is not prohibited by law.

Establishing a company allows the creation of a new business entity. When participating in the market, enterprises will become subjects of civil, commercial, labor transactions, etc, create and be responsible for property rights and obligations. Therefore, the entity having the right to establish an enterprise must be an organization or individual that has adequate capabilities and suitable conditions to take responsibility for the enterprise they have created.

Who can establish a company?

Entities with the right to establish a business

Extracted from Article 18 of the 2014 Enterprise Law, our lawyers emphasize that: Every “organization or individual” has “the right to establish and manage an enterprise” in Vietnam, except for the cases “under the provisions of law”, which is specified in Clause 2, Article 18″.

The following organizations and individuals are not eligible to establish enterprises:

  • State agencies, armed forces and people’s army use common property to establish businesses and bring benefits to their individuals, units and organizations.
  • The cadres, civil servants and public employees are recognized according to the provisions of law.
  • Officers, non-commissioned officers, professional soldiers, defense workers and officers in agencies and units of the People’s Army; officers and professional non-commissioned officers in agencies and units of the Vietnam People’s Public Security, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises.
  • Professional leaders and managers of state agencies and enterprises, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises.
  • Persons under the age of majority; persons with limited or incapacitated civil act capacity; organization has no legal status.
  • Persons who are examined for penal liability, sentenced to prison, or administratively handled at a rehabilitation facility/compulsory educational institution or who are banned from doing business.
  • Persons holding positions or doing business-related jobs under a Court’s decision; other cases according to the provisions of the law on bankruptcy and anti-corruption.

Some notes on business establishment objects

Each individual is only entitled to register for the establishment of a private enterprise or a business household or to be a general partner of a partnership unless otherwise agreed by the other general partners.

An individual owner of a private enterprise or business household or an individual general partner has the right to establish or participate in the establishment of a one-member limited liability company, a two-member (or more) limited liability company, stock company.

The investor is a foreign organization or individual that establishes an enterprise for the first time in Vietnam shall register for investment in association with the establishment of an economic organization in accordance with the provisions of the law on investment. In this case, the enterprise is granted an Investment Certificate which is concurrently the Certificate of Business Registration.

Procedures for registering a business establishment

According to Article 23 of the Enterprise Law 2014, our lawyers require businesses to prepare all necessary documents in a detailed and clear manner to ensure a quick application process, favorable. Specifically, required documents include:

1. Application for business registration

2. Company Charter

3. List of founding shareholders and foreign investors

4. Copies of papers including:

Identity card, citizen identification card, passport, or other legal personal identification and identification papers of founding shareholders or individual foreign investors.

Business establishment decision, business registration certificate, power of attorney or other equivalent documents.

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