NEW POINTS IN THE REGULATIONS OF ENTERPRISE ESTABLISHMENT IN THE AMENDED LAW ON ENTERPRISE
Procedures for business registration are framework laws that investors will comply with those provisions if they want to join the markets. According to Enterprise Law 2014 and legal documents of guiding the implementation, the current law regulates 8 steps of procedures and toughly 20 working days which do not include day-off and wait times. Compared with regional and international standards, Vietnam’s procedures for business are still sophisticated, wasting a lot of time and cost.
This fact has required the National Assembly to reduce unnecessary time and costs for enterprises. At the 9th session of the Fourteenth National Assembly, 90.68% of congressmen voted for the approval of the Law amending, supplementing a number of articles of the Law on enterprise which will come into effect on January 1st, 2021. This law has a lot of important changes including regulation of establishing enterprises. The amended enterprise law has the following new points:
Firstly, supplementing regulations of entities that are not permitted to establish and manage enterprises
Enterprise law 2014 contains provisions on organizations and individuals that are not permitted to establish and manage enterprises in Vietnam. The amended law 2020 added 2 cases as follow:
- Persons with limited cognition or behavior control;
- The corporate legal entity that commits this offense might also be banned from operating in certain fields according to some provisions of the Criminal Law.
In addition, to fit the current reality, in some businesses directly governed by the Ministry of National Defense, some professional commissioned officers and soldiers a certain management positions despite the fact that they are not representatives of this institution’s capital. Therefore, the amended Law also amend the provision of soldiers banned from establishing enterprises, as follow: “ 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 or manage the State-owned company”;
Secondly, there is the considerable modification in the provision of procedures for business registration
The new law provides concrete regulations of ways to register the business, specifically: Business registration at the business registration authority, Business registration via postal and telecommunications services, Business registration via the electronic information network.
Although provisions of business registration via online applications are regulated in Decree No.78/2015/ND-CP, they are officially recognized in the amended law 2020. This facilitates the process of business registration, contributing to increasing the ratio of the online application for enterprise registration in the near future, cutting down unnecessary expenses and time for enterprise registration. Vietnam Laws are gradually moving towards the elimination of cumbersome procedures. The applicant for enterprise registration complies with the following regulations:
- The business founder submits the online application for enterprise registration at National Business Registration Portal.
- The application for enterprise registration consists of data regulated in the amended law 2020, they are expressed under the format as the electronic documents. The online application for enterprise registration is the same legal validity as a paper application for enterprise registration.
- Organizations and individuals may use digital signatures or business registration account for online enterprise registration. The business registration account is created by the National Enterprise Registration Information System, which is provided by individuals for online enterprise registration.
Thirdly, enterprises do not have to send the seal sample to the business registration authority
In order to simplify procedures, reducing the cost of enterprise registration, avoiding long-term internal conflicts because the seal is held by one party, the amended law 2020 repeals the regulation that the enterprise must send the seal sample to the business registration authority in order for the business registration authority to post it on the National Business Registration Portal before using the seal. The new provision of the seal sample is amended as follows:
- Every enterprise is entitled to decide whether or not to have the seal, the number of the seal, the form, and contents of its seal in enterprises’ branches, representative offices, and other units.
- The management, use, and retention of the seal shall comply with the company’s charter, regulations promulgated by enterprises or other units.
Fourthly, the new Law repealed the regulation on sending the periodically business registration information to the business registration authority in charge of the administrative division where the enterprises’s headquarter is situated.
Currently, business registration information has publicly published National Business Registration Portal, thus, organizations and individuals can access it easily. Therefore, it is unnecessary to request that business registration authorities must send business registration information to other authorities because this incurs the registration authority’s expense. According to new provisions, other authorities must regularly and periodically find out the necessary information on the National Business Registration Portal to serve their tasks.