Things to know about business cooperation contracts (BCC)
What is a business cooperation contract (BCC)?
According to Article 3, Clause 9 of the 2014 Investment Law:
- “Business cooperation contract (hereinafter referred to as BCC contract) is a contract signed between investors in order to cooperate in profit sharing and product sharing without establishing an economic organization. “
- to conduct business co-operation among organizations, there are many ways to cooperate that the parties can consider such as: establishing a common economic organization or contributing capital to the team economic function …
However, BCC business contracts are still selected by enterprises because of the benefits when participating in the BCC contract.
Meaning of BCC contract
It is not necessary to establish a common economic organization to manage business operations.
- Investors will save time and cost for establishing and operating a new legal entity,
- Not depending on the partner’s decision when the investor wants to transfer or sell his / her share in certain circumstances.
- When the project is finished, investors do not have to worry about dissolution.
To agree to use assets formed from business cooperation to establish enterprises under the provisions of law on enterprises.
Foreign investors can set up offices in Vietnam on behalf of investors to manage business activities under BCC contracts.
Subjects participating in the BCC contract
BCC contracts are usually signed between the following entities to carry out business activities:
- BCC contract signed between domestic investors
- BCC contract is signed between domestic investors and foreign investors.
- BCC contract signed between foreign investors.
Rights and obligations of parties in bcc contracts.
When participating in BCC cooperation, the parties have the following key rights:
- Parties to the BCC contract set up a coordinating committee to implement the BCC contract. The functions, duties and powers of the coordination board are agreed by the parties.
- In the process of implementing the BCC contract, the parties to the contract are allowed to use the property formed from business cooperation to establish an enterprise in accordance with the law on enterprises.
- Parties to BCC contracts have the right to agree on other content that is not contrary to the law.
Contents of BCC contract
According to Article 29, 2014 Investment Law, BCC contract includes the following main contents:
- Name, address, authorized representative of the contracting parties; transaction address or address of the project location;
- Objectives and scope of business investment activities;
- Contribution of the parties to the contract and the division of business investment results between the parties;
- Schedule and duration of contract performance;
- Rights and obligations of contracting parties;
- Amend, transfer, terminate the contract;
- Responsibility for breach of contract, dispute resolution method.
- And other eligibility requirements depend on the cooperation needs of the BCC contract parties.