New points of Enterprise Law 2020
Enterprise law 2020 with effectiveness since 1st January, 2021 in replacement of enterprise law 2014 has following new points:
1. Addition of subjects prohibited for setting up enterprise
Besides organizations and individuals prohibited for setting up and managing enterprises in Vietnam as stipulated in enterprise law 2014, enterprise law 2020 adds one more subject prohibited for setting up and managing enterprise as follows:
An organization is a commercial legal person prohibited for operating in some fileds as regulated in criminal law.
So, there will be 7 subjects prohibited for setting up and managing enterprises in Vietnam from 1st January, 2021.
2. Name of business locations of enterprise must be included in enterprise’s name
Article 41 of Enterpise law 2014 only regulates that name of business locations of enterprise must be written using the Vietnamese alphabet, the letters F, J, Z, W, digits, and symbols.
Since 2021, besides regulations about letters as above mentioned, there is a must that name of business locations shall include name of enterprises together with phrase of “business location” (currently only applied for names of branches and representative offices) as stipulated in point 2, Article 40 of Enterprise Law 2020.
3. No need to inform about seal design before usage
Currently, enterprises have obligations to inform about seal design to business registration organization for publishing the notice about use of the seal design to National Business Registration Portal (as regulated in item 2, Article 44, Enterprise Law 2014).
New enterprise law does not regulate that enterprise must inform about seal design to business registration organization.
Accordingly, this law regulates that the seal design shall be made at seal production basements or by digital form in accordance with law about electronic transaction and digital signature.
The enterprise can decide on type of seals; quality of seals and formal of seals and contents of the seal for enterprise, its branches and representative offives and other units.
4. Changes on capital ratio in State enterprises
State enterprises also include enterprises that the State holds on above 50% of charter capital and voting shares not only enterprises with these ratio of 100% of charter capital as current statement.
5. Declining regulations about ownership term of ordinary share
Enterprise law 2020 has just declined regulations that any sharesholder or group of shareholders must hold orginary share for at least 06 consecutive months as stipulated in item 2, Article 114, the current enterprise law to ensure about the implementation of shareholders’ rights which shall not affect to operations of normal production and business operations of enterprises.
6. Enterprise suspension only needs to inform 03 days in advance
Enterprise must inform in written notice to Business registration organization at least 03 working days before enterprise suspension or enterprise resumption before the deadline as informed (item 1, Article 206 Enterprise Law 2020).
As in current law, a enterprise may suspend its business as long as a written notification of the time and duration of suspension and time of resumption is sent to the business registration authority at least 15 days before the date of suspension or resumption. This regulation still applies in case the enterprise resumes its business before the notified date. (Article 200, Enterprise Law 2014). Therefore, Enterprise Law 2020 withdrawed term for notification about enterprise suspension within 03 working days in replace of 15 days before the date of suspension.
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