Important Terms under the Law on Enterprises
Copy means a document reproduced from the master register, or certified from the original by a competent authority or organization, or compared against the original.
Foreign individual means a person holding documents evidencing foreign nationality.
Shareholder means an individual or organization owning at least one share of a joint-stock company.
Founding shareholder means a shareholder owning at least one ordinary share and signing the list of founding shareholders of the joint-stock company.
Dividend means the net profit paid per share in cash or in other assets.
Company includes limited liability companies, joint-stock companies, and partnerships.
Limited liability company includes a single-member limited liability company and a multiple-member limited liability company.
National Business Registration Portal means the electronic information portal used for online business registration, disclosure of enterprise registration information, and access to enterprise registration information.
National Business Registration Database means the collection of enterprise registration data nationwide.
Enterprise means an organization with its own name, assets, and head office, established or registered for establishment in accordance with law, for business purposes.
State-owned enterprise means an enterprise in which the State holds more than 50% of charter capital or total voting shares as prescribed in Article 88 of this Law.
Vietnamese enterprise means an enterprise established or registered for establishment under Vietnamese law and having its head office in Vietnam.
Contact address means the registered head office address for an organization; the permanent residence, workplace, or another address registered by an individual with the enterprise as the contact address.
Market value of contributed capital or shares means the market trading price at the immediately preceding time, the agreed price between seller and buyer, or the price determined by a valuation organization.
Enterprise Registration Certificate means a written or electronic document recording enterprise registration information issued by the Business Registration Authority to the enterprise.
Legal documents of an individual include one of the following: Citizen Identity Card, Identity Card, Passport, or other lawful personal identification papers.
Legal documents of an organization include one of the following: Decision on Establishment, Enterprise Registration Certificate, or other equivalent documents.
Capital contribution means the contribution of assets to form the charter capital of a company, including contribution for company establishment or additional contribution to the charter capital of an established company.
National Enterprise Registration Information System includes the National Business Registration Portal, National Business Registration Database, related databases, and system technical infrastructure.
Valid dossier means a dossier containing all documents required by this Law and in which all such documents are duly completed in accordance with law.
Business means the continuous performance of one, several, or all stages of the process from investment, production to consumption of products or supply of services on the market for profit-making purposes.
Family relation includes: wife, husband, biological father, biological mother, adoptive father, adoptive mother, father-in-law, mother-in-law, father of wife, mother of wife, natural child, adopted child, son-in-law, daughter-in-law, biological siblings, brothers-in-law, sisters-in-law, siblings of spouse.
Related person means an individual or organization directly or indirectly related to an enterprise in the following cases:
a) Parent company, manager, and legal representative of the parent company, and persons with authority to appoint managers of the parent company;
b) Subsidiary company, manager, and legal representative of the subsidiary;
c) Individual, organization, or group of individuals or organizations capable of controlling the enterprise through ownership, acquisition of shares, capital contribution, or company decision-making;
d) Enterprise managers, legal representatives, Controllers;
đ) Spouses, biological parents, adoptive parents, parents-in-law, children, adopted children, sons-in-law, daughters-in-law, biological siblings, siblings-in-law of managers, legal representatives, Controllers, members, and shareholders owning controlling shares or capital contribution;
e) Individual authorized representatives of companies, organizations specified at points a, b, and c;
g) Enterprises in which individuals, companies, or organizations specified at points a, b, c, d, đ, and e have ownership sufficient to control company decision-making.
Enterprise manager means the manager of a private enterprise and the manager of a company, including owner of a private enterprise, general partners, Chairperson of Members’ Council, members of Members’ Council, Company President, Chairperson of Board of Directors, members of Board of Directors, Director or General Director, and other individuals holding managerial positions as provided in the company’s charter.
Enterprise founder means an individual or organization that establishes or contributes capital to establish an enterprise.
Foreign investor means an individual or organization as prescribed by the Law on Investment.
Contributed capital portion means the total value of assets contributed or committed to be contributed by a member to a limited liability company or partnership. The ownership ratio is the proportion between a member’s capital contribution and the charter capital of the company.
Public-utility products and services mean essential products and services for the socio-economic life of the country, locality, or community, which the State needs to ensure for public interest or for national defense and security, and whose production and supply under market mechanisms cannot cover costs.
Company member means an individual or organization owning part or all of the charter capital of a limited liability company or partnership.
Partnership member includes general partners and capital-contributing members.
Enterprise reorganization means division, separation, consolidation, merger, or conversion of enterprise type.
Foreign organization means an organization established abroad under foreign law.
Voting capital means contributed capital or shares whereby the holder has the right to vote on matters within the competence of the Members’ Council or General Meeting of Shareholders.
Charter capital means the total value of assets contributed or committed to be contributed by company members or owners upon establishment of a limited liability company or partnership; and the total par value of shares sold or registered for purchase upon establishment of a joint-stock company.
Legal representative of an enterprise means an individual representing the enterprise to exercise the rights and obligations arising from the enterprise’s transactions, representing the enterprise as petitioner, plaintiff, defendant, or person with related rights and obligations before Arbitration, Courts, and other rights and obligations as prescribed by law.
Authorized representative of an owner, member, or shareholder that is an organization must be an individual authorized in writing to act on behalf of such owner, member, or shareholder to exercise rights and obligations in accordance with this Law.
Multiple-member limited liability company means an enterprise having from 02 to 50 members being organizations or individuals. Members are liable for the company’s debts and other property obligations to the extent of capital contributed, except as provided in Clause 4 Article 47 of the Law on Enterprises 2020. Members’ contributed capital may only be transferred in accordance with Articles 51, 52, and 53 of this Law.
The charter capital of a multiple-member limited liability company at the time of registration of enterprise establishment is the total value of members’ contributed capital as committed and recorded in the company’s charter.
Members’ Council is the highest decision-making body of the company, comprising all members who are individuals and authorized representatives of organizational members. The company charter provides for meetings of the Members’ Council, which must be held at least once a year.
Director or General Director means the person who manages day-to-day business operations of the company and is responsible to the Members’ Council for the performance of his/her rights and obligations.
Single-member limited liability company means an enterprise owned by an organization or individual (hereinafter referred to as company owner). The company owner is liable for the debts and other property obligations of the company within the company’s charter capital.
Joint-stock company means an enterprise in which:
a) Charter capital is divided into equal portions called shares;
b) Shareholders may be organizations or individuals; the minimum number of shareholders is 03 and there is no maximum limit;
c) Shareholders are only liable for the debts and other property obligations of the enterprise to the extent of capital contributed;
d) Shareholders are entitled to freely transfer their shares to others, except as provided in Clause 3 Article 120 and Clause 1 Article 127 of the Law on Enterprises 2020.
The charter capital of a joint-stock company is the total par value of shares sold. At the time of registration of enterprise establishment, charter capital is the total par value of shares registered for purchase and recorded in the company charter.
Share certificate means a certificate issued by a joint-stock company, book entry, or electronic data confirming ownership of one or several shares of such company. A share certificate must contain the following principal details:
a) Name, enterprise code, and head office address of the company;
b) Number of shares and type of shares;
c) Par value of each share and total par value of shares indicated on the certificate;
d) Full name, contact address, nationality, and legal document number of individual shareholders; name, enterprise code or legal document number, and head office address for organizational shareholders;
đ) Signature of the legal representative of the company;
e) Registration number in the company’s register of shareholders and date of issue of the certificate;
g) Other information as prescribed in Articles 116, 117, and 118 of the Law on Enterprises 2020 for preference shares.
Board of Directors is the management body of the company, having full authority to, on behalf of the company, decide and exercise rights and obligations of the company, except for rights and obligations under the competence of the General Meeting of Shareholders.
Partnership means an enterprise in which:
a) There must be at least 02 general partners who are joint owners of the company, jointly conducting business under a common name (hereinafter referred to as general partners). In addition to general partners, the company may have capital-contributing members;
b) General partners must be individuals and are liable with all their assets for the obligations of the company;
c) Capital-contributing members may be organizations or individuals and are liable for the company’s debts to the extent of capital contributed.
Private enterprise means an enterprise owned by an individual who is liable with all his/her assets for all activities of the enterprise.
Economic groups and corporations of all economic sectors mean groups of companies related to each other through shareholding, capital contribution, or other forms of association. Economic groups and corporations are not a type of enterprise, do not have legal personality, and are not subject to registration for establishment under this Law.
Company separation: A limited liability company or joint-stock company may be separated by transferring part of its assets, rights, obligations, members, or shareholders (hereinafter referred to as the separated company) to establish one or several new limited liability companies or joint-stock companies (hereinafter referred to as separated companies) without terminating the existence of the separated company.
Company consolidation: Two or more companies (hereinafter referred to as consolidating companies) may consolidate into a new company (hereinafter referred to as the consolidated company), and the consolidating companies shall cease to exist simultaneously.
Company merger: One or more companies (hereinafter referred to as merged companies) may merge into another company (hereinafter referred to as the merging company) by transferring all assets, rights, obligations, and lawful interests to the merging company, and the merged companies shall cease to exist.
Legal basis:
Article 3; Clause 1 Article 12; Clause 1 Article 14; Clause 1 Article 46; Clause 1 Article 47; Clause 1 Article 55; Clause 1 Article 63; Clause 1 Article 74; Clause 1 Article 111; Clause 1 Article 112; Clause 1 Article 121; Clause 1 Article 153; Clause 1 Article 177; Clause 1 Article 188; Clause 1 Article 194; Clause 1 Article 199; Clause 1 Article 200; Clause 1 Article 201 of the Law on Enterprises 2020.
