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Which individuals / organizations are not allowed to set up businesses?

The rules about the Who does not establish a business specified in Clause 2 Article 18 of the Law on Enterprise 2014. In order to explain and clarify the provisions of this Law, Expertis will explain each specific regulation in order to provide general knowledge that many entrepreneurs will be interested in.  
See more: Things to know when starting a business in Vietnam
  Who does not establish a business

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Who is not allowed to set up a business?

All individuals and organizations except for the cases listed below are allowed to set up businesses.

1. State agencies and people's armed forces units use state assets to set up business enterprises to make profits for their own agencies or units.

What does state property include? According to Article 1, Clause 1 of Decree No. 14/1998/ND-CP of the Government regulating the management of state assets, it is defined: “State assets are those assets formed from the state budget or sourced from the State budget. capital from the state budget, property established as state ownership in accordance with law, land, forests, mountains, rivers, lakes, water sources, underground resources, and marine resources , continental shelf and airspace.” More specifically, Article 2 of this Decree clearly states about the types of state assets including: “1. State properties in the administrative and non-business area: are assets assigned by the State to state agencies, non-business units, armed forces units, political organizations, socio-political organizations, social organizations and social organizations. – occupations in management and use include: a) Land; b) Houses, other construction works attached to land; c) Other properties attached to the land; d) Means of transport, working equipment and other property. Assets belonging to infrastructure in service of public and national interests include: a) System of transportation works; b) System of irrigation works; c) Lighting, water supply and drainage systems; d) Cultural works; d) Other infrastructural works. 2. State assets at the enterprise Property established as state ownership in accordance with law, including: a) Property being material evidences and means of violation of the law which are confiscated to the State fund and fined for violating the law; b) Hidden or sunken property is found; property that is dropped, forgotten, empty, or derelict and other properties as prescribed by law are state property; c) Property donated, donated or contributed by domestic and foreign organizations and individuals and other forms of transfer of property ownership to the State, aid assets of the Government, foreign non-governmental organizations; outside and other international organizations. 3. State reserve assets Land, forests, mountains, rivers, lakes, groundwater resources, resources in seas, continental shelves and airspace (hereinafter referred collectively to as land and other natural resources). "   What is the purpose of gaining profits for agencies and units? According to Article 4 Article 18 The Law on Enterprises of the year 2014 defines the profit-taking for agencies and units as follows: is the use of income in any form derived from business activities, from capital contribution, stock purchase a part, buy a capital contribution to one of the following purposes: 1. Divide in any form to some or all of the following:
  • Officials, civil servants and public employees in accordance with the law on cadres, civil servants and public employees;
  • Officers, non-commissioned officers, professional armymen, workers and defense officers in agencies and units of the People's Army; officers and career non-commissioned officers in bodies and units of the Vietnam People's Police, except for those appointed to be authorized representatives to manage the State's contributed capital at enterprises.
2. Supplementing the operational budget of the agency or unit in contravention of the law provisions on the state budget 3. Establishing a fund or adding it to the fund for private benefit of agencies or units
 

2. Officials, civil servants and public employees in accordance with the law on cadres, civil servants and public employees

According to Clause 1 Article 4 The Law on Officials and Officials in the year 2008 defines: ☸ Staff: be a Vietnamese citizen, elected, approved, appointed to hold positions and titles according to terms in the Party's, State's, political-social organizations at central, provincial or district level within the payroll and salary from the state budget. ☸ Civil servant: be a Vietnamese citizen, recruited and appointed to a rank, position or title in an agency of the Communist Party of Vietnam, the State, or at a central, provincial or district socio-political organization; in agencies and units of the People's Army that are not officers, professional soldiers, defense workers; in agencies and units under the People's Public Security Forces who are not professional officers and non-commissioned officers, and in the leadership and management apparatus of public non-business units of the Communist Party of Vietnam, the State, and socio-political organizations (hereinafter referred to as public non-business units), on the payroll and receiving salary from the State budget; For civil servants in the leadership and management apparatus of a public non-business unit, the salary is guaranteed from the salary fund of the public non-business unit in accordance with law. ☸ Official: Vietnamese citizens who are recruited according to their working positions or working in public non-business units under the employment contract regime, receiving salaries from the public fund's public salary fund according to the provisions of law. (Article 2, Law on officers of the year 2010)
 

3. Officers, non-commissioned officers, professional armymen, workers and defense officers in agencies and units of the People's Army; officers and career non-commissioned officers in bodies and units of the Vietnam People's Police, except for those appointed to be authorized representatives to manage the State's contributed capital at enterprises.

 

4. Officers leading and professional managers in State enterprises, except those who are appointed as authorized representatives to manage the State's contributed capital in other enterprises

 

5. Minors; people with limited civil act capacity or lost civil act capacity; The organization has no legal status

What is a person who has lost civil act capacity? Clause 1, Article 22 of the 2015 Civil Code stipulates on people who have lost their civil act capacity as follows: “When a person is unable to perceive or control his/her behavior due to a mental illness or other disease, At the request of a person with related rights and interests or from a concerned agency or organization, the court shall issue a decision declaring that this person is a person who has lost his/her civil act capacity on the basis of the conclusion of psychiatric forensic examination. . When there are no longer grounds to declare that a person has lost his/her civil act capacity, at the request of that person or persons with related rights and interests or concerned agencies or organizations, the Court shall issue a decision to cancel the civil act. rescind the decision declaring the loss of civil act capacity.” What is the case in a person with limited civil act capacity? Clause 1, Article 24 stipulates about people with restricted civil act capacity: “A person addicted to drugs or other stimulants that leads to the destruction of family property shall, at the request of persons with rights and interests, related agencies or organizations, the Court may issue a decision declaring that this person is a person with restricted civil act capacity.” When does the organization have no legal status? An organization shall not be recognized as a legal entity when it does not fully satisfy the following conditions (based on Clause 1, Article 74 of the 2005 Civil Code on legal entities): a) It is not established under the regulations of the Ministry. Civil Law 2005, other relevant laws; b) There is no organizational structure or executive agency; c) Having no property independent of other individuals or legal entities and taking responsibility for their own property; d) Not participating in legal relations on their own behalf.
 

6. Persons who are being examined for penal liability, serving imprisonment penalties, decisions on administrative handling at compulsory detoxification establishments, compulsory education establishments or being banned from practicing business, holding positions or doing certain jobs, related to business under court decisions;

Other cases in accordance with the law on bankruptcy, anti-corruption.

Individuals are not allowed to set up businesses under the Bankruptcy Law Clause 3, Article 130 of the Law on Bankruptcy stipulates: “The person holding a managerial position of an enterprise or cooperative has been declared bankrupt but intentionally violates the provisions of Clause 1, Article 18, Clause 5, Article 28, Clause 1 of Article 48. 03 of this Law, the judge shall consider and decide on the disqualification of the right to establish an enterprise or cooperative, or to act as a manager of the enterprise or cooperative within XNUMX years from the date the People's Court issues a decision. to declare bankruptcy.” Individuals are not allowed to set up businesses according to the provisions of the Anti-Corruption Law of the year 2014 Clause 2, Article 20 stipulates: Persons holding positions and powers in agencies, organizations or units may not do the following:
  • Establishing, participating in management and administration of private enterprises, limited liability companies, joint-stock companies, partnerships, cooperatives, unless otherwise provided for by law;
  • Establishment and holding of titles, management positions and administration of private enterprises, limited liability companies, joint-stock companies, partnerships, cooperatives in the domains in which they were previously responsible for managing within certain time limits prescribed by the Government;
Clause 4, Article 20 stipulates: Heads and deputy heads of heads of state agencies may not contribute capital to enterprises operating within the lines of business in which such persons directly perform state management or to husband or wife, father, mother or child doing business within the lines of business that such person directly performs the state management of.  
  Thus, in addition to the 6 case specified in Clause 1, Article 18, the Enterprise Code of 2014, every individual and organization has the right to establish an enterprise in Vietnam. If requested by the business registration agency, the person who registers to establish an enterprise must submit a judicial record card to the business registration office.