May a Private Enterprise Owner Concurrently Own a Household Business?

Short answer: No. A private enterprise owner may not concurrently be a household business owner. This is a statutory prohibition in Article 188 of the Law on Enterprises 2020: a private enterprise owner may not concurrently be a household business owner or a general partner of a partnership. However, a private enterprise owner may still contribute capital or purchase shares or capital contributions to become a member of a limited liability company or a shareholder of a joint-stock company.

Legal basis

• Law on Enterprises 2020, amended and supplemented by Law No. 76/2025/QH15 (effective from 01/7/2025) — Article 188 (private enterprises);
• Decree 168/2025/ND-CP on enterprise registration (effective from 01/7/2025).

The prohibition: a private enterprise owner may not concurrently be a household business owner

Article 188 of the Law on Enterprises 2020 clearly provides: a private enterprise owner may not concurrently be a household business owner or a general partner of a partnership. This stems from the unlimited liability nature of both models:

• A private enterprise owner is liable with all of his or her assets for all activities of the enterprise;
• A household business owner is also liable with all of his or her assets for the household’s business activities;
• If one individual were the owner of both, the boundary of liable assets could not be determined when obligations to third parties arise.

Therefore, an individual who is a private enterprise owner may not additionally register a household business in his or her name, and vice versa.

What a private enterprise owner MAY do

Apart from the two prohibited cases above, a private enterprise owner has full investment and business rights like any other individual:

• Contributing capital to establish or purchasing capital contributions in a limited liability company (single-member or multi-member);
• Purchasing shares to become a shareholder of a joint-stock company;
• Contributing capital to a partnership as a capital-contributing member (not a general partner);
• Working or holding management positions in another enterprise (if its charter/enterprise permits and there is no breach of competition or concurrent-position rules).

In the above invested companies, the private enterprise owner’s liability is limited to the contributed capital — completely separate from the unlimited liability in his or her own private enterprise.

A household business owner wanting to establish a private enterprise: how?

There are two lawful options:

Option 1. Terminate the household business first, then establish the private enterprise

Complete the household business termination procedures at the commune-level business registration authority, fulfill tax obligations, then register to establish the private enterprise.

Option 2. Convert the household business into an enterprise

The law encourages and has support mechanisms for household businesses to convert into enterprises; upon conversion, the household business ceases to exist and the newly established enterprise inherits the business operations.

Frequently asked questions

May the spouse of a private enterprise owner register a household business?

The prohibition applies only to the same individual. The wife or husband of a private enterprise owner — as an independent individual with full civil act capacity — still has the right to register a household business in his or her own name, provided all prescribed conditions are met.

May a private enterprise owner be a general partner?

No. Article 188 prohibits a private enterprise owner from concurrently being a general partner of a partnership (general partners also bear unlimited, joint liability).

How are violations of the prohibition handled?

The business registration authority may refuse the registration dossier; where a certificate was issued based on untruthful declarations, the enterprise/household business may have the certificate revoked and be subject to administrative sanctions under the regulations on sanctions in the planning and investment sector.

Notes on applying current legal provisions

Many people confuse “not being allowed to concurrently be a household business owner” with “not being allowed to invest in other enterprises” — these are two completely different issues. If you are a household business owner and want to expand into the private enterprise model (or vice versa), you should review all tax obligations, assets and ongoing contracts before converting. Contact an ANT Legal lawyer at 0966.475.966 for advice on a suitable plan.

Common risks to note

• One individual standing in the name of both a private enterprise and a household business — violating the statutory prohibition;
• Mistakenly believing one may not contribute capital to an LLC/joint-stock company — missing lawful investment opportunities;
• Converting from a household business to an enterprise without terminating the household business’s tax obligations.

How can ANT Legal help?

ANT Legal advises on conditions for enterprise owners, reviews subject eligibility before registration, and carries out household business termination procedures, conversion of household businesses into enterprises, and private enterprise establishment registration. For quick advice, you may contact a lawyer at 0966.475.966.

Related articles

• Distinguishing household businesses from enterprises
• Converting a household business into an enterprise
• Procedures for registering a private enterprise in Vietnam
• How many enterprises may one individual establish in Vietnam?
• Procedures for registering a private enterprise in Vietnam