Who does not have the right to establish and manage a business? in Vietnam

Law on Enterprises 2020Being passed has opened up many opportunities for individuals and organizations to easily establish and manage businesses. However, in specific cases, some individuals and organizations will not have the right to establish and manage businesses or have the right to contribute capital, buy shares, or purchase capital contributions from other companies.

1. Subjects do not have the right to establish and manage enterprises 

Pursuant to Clause 2, Article 17 of the Law on Enterprises 2020, the following individuals and organizations do not have the right to establish and manage enterprises, specifically:

– State agencies and units of the people’s armed forces use state assets to establish business enterprises to make their own profits;

– Cadres, civil servants and public employees according to the provisions of the Law on Cadres and Civil Servants and the Law on Public Employees;

– Officers, non-commissioned officers, professional soldiers, workers, and defense officials in agencies and units of the Vietnam People’s Army; officers, professional non-commissioned officers, and police workers in agencies and units of the Vietnam People’s Police, except those appointed as authorized representatives to manage the State’s capital contribution in enterprises or manage state-owned enterprises;

– Leading and professional managers in state-owned enterprises as prescribed in Point a, Clause 1, Article 88 of the Enterprise Law, except those appointed as authorized representatives to manage the State’s capital contribution in other enterprises;

– Minors; people with limited civil act capacity; people who have lost their civil act capacity; people with difficulty in cognition and behavior control; organizations without legal status;

– People who are being prosecuted for criminal liability, detained, are serving prison sentences, are serving administrative measures at compulsory drug treatment facilities, compulsory education establishments or are banned by the Court from holding certain positions, practicing professions or doing certain jobs; Other cases according to the provisions of the Bankruptcy Law and the Law on Prevention and Combat of Corruption.

If requested by the Business Registration Authority, the person registering to establish a business must submit a criminal record card to the Business Registration Authority;

– Organizations that are commercial legal entities are prohibited from doing business or operating in certain fields according to the provisions of the Penal Code.

2. Subjects do not have the right to contribute capital, buy shares, or purchase capital contributions to joint stock companies, limited liability companies, and partnerships

Pursuant to Clause 3, Article 17 of the Law on Enterprises 2020, the following individuals and organizations do not have the right to contribute capital, buy shares, or purchase capital contributions to joint stock companies, limited liability companies, and partnerships:

– State agencies and units of the people’s armed forces use state assets to contribute capital to enterprises to gain private profits for their agencies and units;

– Subjects who are not allowed to contribute capital to enterprises according to the provisions of the Law on Cadres and Civil Servants, the Law on Public Employees, and the Law on Prevention and Combat of Corruption.

It can be seen that individuals and organizations falling into the cases specified in Clause 2, Article 17 of the Law on Enterprises, if not falling into the cases specified in Clause 3, Article 17 of the Law on Enterprises 2020, still have the right to contribute capital, buy shares, and capital contributions from other companies.