Principles to ensure when registering business households

Who has the right to establish a business household? What principles should be applied when registering a business household?

1. How is a business household understood?

Pursuant to Article 79 of Decree 01/2021/ND-CP regulating business households as follows:

(1) A business household is registered by an individual or household members and is responsible with all of their assets for the business activities of the household. In case household members register a business household, one member shall be authorized to act as the business representative. The individual who registers as a business household, the person authorized by household members to represent the business household, is the owner of the business household.

(2) Households engaged in agricultural, forestry, fishery, salt production and street vendors, snacks, traders, mobile businesses, seasonal businesses, and low-income service providers do not have to register as business households, except in the case of doing business in conditional business investment sectors. The People’s Committees of provinces and centrally run cities regulate low income levels applicable locally.

2. Who is allowed to establish business households?

In Article 80 of Decree 01/2021/ND-CP stipulates the right to establish business households and the obligation to register business households as follows:

(1) Individuals and household members who are Vietnamese citizens with full civil act capacity according to the provisions of the Civil Code have the right to establish business households according to regulations defined in this Chapter, except for the following cases:

a) Minors, people with limited civil capacity; people who have lost their civil act capacity; people with difficulty in cognition and behavior control;

b) People who are being prosecuted for criminal liability, detained, are serving prison sentences, are serving administrative measures at compulsory detoxification facilities, compulsory education establishments or are banned by the Court from holding positions, practicing certain professions or doing certain jobs;

c) Other cases prescribed by law include related.

(2) Individuals and household members specified in Clause 1 of this Article may only register one business household nationwide and have the right to contribute capital, buy shares, and purchase capital contributions in the enterprise in their individual capacity.

(3) Individuals and household members registering a business household may not simultaneously be the owner of a private enterprise or a general partner of a partnership except in cases where with the consensus of the remaining partnership members.

In addition, in Article 81 of Decree 01/2021/ND-CP stipulates the rights and obligations of business household owners and household members participating in business household registration as follows:

(1) Business household owners carry out tax obligations, financial obligations and business activities of business households in accordance with the provisions of law.

(2) The business household owner represents the business household as a requester to resolve civil matters, plaintiffs, defendants, people with related rights and obligations before the Arbitrator, the Court and other rights and obligations according to the provisions of law.

(3) The business household owner can hire others to manage and operate the business activities of the household. business. In this case, the business household owner and household members participating in business household registration are still responsible for debts and other property obligations arising from business activities.

(4) The business household owner and household members participating in business household registration are responsible for the business activities of the business household.

(5) Other rights and obligations according to regulations provisions of law.

3. What principles must be met when registering a business household?

According to Article 84 of Decree 01/2021/ND-CP specifically stipulates:

(1) Business households and business household founders declare their own business household registration documents and are responsible before the law for the legality, truthfulness and accuracy of the information declared in the business household registration documents. business.

(2) The district-level business registration authority is responsible for the validity of the business household registration dossier, and is not responsible for violations of the law by the founder of the business household or business household.

(3) The district-level business registration authority does not resolve disputes between individuals in the business household with each other or with other organizations and individuals.

(4) The business household owner may authorize other organizations or individuals to carry out business household registration procedures as prescribed in Article 12 of this Decree.

In Article 86 of Decree 01/2021/ND-CP on business locations of household businesses as follows:

(1) The business location of a business household is the place where the business household conducts business activities.

(2) A business household can do business in many locations but must choose one location to register the business household’s headquarters and must notify the Tax Administration Agency and market management agency where business activities are conducted for the remaining business locations.